What is a "top producer"? How is it defined? Why would anyone care?
Some would say if you are in the top 10% you qualify. I set the bar higher because the bottom 90% is doing so poorly. To be in the top 1% – of all agents in the United States – you would need to sell about 40- 50 houses a year. The first year I qualified I sold 38 houses. At 40 – 50 sales in a year you would probably always be in the top 1% in your area and in the country.
Why does it matter? Why have you seen me mention so many times, "what top agents do"? It certainly isn’t to suggest that someone doing less or something different is in any way "wrong". There are many many ways to approach this business and anything that is working can be defined as "good". To me it has to do with systems (successful methods). There are some top agents that have very poor systems and handle their business by taking each particular situation, each escrow and just "glowing it right". Through sheer intention and desire, making it close. Forcing the deal together. These agents do not have a stable business but have a temporary perch they will soon fall from. When I think of "top agents", for me, it is really shorthand for "has workable systems". Most importantly, top agents who are stable top agents spend very little energy "glowing things right" with regard to procuring new business. Without exception, they have exact and specific methods they apply again and again and again – and get the same predictable results each time. They have a system for getting business. They do not depend on: lucky breaks, caught a good one, happened to meet a guy who is ready to buy, didn’t expect it to happen but it did sell and close. As I personally spent the first twelve years of my real estate career depending exclusively on lucky breaks, happening to catch a good one, etc. – I am very familiar with how that works, as well.
During my first twelve years in real estate all of my deals – each and every one – came about as sort of a fluke. If I had arrived just 15 minutes later, I might have missed it. If I hadn’t driven down that street I wouldn’t have seen the guy in his front yard by a FSBO sign and wouldn’t have stopped to talk to him. I discovered that I could get business from almost any activity. Just about anything could produce a deal or two. But while striking up a conversation with the guy behind me – while playing goofy golf, or chatting with someone in line at the drugstore or a movie theater could produce business, it wasn’t a very predictable method. It is this point alone – a predictable method of producing new customers – that separates the top agents from the pack. This is what makes the difference between having a business and having a job. It was in 1990 I started to really make that transition from hoping for a deal to the continuous creation of deals (developing workable systems).
So when I hear someone say, "I got a deal from twittering", "I met the client at a Kiwanis meeting", "I knew them from church", "We golf together", "The neighbor really liked my custom yard sign", etc., to me that sale is in the category of a fluke. I mean no disrespect. That is not to say it didn’t happen or will never happen again but that it is not a controllable event. I can’t go to enough Kiwanis meetings to get all of the business I want. I can’t happen by enough golfers to support myself. During those lean years I did have "miracle escrows" that truly seemed like a gift from heaven at the time. And I was grateful too. But I was also determined to eventually get to the miracles as usual level. That required workable systems.
March 13, 2009 at 2:08 am
What percentage of brokers would you guess use any sort of formalized tracking system for analyzing lead sources? At an agent level?
When you finally created and implemented a business system, did you put into place your own tracking system or did you use something off the shelf?
March 13, 2009 at 8:23 am
For tracking systems, you can get them from Mike Ferry, Floyd Wickman, David Knox, and others, I’m sure.
Keller Williams has tracking systems built into their intranet. Very very good if it’s (ahem) used…
That’s the key. I’m glad Russell wrote this post.
At a “turning point” seminar, Brian Buffini said something I’ll never forget. He said something to the effect that in real estate, average is pretty much “slow death”. You can’t make it in real estate being just “average”… Now, you don’t have to be a mega producer, but you shouldn’t strive to be “average”. Being “average” in real estate is having 3-7 sales a year. Look over the “average” statistics from NAR for ANY given year. Is that REALLY want YOU want.
You don’t have to be number 1. As my personal favorite, Floyd Wickman says, “It’s the SECOND mouse that gets the cheese!”…
Another funny thing Floyd said once was something to the effect was to envision a cemetary with your tombstone.. Would you want it to say “Here lies Joe Mama.. He “just got by..”
I think honestly, Predictable systems should be adopted SUPPLEMENTED by “hit and miss” strategies…
Hell, what do I know?
March 13, 2009 at 8:49 am
I really enjoy reading your blogs and the way you cut through the chase. Chasing deals is a far cry from having a business and it will ultimately distroy you. Thank you for your words of wisdom.
March 13, 2009 at 1:08 pm
Russell is one of the few real estate practitioners who really treat their business like a business. He is able to provide consistent high-level service to his clients because nothing is left to a whim. And, whereas I mute most commercials, I don’t with Russell’s. His genuine care and appreciation for the client comes through clearly – because it’s real.
The boom times taught many that transactions could be picked off a tree. The current climate is helping some to realize the value of Russell’s point of view. He’ll always be a tough man to catch, but you’ll be better for trying.
As for systems, here’s a good question to ask yourself: are your data and methods honed to the point where you could sell your business if you wanted to? I’ve seen this happen, and to the seller and buyer both, it’s a thing of beauty.
March 13, 2009 at 6:43 pm
“I can’t go to enough Kiwanis meetings to get all of the business I want.”
I might suggest that you can find all the profit you want from Kiwanis clubs. Work with me on the metrics here, Russell.
MREA says 1 out 12 “mets” result in a transaction annually. If you’re meeting and marketing to 500 people a month, wouldn’t that yield in 40 or so transactions?
March 14, 2009 at 8:10 am
I track all my sales on an excel sheet, so I know my numbers pretty much all the time.
I track sales, year to year and compare the quarters.
Everything we do is marketing and face to face, being involved with our communities is a biggy.
My past clients and or friends, co-workers of past clients and sphere use to account for 85% of my business.
Since most folks quit moving up to bigger and better in Mi due to the economy, I had to go find those moving here due to jobs transfers.
Now it is 58% internet of all closings.
March 15, 2009 at 5:15 pm
Wait a minute! Top 1% is 40-50 houses a year?!
Does that have to be houses you listed, or 40-50 sides a year (buyers or sellers)?
I might have been in the Top 1% this whole time and I didn’t even know it 🙂
March 15, 2009 at 7:51 pm
40 to 50 houses a year in CLOSED sales would put you in the top 1%.