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How Much is Your Listing Presentation Costing You?

Tuesday, February 1, 2011 — What if I told you that your listing approach is costing you over $30,000 every year? Is it? Before you answer that question, do the following exercise with me. How many listings did you take in the last 12 months? The average agent listed about one per month — or 12 for the year. But what percent of those listings resulted in sales? Let’s say that half did. (That’s in line with the national average.)

Now let’s talk about your commission rate. How much do you keep for the listing side of each sale? Nationally, the average commission side was 2.6% last year, slightly up from 2.5% the previous year. If you discount to get listings then you probably charge less, but let’s use the average for this exercise.

Now let’s consider the average sale price in your market. Nationally, that number is just over $200,000, so we’ll use that for purposes of this illustration. That means the average commission earned per listing was $2,600 — $200,000 X 2.6% = $5,200 X 50% = $2,600.

Okay, let’s total all these numbers and see exactly how you did? You listed 12 homes at an average of $2,600 per listing, so your income from listings in the last 12 months was $31,200. Not too bad. Now let’s take a look at how a different approach might impact your earnings.

Suppose you were to learn a new listing approach that historically sold homes in half the time of the traditional listing approach? What effect would that have on the listing success rate, or the number that actually closed? Did you know that the number one reason that listings don’t sell is that most sellers don’t have the ability to endure today’s high average days on market?

So if you used an approach that sold in half the time, it stands to reason that many more would-be-sellers could actually sell their homes and not be forced to stay where they are or put their property on the rental market. Let’s say that by cutting the sale time in half you could bring that success rate from 50% to 70%, which is a very reasonable assumption.

And what if that new approach netted the client more money while paying you 4% or even more instead of the 2.6% national average commission? I’m about to introduce you to my listing presentation that does just that, but first, let’s look at what using the wrong listing presentation is costing you.

If you took the exact same number of listings, using the same sale price, and the additional commission, you earn an average per listing of $5,600 — $200,000 X 4.0% = $8,000 X 70% = $5,600 or $3,000 more per listing than our previous example. Now multiply $5,600 by your 12 listings and you have earnings of $67,200.

Now let’s compare. In the first scenario, using the traditional listing approach, you earned $31,200 from 12 listings. Taking exactly the same 12 listings, using my approach, you earned $67,200. That’s a difference of $36,000 that using your listing presentation cost you in only one year! I don’t know about you, but if my listing approach was costing me that much, I might at least take a look at another approach.

I realize that’s a strong statement and it would border on arrogant if it weren’t true. But it is true and I encourage you to check it out. Using my listing approach, I listed 114 homes in my first year in real estate, all at 8% or more, in a market that typically listed for 6% or less. Better yet, they typically sold in half the average days on market and netted my clients more money! Since then over 100,000 agents have taken my listing training and many have had similar results.

So check it out for yourself. What if you never missed a listing? What if you took every single listing you went on? You’d likely list twice as many homes or even more. Maybe you don’t want to list 100+ homes this year. That’s okay. But if you just earned your potential on the ones you do take, you will likely earn twice as much from your listings without doing any more work. Learn more here.

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