If you are working in commercial real estate brokerage, you will need to understand your numbers and how those numbers compare to the industry generally. They are the key performance indicators that you should work to.
There will always be levels of competition to monitor, and your commission and listing ratios will change throughout the year. There will also be different shifts and changes throughout the year to industry results and inquiry.
So your numbers will help you see what is happening with local property, and on that basis you can adjust your marketing and prospecting efforts. Be aware of the levels of activity currently from a statistical perspective, and then assess those numbers and the potential changes for the future.
How do your numbers compare to the general market and the activities of your competitors? So what numbers should you be monitoring? It’s time to get to know what is happening locally.
Here are some ideas to help:
- The levels of inquiry coming to you and/or your office – Throughout the year you will see shifts and changes when it comes to the levels of enquiry from advertising and marketing, and also the inquiry coming into your office. When you assess those numbers, you will understand the best times of year to take a property to the market to achieve a result in a timely way.
- The types of inquiry coming in each day for the location – Look at the variations of inquiry between sales and leasing in your town or city. When you understand the inquiry, you can make some choices when it comes to how you work with tenants, buyers, sellers, and property owners.
- The comparisons of business between sales and leasing activity – When you look at the particular listings that you are working, you will understand the size of the potential transaction and the quality of the inquiry on a sales or leasing basis. Soon you will be biased towards better listing stock.
- The numbers of listings that you are generating by type on a weekly basis – Ideally your listing numbers should be growing. Understand the differences between open listings and exclusive listings. Exclusivity will always be better for you and where you are headed professionally.
- The amount of money you are converting as marketing funds paid by vendors – If you get an exclusive listing then it should be underpinned by marketing funds. You can then market the property comprehensively for the location.
- The time on market that applies to the location and your property listings – How long are your properties staying on the market? It’s a question to be monitored as it will be a leading indicator for your real estate business and commission conversions.
- The degree of quality that applies to the properties and the location – A quality property will always generate more inquiry, so make sure you have a prospecting model that focuses on quality properties in the best locations.
- The commissions that you are converting per transaction – Small properties can be hard work from the perspective of negotiation and promotion, and the commission rewards can be small. If you want a better real estate business, then lift your focus towards larger properties both in sales and leasing activities. Avoid the small listings that can waste your time. Always work with quality listings.
- The time on market that applies to both sales and leasing locally on a listing by listing basis – Why are some properties staying on the market longer than others? Perhaps there is a problem with marketing spend, targeted markets, or pricing. Whatever the problem, you do need to see it and resolve it. The comparisons of time on market will tell you what is happening.
- The numbers of listings that you have sold and or leased the last five years – This assessment can get a little scary, however it is important. What you are trying to do here is see how you have improved in listing size; typically, this will lead to better commissions.
- The size of your database and its growth over time – The number of people that know you well will directly impact your professional career, so lift the number of people in your database regularly and specifically.
- The levels of competition and the other listings in the marketplace today – Your position as an agent or a broker when compared to the levels of competition will always be important. The people in the property market look at signboards, internet listings, and campaign material. If you are missing or falling back in any of those categories, then things will be slow and difficult.
So there are lots of numbers to understand and monitor here. You cannot be random and generic in the commercial real estate brokerage industry. You really do need to be specific in what you are doing, and then in the understanding of what is happening around you with listings, results, and clients.
Why is this so?
When you understand the numbers, you can track the results and shift your prospecting efforts accordingly. There is no such thing as ‘luck’ in commercial real estate brokerage today if you want to get to the top of your market; the top agents achieve results through definite effort and particular focus. They know what is going on around them and then they make small but specific adjustments to move ahead.