Agent Academy: How to forecast your real estate sales for 2019
To forecast your sales next year, we are going to look at 3 different metrics that help us arrive at a decision.
After we know how many homes, we are going to sale, we can turn that into an entire business plan and budget.
You will also need to know what your average selling price is and your average commission rate to fully forecast how much money you will make next year.
1. Source
The first thing you need to do is figure out how much business you think you will get from different sources.
Where does your business come from? Postcards, farm, past clients, events, Zillow, website, every source of your get business. Then look at the historical numbers to make an intelligent decision based on the past, and how much time you are going to invest this year, you can forecast how many houses you will sale.
2. Who
Next decided how many homes each team member will sale. If you don’t have a team think about how many homes you will sale.
This is based on year over year production, focus, who they are, how they are showing up and their intensity, you can predict how many homes each agent on your team will sell.
This number, in theory, should be the same as your sources of business, but it is often not.
You will start to see a little bit of a gap.
3. Them
Then have each member of your team tell you how many homes they think they are going to sale next year.
On my team, I ask them, “How much money do they want to make next year?” Then based on how much money they want to make, we can determine –
- How many homes they will need to sale, to make that much money.
- How many listings they will need to take, to sale that many homes.
- How many appointments they will need to go on, to get that many listings.
- How many leads they will need to work, to set that many appointments.
This also created a business plan for each agent for the year.
The number they tell you, they plan to sell in the coming year, will tend to be higher then what you forecasted.
Now that you have a forecast for sources of business, for each agent, and their prediction you can adjust each as you see fit. You will then need to decide on your final forecast for the year.
The amount you forecast will then become your budget for the year. This is calculated by taking that number by your average price point and commission. Which will give you your Take out what you need to pay your team, then what is left over you can use for your expenses and reach your net profit goals.
This is how we forecast sales, and we have been very successful with it.
I encourage you to take this approach, where you are looking at it from multiple angles, challenging assumptions, having conversations and ally scrutinizing how you are going to get there.
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