When I first journeyed into Real Estate, my coaches were relentless with their advice to “track your numbers!” They hounded me through email, coaching sessions, and in person - whatever it took to make sure I kept track of my numbers. (In fact, my coach would not get on my weekly call with me if I had not entered my numbers for the previous week.)
While number tracking back then was tedious and sometimes not completely accurate due to the process I was using, it paid off like crazy for me and for our entire team. I was earning more than I thought possible for my first year in the business, and our whole team doubled its total sales volume in under a year.
Actually, It worked so well that I started my own software company that builds applications specifically made to track, analyze, and report the performance of real estate agents.
While tracking numbers seems like a simple enough task, sometimes it’s difficult to know what to track. That’s why I put together this guide. These are key performance indicators - KPI’s - (I also like to call them key performance activities, or KPA’s) that will bring you and your team massive real estate success when you dedicate yourself to tracking, analyzing, and optimizing them while utilizing this data to drive fun challenges and competition with leaderboards in the areas that are most important to your business.
Lead Generation KPI’s
These track lead generation activities, also called "lead measures"
Contacts – How many people you talk to on a daily basis.
You are completely in control here. A contact could count as a team lead or personal lead that you’ve contacted and talked to (not simply attempted to talk to). This is the first place I look with struggling agents. Are you bringing enough people into your pipeline to sustain the levels of revenue you want to earn? Also, the single purpose of making a contact is to get to the next step, which is setting an appointment.
Referrals – Leads generated through existing clients or leads.
Successful agents are consistent with their activities and ask for referrals. The fact that a client would trust you with one of their friends or family speaks a lot to the health of your relationship with them. Also, referrals are so much easier to work with! They already believe in you because they have heard good things. They go into the whole situation with positive expectations. Never pass up a chance to ask for referrals – they are some of the easiest sales out there. Think about it this way, if you receive a referral from every one of your existing clients, you would double your business overnight.
Note: Looking for an easy way to find out what lead measures you should be shooting for each month? This calculator will figure it out for you.
These track the opportunities created by your lead generation activities
First-time Buyer Appointments - Meetings with a first time buyer, either to show a house or to make plans to do so.
While the world has changed drastically over the thousands of years of our existence, the human brain has not evolved as quickly. Just like the cavemen needed to instantly identify threats in order to survive, buyers are forming their opinion about you in under one minute. You need to learn to make a killer first impression in order to be successful with first time buyers. The purpose of this first meeting is to get a signed buyer broker agreement.
Listing Appointments - Meeting with a seller for the first time to negotiate listing and selling their house.
Much like the first-time buyer appointment, a great first impression is your secret weapon with listing appointments. You need to gain the seller’s confidence and show them that you are the best agent to sell their house. One of the most effective strategies here is ask the right questions and to make everything about them, not about you.
In addition to working on making a good first impression, make sure to take a look at conversion rates between contacts/referrals and first time buyer/listing appointments. If you are contacting a lot of people and getting few first appointments, this could mean that there is a flaw in your approach to those contacts or that you are contacting the wrong group of people. Again, when going on a listing appointment, the purpose is to get a listing agreement signed.
These track your capitalization on opportunities, also called "lag measures"
Buyer/Broker Agreements - The number of buyers who have signed you as their exclusive agent.
A lot of buyer/broker agreements is a sign of a healthy pipeline and an agent who is capitalizing on opportunities.
I see a great deal of agents who put themselves at a disadvantage by not going for buyer/broker agreements. While I’ll admit that asking a buyer to commit to you can be an awkward conversation (if not done the right way), a buyer broker agreement is a great tool for realtors because it formalizes the relationship. You commit to them, and they commit to you. It allows you to own their buying process and also prevents you from wasting a lot of your time with someone who may or may not end up working with you.
The key is tactfully explaining to your buyers that this is how you make a living and that an agreement will give you the ability go all-in on finding them the right house. They’ll understand. It’s really a matter of finding out if they are comfortable having you be the one to represent them once you have met them face to face. Few will say no, but if they do, you can continue asking questions to find out what concerns they have until there are no longer concerns and they are comfortable making that commitment by saying yes.
Now you better deliver on your promise.
Listing agreements - Sellers who have signed you to sell their house
It’s always great that sellers are trusting you to market and negotiate a deal on their house. Remember, it’s not just about getting the listing, but it’s about selling the house. Taking a listing costs you money and time until you get the house sold. In addition to knowing how many listing appointments you need to go on in order to get a listing, make sure you are aware of your conversion rate on selling these houses - what percent of the houses you put up for sale actually end up selling? If either of these percentages are low, you need to tweak your process. You may need to ask better questions on your appointments to get more of the listings and then be able to price the homes at a price point where they will sell.
You need both of these in order to get people under contract. If you don’t have these, that is, without a doubt, a bad thing.
If you have a lot of listings, that is generally a good thing. It means you have been effective at making contacts, setting appointments, building trust, and signing agreements. However, you must then get these listings sold in order to make a paycheck. If not, it is only costing you time and money to market, show, put up signs, take calls, etc. If you are selling your listings, you are enjoying the rewards of all the hard work you have put in up to this point and it means that you are effectively marketing and pricing your listings.
If you have a lot of buyers and are showing them a lot of houses, that means you are probably not preparing them and setting proper expectations. If this is the case, you could have more in-depth conversations about what they are really looking for and also setting the right expectations about the process up front. In today’s market, buyers are able to see many more houses online, and narrow in on which ones they really like before you show them in person, which ultimately should reduce the number of showings. By setting proper expectations and reviewing the process up front, you will spend less valuable time showing them houses that they are not interested in.
Get Your Own Personal KPI's
This quick and easy calculator will take into account your desired income, transaction size, and performance (conversion ratios) and spit out custom KPI's that you should shoot for to reach your goals.