How to Set Income Goals as a Real Estate Agent
With 2022 right around the corner, there is no time like the present to start thinking about your New Years' resolutions and 2022 goals. As a real estate agent, we have to take our goal-setting seriously. We have chosen the life of a 1099 and that means that we need to have a clear plan to hit our sales and commission goals. Let’s get started:
Download our Income Goal Handbook Here.
Choosing our Income Goal
One of the hardest things to do is choose somewhere to start. The easiest way to do this is by choosing our income goal. For example, $100,000 in GCI in the year 2022.
Working Backwards
Now that we have our income goal in mind, let’s reverse engineer the process as to how we are going to get there. We have a helpful template that can help you outline.
Since most agents are working under a firm, there is a split that they will have to pay the brokerage. We must account for that.
If your goal is to make $100,000 in 2022, and you are currently on a 70/30 split with your brokerage, you will have to make $142,857 in commissions. The extra $42,857 is what you pay within your 70/30 split.
Now that we know over the year we will have to make $142,857 in commissions to make $100,000 for ourselves, let's break it down further.
Every 6 months we need to sell:
$71,428
Every Quarter:
$35,714
Every Month
$11,904
We know every month we need to make $11,904 in commissions to take home $100,000 at the end of the year. Let’s break it down further for the commission per house and the sales price of homes.
Every month we need to sell:
$396,825 in Real Estate
Assuming we get 3% Split
$476,190 in Real Estate
Assuming we get 2.5% split
For our final step, we now know we need to sell $476,190 per month if we are averaging a 2.5% commission per sale, and a 70/30 split with our firm to pocket $100,000 a year.
This is where the step of your market data comes in. What is your average sales price of a home? Where is your market? If you are new or do not have this data saved, let’s just use Charlotte’s median home sales price as our price point. Charlotte’s Median sales price in September 2021 was $331,000.
This means after all of our math, we have to sell 1.43 homes a month ($476,190/$331,000) to reach our $100,000 GCI goal.
This breaks down as you can see very clearly sets you up to visualize your goals. We have created a helpful handout that will assist you in breaking down your yearly goals as we have done above.
Strategizing Our Year
Every single month we have to sell 1.43 homes to meet our goal. The big question is: How are we going to do that?
Determine what works for you. If you know that you are not going to sit behind a computer screen and cold call, let’s be realistic and leave that out of our plan. It will only come back to hurt you later.
Compile the lead generation strategies that have worked for you in the past and attempt to break them down as we did with our commissions earlier. Here are some examples:
For every $250 in social ad spend, I can get one client
Every 2 open houses, I can get one client
Every 30 FSBO calls I make, I can get one client
Every 100 postcards I send, I can get one client
We have a massive lead generation handbook full of different ways to generate leads on social media, in person, and more. Download it here if you need some ideas.
If you are brand new to the industry, this is where it becomes important that you have a team lead or a successful team to help you along your lead generation journey. Setting expectations and goals is difficult if you do not have previous data to reference back to.
Put your Strategy to Work
We now know that:
For every $250 in social ad spend, I can get one client
Every 2 open houses, I can get one client
Every 30 FSBO calls I make, I can get one client
Every 100 postcards I send, I can get one client
This means now it is time for us to focus on those lead generation tactics to make sure we are successful throughout the year. Over the week, I know I am going to want to divide my time among each of those to assure my success. Here is an example of my schedule:
Monday:
8-10am
Monitor my social media ads
Tuesday:
2-4 pm
Call 10 FSBO listings
Wednesday:
5-7 pm
Create and send postcards
Thursday:
9-11 am
Call 20 FSBO listings
Sunday:
2-4 pm
Host open house
Note how we left plenty of time to attend to our clients with showings, listing pitches, and more. Lead generation is one of those items that people think takes a lot of time. Dedicating a few hours each day can fill your pipeline with a wonderful set of leads.
Staying Accountable
Our Success team works with our agents to make sure they are sticking to their desired path. Find an accountability buddy to make sure you are sticking to your desired schedule.
At least monthly, take the time to check in on your progress. Have you sold 1.43 homes a month? Or have you only sold 4 and it is now 6 months into the year? Even if you have, there is still time to reach your goal, you might just have to pivot.
Observing what is working and what is not will not only save you money and time, it will help you down the road making sure that you know what to repeat next year when it is time to set bigger goals!
Want to discuss your goals with a Success Team Member? Book a Free 30 minute consultation to talk about how you can put these steps immediately into action.
Looking for lead generation strategies? Read our Ultimate Lead Generation Handbook here.