Stop Chasing the Wrong Real Estate Deals

This week’s blog comes from Jonathan Lack, a strategy and operations consultant and author of You Can’t Scale Chaos. He helps real estate firms work smarter instead of harder so they can tame their chaos and achieve consistent, profitable growth.

We’re almost halfway through 2024 already, {{ first_name }}.

Do you know how much profit you’ve made this year? 

Do you know where it’s coming from—and where it’s not coming from? 

Thinking you know isn’t the same as truly knowing…and most agents don’t know. 

That’s unfortunate, because if you don’t know what’s really happening in your business, you can’t begin to improve it. 

And I may be way off base here, but I’m guessing that 2024 probably hasn’t been your best year yet. You’re probably looking for ways to do better in the second half of the year.

Well, I can’t give you a magic pill to get more sales, but here’s the first piece of advice I give all my clients…

Do a sales audit.

If I asked you to show me all the transactions from your entire real estate career, could you do it? Do you have that information handy, or would you have to go digging for it? 

Few agents keep an up-to-date record of their complete sales history from Day 1 in real estate, let alone use this information to guide their business practices and daily decision making.

Would it be wrong to think your transaction records are spread all over the place, scattered in multiple spreadsheets, PDFs, and paper forms in various locations physically or online?

Most agents don’t know their year-to-date numbers, let alone for their entire career!

A close analysis of your past sales reveals where you have had the most success.

You might think you already know this intuitively, and you’re probably right…but you’re also probably not acting accordingly.

 Doing this research probably sounds pretty intimidating.

You’re probably thinking you have no idea where to even begin.

You’re probably wondering if it’s really worth the bother.

I’ll tell you one thing: of all the times I’ve done a sales audit for a client, there has NEVER been a time when the client didn’t learn something important about their business.

Nobody ever does this and says to me, “I already knew all that.”  

You’ll learn exactly how much you’ve made and exactly where it comes from—and where it DOESN’T come from. But even more importantly, you’ll learn where you should be focusing your time and attention to GROW your business. 

That second part is the real value of this exercise.

Most agents do whatever business they can get their hands on…but that’s no way to grow. Not all business is equally valuable to you.

The most valuable opportunities are the ones that strengthen your expertise and network in your core market.

Your core market is your green zone: the area where you fight to win as much business as possible.

Your green zone can be defined by multiple different factors. Geographic area is probably the most common, but property type and price point can also factor in. So can social circles, if you work with a lot of clients from the same school, house of worship, country club, or other organization.

You can’t be spread too thin here. For many agents, their green zone is just one community. Go for more than 2-3, and you’re reaching too far. 

Focusing on a concentrated area means that every time you do a deal there, you gain a track record, knowledge, and connections that help you do MORE deals there.

Your yellow zones are the areas where you’ll take a deal if it falls in your lap, but you won’t fight for business.

Let’s say the opportunity is adjacent to your green zone but not in it, or the client is someone you know but not connected to your core market.

The deal will still be profitable for you, but it won’t contribute to your strategic advantage. For that reason, it’s worth doing, but it’s NOT worth fighting for.

Most agents spend FAR too much time fighting for and doing yellow zone deals. They spread themselves too thin, so they end up with no strategic advantage anywhere.

Your red zones are areas where it’s not worth doing a deal even if it falls into your lap.

These are deals that will take more time and effort than they’re worth, and you’re better off referring them to an agent who specializes in that area.

Even if the client was referred to you, don’t be afraid to say no to an opportunity if it’s too far away or too far outside your area of expertise. As hard as it can be to walk away from business, it’s even worse to waste time on business that’s unprofitable and unnecessarily stressful.

The main purpose of a sales audit is to identify your green, yellow, and red zones.

Once you do that, you have a much better understanding of where to invest your time, energy, and marketing dollars.

Plus, you can start to incorporate your green zone expertise and track record in your marketing, so prospective clients can clearly see your strategic advantage in that area. 

A specialist who obviously knows a specific market inside and out is always going to be more attractive in that market than agents who do a few deals in a lot of places.

If you’ve never done a sales audit before, don’t let that stop you.

One of the biggest reasons agents resist doing this is that they’re embarrassed they haven’t already done it. They try to rationalize that it’s not that important.

IT IS. 

If you don’t know your zones, you’ll continue to waste time on opportunities that don’t help you grow.

Once you know them, you’ll have a clear path to growth…and for many agents, that brings an extra boost of energy and excitement, because they can finally start making informed decisions instead of emotional ones.

Bottom line: not all business is good business.

Until you understand this and figure out what is good business for YOU, your business will be stuck where it is. 

Anybody can go a mile wide and an inch deep. To rise above the rest, you have to do the opposite: go an inch wide and a mile deep.

The sales audit will show you how, and I’ll be on a coaching call this coming week to show you how to actually do it.

If you’re not already enrolled in the Daily Accountability Calls, start your 14-day free trial now to get on that call.

Hope to see you there!

- Jonathan