Real Estate Agent Business Planning Math

If you are a professional real estate agent who wants to work in the industry, please keep reading.  If you are among the majority of real esate agents who are part of the industry, but don't work, go watch soaps.

Let's do some math and learn something about how much work it takes to make some money as a real estate agent.  I have included the first 8 math problems that you should do to begin your planning.

The numbers that I am showing below are made-up for example purposes, but you should be able to input your own numbers and do the math.

Assumptions:

•  Expected Income = $100,000
• Average Sale = $100,000
• 3% commission rate per closing
• 60/40 you and broker
• 60% income from buyers
• 40% income from listings
• 80% conversion rate buyer clients to close
• 65% conversion rate listing clients to close
• 65% buyer appointments become clients
• 80% listing appointments become clients

First: How much do you have to sell to make your income?   Divide your income goal by your expected average commission rate per closing and divided again by your split.
$100,000 / .03 / .60 =  $5,555,555

Second: How many clients do I have to get to closing to achieve this?  Divide your gross annual sales by your average sale amount.
$5,555,555 / $100,000 = 56

Third: How many buyer clients and how many listing clients did I get to closing?  Multiply your total number of closed clients by 60% to find out how many buyer clients you got to closing and subtract that number from your total number of clients closed to find out how many listing clients closed.
56 x 60% = 34   
56 - 34 = 22

Fourth: How many listing clients did I have to sign to get this many to closing?  Divide your closed listing clients by 65%.
22 / 65% = 34

Fifth: How many buyer clients did I have to sign to get this many to closing?  Divide your closed buyer clients by 80%.
34 / 80% = 43

Sixth: So how many appointments did I need to have with potential buyers in order to get that many to sign with me as clients?  Divide your total number of buyer clients by 65%.
43 / 65% = 66

Seventh: So how many appointments did I need to have with potential listing clients in order to get that many to sign with me as clients?  Divide your total number of listing clients by 80%.
34 / 80% = 43

Eighth: How many appointments do I have to have in order to make the income goal that I want?  Add your buyer appointments and your listing appointments together.
43 + 66 = 109

I hate math and this is too much work.  I'm gonna go watch my soaps.