. We are quickly closing in on 2010. With that in mind I am writing this post to give you a very simple way to achieve your financials goals for next year. First I want you to punch your numbers into this chart. We are looking for how much GFI (Gross Commission Income) you need to meet your financial obligations based on the lifestyle you want to live.
The amount of GCI
(Gross Commission Income) needed is $117,500. So how do you get there?
* Average sales price in your market area X the average commission X your % split=Your ADPT (Average Dollar Per Transaction).
* GCI divided by ADPT divided by 12=How many transaction you need to close per month.
* Active Listings in your Market divided by Listings Sold Per Month=How many listings you need per sale X transactions you need to close per month= How many saleable listings you need to maintain.
The math based on the numbers in my example would be:
* $125,000 X .0275 = $3,437 X .70 = $2,406 (ADPT)
* $117,500 (GCI) / $2,406 (ADPT) = 49 / 12 = 4 (need to close per month)
* 600 (Active Listings) / 100 (Sold per month) = 6 X 4 = 24 (Saleable Listings)
Based on this example
you would need to maintain 24 listings at all times and would need to list 4 a month. Or you would need to close 4 buyer side transactions per month to have a fairly decent year.
The point of this exercise
is to show you how to lay out your financial map so you can make sure you are meeting your obligations with ease.
A final tip:
There are only three ways to increase your GCI.
* Increase the number of units you sell.
* Increase the sale price of the units you sell.
* Increase the fees that you charge.
Does this help?