We’ve all heard the old adage, “List to Last” and “List to Live”, but what’s really the big deal about being a Listing REALTOR© as opposed to working with buyers? After all, it would seem easier to find buyers than it is to secure listings, right?
In this book, we’re going to review why listings are so important, how to prospect for them, manage them and how to use your current listings to find more listings and buyers.
The agent who has properly priced listings will always collect a commission at one point or another. The buyers will always come and you, the listing agent, will not have to chase them. The listing agent can leave town, go on vacation, be lying on a beach or skiing in the mountains and STILL be making money when someone makes an offer on one of your properties. A buyer’s agent has to be available for their clients, spend time showing houses, write offers, deal with third parties and buyer loyalty issues and a myriad of other things that enter into finding and securing the right home for a client.
Let’s take a look at this concept from both the amount of time required and the potential income generated by each type of sale.
Let’s assume that you’re working with a buyer who is looking for a $600,000 house. You’ve spent a couple of hours meeting with him, finding out exactly what he’s looking for and then searching for the right homes. You’ve taken him out several times, shown him four or five homes each time, and have finally found the house he wants. After writing the offer and filling out all the needed forms and documents, presenting and negotiating the offer, you finally have an accepted conditional offer.
Now you have the responsibilities of ensuring the buyer gets his financing, arranging for and spending three to four hours attending the home inspection and completing all the necessary paperwork. All in all, you’ve likely spent a total of twenty-five to thirty hours working with this one client. That’s assuming that you haven’t had the misfortune of having to deal with multiple offers a couple of times and losing.
Once the purchase closes, you receive your commission of around $15,000. Your satisfied client may refer you to another client from whom you’ll earn another commission of $15,000, meaning that you have the potential to earn a total of $30,000 from managing this one transaction.
Now, let’s assume you’re working with a client to help them sell their home. You’ve spent about four hours putting together a complete Comparative Market Analysis and your Listing Presentation. You’ve spent an hour or two meeting with the seller securing the listing and perhaps another hour arranging for the staging specialist and photographer to deal with the property. Add another two hours for managing the listing, writing ads, distributing the Just Listed flyers in the neighbourhood and another hour for your email, social media and website campaign and a couple of hours to make sure that all the conditions are removed at the appropriate time and all the paperwork has been received. All in all, your time for a well-managed listing would amount to somewhere around fifteen to twenty hours from listing presentation to sold.
The total commission from the sale could be approximately $15,000. Other potential income could include one purchase ($15,000), the possibility of one deal from an Open House ($10,000), one from your Just Listed and Just Sold flyers and prospecting ($15,000), one from mobilizing your Sphere of Influence ($15,000), one from an ad and/or sign call ($10,000) and one from the internet and social media marketing ($10,000). That would amount to potential earnings of $90,000 from this one listing. One of the main differences between being a listing agent and a buyer’s representative is that some of the activities involved in a listing will generate new clients, while none of the activities involved with acting for buyer clients will result in immediate leads.