One reason real estate agencies don’t do as well as they should is that they are run by salespeople. It’s what is called the dilemma of salespeople at the top.
When an office’s leader is a person who loves making sales, you often find such people too busy doing what they love to spend time tracking where the income goes. This is a recipe for disaster. There is no point, no point at all, in making lots of sales unless you keep a good proportion of the sales income. It’s like setting sail in a leaky ship – sooner or later you’re going to sink.
I knew one leader who had no idea how much money he needed to cover his basic expenses. One month, his office did forty-two sales but after expenses he noticed there still wasn’t much profit left. Something had to be wrong.
And it was – radically wrong. The person in charge of this office was a salesperson – somebody who loved making sales – and he did so at any cost. When this leader finally examined his expenses he found he needed a whopping thirty-three sales just to break even. What causes this? On one hand you have a leader who needs thirty-three sales to break even while there are other leaders who, if they made that many sales, would have a profit of two and a half million dollars.
People who attend the Real Estate Agency Management Program for the first time, learn that much of what we do in real estate looks good but is not necessarily profitable. As quickly as we can we drop these unprofitable practices and substitute them for the more profitable components that make us the Six Essential Elementsnecessary for an agency to be profitable. We have seen many offices get off to a