Posted by: realestatewebtrainer | May 21, 2011

You cannot Manage what you cannot Measure

It is a simple idea and it resonates loudly in the business world, but believe it or not, Not so much at the Real Estate Brokerage Level – it is a though the Real Estate Industry does not have the proper mathematics for gauging the health of a successful Office.

You cannot Manage what you cannot Measure needs to become fundamental to the health and growth of Real Estate Offices; National Franchises, NAR, and Real Estate Organization need to dedicate more time to helping Brokers/Owners/Managers and even Agents to develop those skills and apply them routinely.

There has got to me more statistics than just profitability; I see the profit or Loss of a business as a Result, it tells you what happened – it does not tell you how to go about getting to success.

Brokers should compile, Weekly, Monthly, Quarterly, and Annual Statistics and design comparative tools that suggest health or stagnation in a particular market. They must also give meaning to those Statistics and ask colleagues to offer their opinion on how they interpret them. Your Real Estate Statistics are the Sunshine on the Health of your business.

Real Estate Businesses need to stop making or losing money because of the Market – they need to learn to make money despite it!

To Manage Successfully you Must Measure!

Let’s look at some Statistics just to start the conversation:


1. Your Inventory of total Listings separated by type of property, by major price points, and major Geography. You need to know where you are doing business, what type of properties your agents are listing, and in what price ranges.

2. You need to find a way to map all your listings on a Google Map and visualize the opportunities you are missing and the expansions you must pursue. This should be prepared weekly by your administrator and reviewed by the leadership. You must remember that you in the Listings Business!

3. Do you know how many Buyers’ Agency Contracts your agents are writing on a weekly Basis? Do they turn them in so you can tabulate your office’s effectiveness?

4. Do your Agents know the number of leads they are working on, the number of hours per week they dedicate to these leads, and how many of the ones they are working on are at the showing stage? Nationally Average Real Estate agents close 1 Internet Lead per 150 to 200 given. The resources I see Brokers and Agents spend to generate these leads and the closings that are the fruit of these interactions are absolutely out of balance! Engage your agents on the reality of their internet numbers – some of them are really good at working this business – others should not even come close to it.


1. Review each agent statistics such as Listings, Contracts, Closings, and Secondary business activity such as BPOs, Auctions, etc… You should meet with your agent and discuss the opportunities and challenges each one of them are experiencing but grounded with Statistics and Activities. Your meetings with your agents should always return to the core of the growth of the business and it is Prospecting for more Business.

2. Make sure your agents are aware of their ranking in the Local MLS and review the Statistics of the 3 agents above them in that ranking.

3. Run a Monthly Statistics for all your office and build charts that you can use to compare Month over Month, and Year over Year. Make sure your Administrator is good at adding Data to a Spreadsheet and generating Graphs and Pie Charts. You should have clarity about the market areas where your agency is flourishing, but also be aware of the desert that you have ceded to your competition.

Quarterly / Yearly:

1. Your Sales should allow you to know your Gross Agency Income per Closing. This is an important number; you run your agency on that income – and dividing your Business Expenses into it you will let you know how many closings you will need to run a breakeven on your agency on a yearly basis. Don’t estimate it – calculate it.

2. Your Listing Factor – this is also an important number to calculate. It is the ratio of Sold Listings to total Number of Listings Taken. We know that not every listing in inventory will sell – that is a fact! But an agency with a Listing Factor of .85 (85% of Listings Sold) versus .55 are night and day different.

3. By knowing your Monthly Expenses, your Gross Income per Closing, and your Listing Factor you can tell how many Listings your agency should bring in every month to breakeven. In fact if you also know your agents Listing Presentation Closing Effectiveness; you would know how many appointments your agents should be going on a weekly basis to generate the business you all need. You see managing Activities is more effective than hoping for results.

These are only but a few ideas and by no means constitute and exhaustive statistical Modeling of the Data Brokers and Managers ought to track; I want the conversation to center around Measurability and Known Statistics; we cannot run our businesses on just Hopes and Prayers.

Happy Blogging 🙂 – Key Yessaad, Real Estate Coach


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