Are you curious how some agents can sell 100 or more properties a year and still have time to think?
Sure, they may have assistants and buyers agents but still – if you are super busy doing 10, 20 or even 40 transactions per year, they must be doing something very differently.
It’s all a matter of their business model.
They are likely using a transactional business model. You are likely using an emotional business model or some sort of hybrid.
Let’s take a look at these two very distinct models:
Transactional Model: the emphasis is on maximizing the efficiency and volume of individual sales rather than developing a relationship with the buyer.
Emotional Model: the emphasis is on customer retention and future interaction with the customer to build repeat and referral business.
Neither model is better than the other but they differ in some significant ways.
- More revenue if done well
- More experience gained
- Fewer mistakes if systems are well designed
- Cannot accommodate clients who require high maintenance
- Must have excellent systems and stick to them
- Must manage your own emotions
- Must have a reliable lead generating process
- Must have discipline to execute systems consistently
- Can increase business volume quickly
- Must be deliberate about relationships
- More personal connection with the clients
- More time spent on each transaction
- Can accommodate clients that require high maintenance
- Can accommodate more complicated transactions
- Usually less revenue, sometimes much less
- Usually more time management challenges
- Can have an emotional toll on the agent
- Takes a long time to build the business since it is tied to relationship building
- Business can suffer from inconsistency due to dependency on others
Some common misconceptions we hear a lot:
Real Estate sellers and buyers want their agents to be emotionally involved: False. They want their agent to care enough to get them the best possible result.
Real Estate sellers and buyers want an agent who can give them the personal touch: Sometimes. Not all buyers and sellers of real estate want to have a personal relationship with their agents. Many have enough friends already.
Doing a huge number of transactions means you will do a poor job on each individual sale: False. Agents successful at doing large numbers of transactions cannot afford errors and mistakes and have built systems that make the sales process successful. In addition, the experience gained through doing hundreds of transactions helps them protect their clients better.
Real Estate is more fun when you have good relationships with your clients: Sometimes, and sometimes not. We are in the people business but if your need for emotional relationships is keeping you from business success than perhaps it’s time to look deeper.
Agents that have the transactional model don’t care about their clients: False, usually. Most top producing agents care deeply about their clients’ real estate success and care about them as people. They just don’t develop emotional attachments which don’t serve the purpose of buying or selling real estate.
I’m not advocating one system over the other. I know a lot of really great agents who have built their practice on the emotional model. What matters is you find the right business model for you. A combination of the two is possible but for it to be successful, you’ll want to be very deliberate about defining your unique business model.