100 Day Real Estate Challenge
By Jenny Heins
Why do I keep pestering you about having a healthy database of personal contacts? See, this isn’t just me being a nag; it’s about tapping into the easiest lead-generating goldmine you have. Here’s why:
1. These Folks Aren’t Strangers: Yup, the people in your database? You actually know them! They’re not randoms from the internet or cold leads from a list. They’re your former classmates, your aunt who loves garden gnomes, and maybe even that friend who thinks pineapple does belong on pizza (it’s debatable). The point is, there’s already a trust factor at play here.
2. It’s Practically Free: Engaging with your personal contacts costs you nothing but a bit of time and perhaps the occasional coffee when you meet up. No need for flashy billboards or expensive online ads that scream “Look at me!” You can keep it simple and effective.
3. Pre-License Hustle: Even if you’re still in the trenches getting your real estate license, you can start laying the groundwork. Imagine hitting the ground running with potential business already lined up. That’s like showing up to a potluck with the main dish ready to go—everyone’s going to love you.
THE NITTY GRITTY OF TURNOVER RATES
5% to 7% of people buy or sell a home every year. , Did that makeba little light bulb should go off (National Association of Realtors). That means 5-7% of the people you know will be looking to buy or sell a house every year. Let’s put that into perspective:
SHOW ME THE MONEY
Let’s say the median home price in Columbus, GA, is a cool $195,000. If you have 200 personal contacts (and yes, I’m counting the pineapple-on-pizza folks), and 5% of them decide to dive into the real estate market (that’s the low end of our estimate), at a commission rate of 2%, you could be looking at gross commissions of about $39,000.
So, without turning into a marketing wizard or spending a dime, you could potentially rake in an annual gross income of $39,000 by simply working a model that’s as proven as my grandmother’s secret cookie recipe.
Let's dial up the optimism knob a bit, let's consider the sunnier side of the street where the commission rate is a plush 3% and a whopping 7% of my ever-so-charming personal contact, that's 14 transactions with gross commissions that balloon to a heartwarming $82,600.
Fayetteville, North Carolina- Median home price $204,000 (Zillow)
At a 2% commission rate with a 5% turnover rate, you could expect annual gross commissions of approximately $40,800 from your personal contacts.
At a 3% commission rate with a 7% turnover rate, the annual gross commissions could increase to about $85,680.
Gulf Shores, Alabama- Median home price $446,000 (Zillow)
At a 2% commission rate with a 5% turnover rate, you could expect annual gross commissions of approximately $89,200 from your personal contacts.
At a 3% commission rate with a 7% turnover rate, the annual gross commissions could soar to about $187,320.
Now, isn’t that something to think about? While I’m here nudging you about your personal contacts, it’s because this is a straightforward path to success in real estate—one where you already have everything you need right in your rolodex (or, more likely, your smartphone).
So, let’s get cracking on that database, shall we? And remember, every name you add is not just a potential commission; it’s a vote of confidence in your future success. Plus, you never know—maybe that pineapple-on-pizza debate will finally settle itself over a closing table.
By Jenny Heins, 100 Day Real Estate Challenge