December 22, 2021
Over 10,000 people earned a New Jersey real estate license this year. Many attended Garden State Real Estate Academy; others went to other real estate schools, passed their real estate licensing exam and began their new real estate careers.
If you have not already set your goals for 2022, you are late. . . but better late than never. Let’s start right now.
Why set goals?
Stephen Covey, author of 7 Habits of Highly Effective People, said, “Goals are what take us forward in life; they are the oxygen to our dreams. They are the first steps to every journey we take and are also our last. It’s very important that you realize the significance and importance of goal-setting and apply this knowledge in your life. Begin with the end in mind.”
A real estate agent without a goal is like a pilot who takes off, then turns to the copilot and asks, “Where are we going?” How would you know what to do next, and how would you be able to track your progress if you never set a goal? Unfortunately, goal setting is not something taught in most other real estate schools.
A well-worn acronym for goals is the word SMART. A SMART goal must be written down, and it must be:
Relevant (to your values and experience) and,
We will set a goal based on certain assumptions. You should adjust the actual numbers to reflect your own income aspirations and the market statistics in your local area. But the process is the same, no matter where in New Jersey (or elsewhere) you are building your new real estate career.
Start with how much you want to earn next year.
For this exercise, you want to earn $150,000 in GCI (Gross Commission Income) next year.
Determine the average home price and average commission rate.
In talking to your broker or mentor, you discover the average sales price for the type of properties you will be selling is $325,000 and the average commission per side (seller side or buyer side) is 3%. To keep this example simple, we will assume all your income will come from listings. Of course, when you do your own calculations, you can adjust it to assume a certain percentage of your sales will come from buyers. We will assume you are on a 60-40 split with your broker, meaning that your broker will pay you 60% of each commission check you bring back from a closing.
Our first calculation then is to see what your average commission check will be. $325,000 x 3% = $9,750 x 60% = $5,850 in GCI to you for every sold listing.
How many listings must you sell?
To make $150,000 in GCI, earning $5,850 for each listing you sell, take $150,000 ÷ $5,850 and you need to sell 25.64 listings in 2022. Let’s round that up to 26. So you have to sell 26 listings.
Will you sell every listing you get? Assume it is a normal market next year, not the crazy one we have seen in 2021, and let’s be very conservative and say you will sell 65% of your listings. Take the 26 listings you must sell and divide it by 65% and you see you must sign up 40 listings next year.
How will you get 40 listings?
By learning scripts so you can be really good at listing appointments! In talking to your mentor or coach, she tells you that as a newly licensed real estate agent you should be able to win 60% of the listing appointments you go on. You need 40 listings, so 40 ÷ 60% is 66.67. Let’s round that up to 67 listings appointments you must make in 2022 to get the 40 sellers who agree to list with you.
How do you get those listing appointments? By using your database to lead generate and marketing through farming, open houses, your sphere of influence, etcetera, your mentor tells you to figure on 50 cold calls to find a person who is planning to sell their home and will allow you to make a listing presentation. This number would be much lower for expired listings and FSBOs, and higher for pure-internet lead generation. So if you need to make 50 calls to get one appointment, 50 x 67 = 3,350 calls to prospective sellers that you must make in 2022.
This is where you want to quit! Three thousand three hundred and fifty cold calls! That is pure misery! But wait! That is 3,350 over an entire year. Let’s give you two weeks’ vacation and another week for various personal time. And let’s assume you only want to do lead generation five days a week. Take 3,350 ÷ 49 weeks ÷ 5 days and you must only make 13.67—call it 14 calls a day. If you devoted the first two hours of each weekday to making lead generation calls, that is only seven calls an hour to make $150,000.
Is that worth your time and effort?
“What Gets Measured Gets Managed.”
Obviously, everybody’s numbers will not be exactly what I have shown above. You must keep track of your numbers on at least a monthly—but preferably a weekly—basis. If you discover you need to make more calls to get an appointment, adjust your goals. If your average sale price is less, adjust your goals; if you are doing better than your goals numbers, why not adjust your income goal upwards?
By the end of March, with 25% of the year gone, are you 25% of your way to your annual goal? If not, then is the time to adjust your number of calls, or to get some coaching on improving your scripts and your closing ratios. You don’t want to wait until November before you realize you are going to miss your goals for the year.
Your new real estate career will show you that this is a business where we earn and retain our clients based on service and relationships, and we make our goals based on knowing our numbers.
On behalf of us all at Garden State Real Estate Academy, have an awesome 2022. Shoot for the sky. That way, no matter where you end the year, you’ll be among the stars!
Want to get your real estate license?
Garden State Real Estate Academy offers live pre-licensing, broker licensing and Continuing Education classes for aspiring and existing New Jersey real estate agents. We also provide the “Supplemental Course” for out-of-state licensees wishing to earn their NJ license and our popular “Across the River” class to prepare NJ agents to pass the Pennsylvania real estate licensing exam. These are all delivered by live instructors via Zoom.
We also offer online self-study real estate licensing classes in 21 states through our partnership with The CE Shop. New Jersey does NOT allow self-study pre-licensing classes.
For information on the real estate school’s upcoming New Jersey licensing classes, click here: https://gsreacademy.com/pre-licensing-courses/
For real estate licensing classes in all other states, click here: https://gsreacademy.theceshop.com/pre-licensing
David C. Forward is a licensed real estate broker and instructor and was first licensed as a Realtor® 33 years ago. During his career, David and his business partner sold more than 500 homes in South Jersey. He is now School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, is a much-requested public speaker who has addressed audiences on six continents and is the author of 19 books.