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The mantra of the industry used to be ‘list to last.’ This meant that if you wanted to stay in business as a real estate agent, you needed to be primarily a listing agent. Listing agents were where the money was at, or so the argument goes. Today, it could be argued that the ‘list to last’ phrase is mostly outdated, and now agents can go with whichever aspect of the business they enjoy more.

Here at HouseHunt, we believe that you can make your business work by doing whatever you’re passionate about. That being said, we have a recommended business model for starting agents to help you figure out what works best for you. It takes into account the ‘list to last’ concept, while bearing in mind that to truly build your business, you’re going to need a decent percentage of buying clients.

Jim Droz, formerly the best-selling agent in the world and advocate for HouseHunt lead-generation services, recommends a 75/25 ratio for selling versus buying. Let’s take a look at why that ratio is important.

list to last

Pros of Selling

People make it sound like selling real estate is where the money is. Well the truth is, you get 50% of the commission check whether you’re selling or buying real estate. So it’s not that the money is in selling; it’s just that selling (often) requires less effort. You could make an argument that selling is where the quick money is at.

When you’re the listing agent as opposed to the buying agent, you don’t have to drive clients to house after house only to keep getting excuses for why this house isn’t a good fit. Once you’ve landed a listing interview, you don’t have to… okay, you rarely have to worry about the client flaking out. Let’s just say the adage ‘buyers are liars’ exists for a reason!

Pros of Buying

Even though buying clients will likely account for less of your business model, they should get just as much attention and focus as your selling clients.

Despite the fact that buying agents take more time and often make less commission for you as an agent, the long-term benefits they serve are imperative to your business. Your buying clients will likely come back as selling agents, and – more importantly – build your referral network.

Even though buyers get hated on in the industry, you’re still going to get 50% of the commission check at the end of the transaction. Buyers may be flakier or take more work, but they still make you money at the end of the day. Furthermore, a more balanced buyer/seller ratio can often mean dual agency, further increasing that paycheck!

Yet another benefit of buying clients is that each customer you successfully get in a home equals a testimony for you. Each positive testimony will build your reputation, boost your Internet presence (with Yelp and Google reviews, etc.), and serve as marketing material in the future. The value of a great testimony – from social media to your site to your business card – will always outweigh the extra work it took to get there.

Even if the mantra of ‘list to last’ is still true in today’s market, you’re going to have to ‘buy to build’ your business!

How you split up your buying versus listing ratio is up to you, but both will hold important roles in a growing small business.

 

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