Saturday, May 7, 2011

How Many Houses Do You Sell in a Year?

[Part of a series on how NOT to select a rep.]

When we are being interviewed by a potential client and this question is asked, our first response is "none".  That is because we don't "sell" houses.  Our clients sell/buy.  We help.

But the question is often asked on the premise that the more you sell, the better you are and the more you can do.  Sales are results, so more sales equals better results, right?

We think not.  Certainly, an agent must have a number of successful transactions per year to be considered "successful" ... and to pay bills and eat. But beyond some point, more sales may mean poorer, or at least different, performance and service levels.

There are only so many days in a year and hours in a day. We limit the number of active clients we will take on at any one time (to 10, though a constant 10 would have us lowering the number in a hurry!).  If we assist in the sale of a home a week during the high seasons, we are happy and not really looking for any more business (maybe less).

Why? Because we want to have a life while providing top service.  And because we decided we want to be fully involved throughout the process with our clients.

That is not saying we are the best (that's a story for a different place and time).  It's just our opinion that a number higher than that requires either reduced service or a different business model.

The reduced service is pretty obvious and unpleasant. The point to be emphasized again: More is not continuously better.

The different service model can work well, but you need to understand what it means.  Typically it means a small -- or not so small -- "firm" of professionals and service staff who, to a greater or lesser extent, specialize.  The "names" of the firm typically do the signing up -- listings or buyers.  For a listing, much day to day contact will be with a staff person.  If it's a buyer, or a seller who is also buying, a "buyer agent" may be assigned to that effort.

It's fundamentally the same model as a consulting, accounting, or advertising firm.  In those businesses, you only see the senior partners between signing and cheque-collecting when there is a big, BIG problem!  It works great with a well-managed firm with good training and a steady supply of young keen fresh meat!

I'm rambling.  The point is that that is how an agent "sells" 200 houses a year. They don't. [First, to be repetitive, an agent doesn't sell anything ... except maybe themselves].  A mini-brokerage, firm, team, whatever manages the sale of those homes.

To choose between someone involved in 20 sales or 200 or 300 sales, you need to decide on what kind of model you want and who you want to be working with.  The specific number of sales itself is not relevant.

Previously in this series of posts:
  • The introduction to this series is here
  • The chat about the not-validity of evaluating an agent by the ratio of sale price to listing price (You know the drill: "SOLD OVER ASKING!!") is here.
  • How about the guy with the lowest "average-days-on-market"? Debunked here

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