Setting goals

The other side of the coin is an agent’s projected earnings.

“Know where you want to go,” says Miller. “You cannot plan a trip unless you know where you want to go.”

According to NAR, the median gross income for all Realtors in 2014 was $45,800. Thousands of new

Realtors are licensed every year, and end-of-year earnings will vary drastically from person to person. That $45,800 income, though, serves as a very realistic benchmark for what a new agent can expect to make in one year. It’s very close to what Engel tells his first-year agents to aim for, which is $50,000.

Because first-year agents will not have access to some of those numbers (such as average sales price), they’ll need to work backwards, starting with their target income. From there, it is only a matter of calculating the work necessary to hit that number.

“The goal here is to become as specific in your numbers as possible,” Hajdu says. “How many leads do I need to contact a month? How many buyer and listing appointments do I need to schedule? How many sales do I need to close?”

Location, location, location

Once the budget has been written up, there are a few other financial line items that must be addressed. But before focusing on those details, agents must address a more pressing question: where will they operate?

It starts with a geofarm, Engel says.

“Agents should pick an area they can constantly market to – somewhere with 250 to 300 homes is a good area,” he says. “If you send out ads to that many homes four times a year, they’re going to begin recognizing you as the agent for that area.”

Hajdu further implores agents to leverage their own neighborhoods.

“It’s a good business practice to take advantage of the area you live in,” she says.

Once an agent has determined the area they’re going to work in, the next step is analysis: learning the nuances of inventory, price, demographics and competition in each neighborhood market.

“We still do tours and brokers open houses, and I tell agents – particularly new agents – to go and tour those homes in different neighborhoods,” Engel says. “You get to understand what the $200,00 mark is, and what the $400,000 mark is. You see what the individual markets have to offer at this and that price level, and you can compare those inventories and price ranges between neighborhoods. You start to figure out the overall area as you tour.”

Technology is another piece of the puzzle, and there are many tools that can bolster agents’ knowledge of their markets. For example, NAR provides the Realtors Property Resource to help Realtor members create quick, comprehensive comparative market analyses covering local demographics, community stats and recent sales prices to provide valuable data that agents need to define their target markets.

Services like those can help fill in data gaps, particularly in areas such as demographics research. As they become more familiar with the particulars of their real estate markets, agents will learn that different people buy homes differently – and trends often run along generational lines.

The final step in preparing to enter a particular section of a wider market is analyzing the competition present in that market. Agents must know who else is operating in their area, and should learn how those agents work, how their business is structured, who their target markets are and what their annual sales volume is.

Competition with other agents is just a fact of the industry, but while competition can present an extra challenge, that is not always a negative thing. Hajdu certainly does not see it that way.

“The best way to grow in any business is to surround yourself with the best and learn from smarter and more successful agents,” she says. “It felt natural for me to look into what other successful agents were doing in my market. I found out who they were and reviewed their bios, listings and stats to find out what set them apart from the other competing agents.”

When another agent won a listing over her, Hajdu adds, she took the loss as a learning opportunity, finding out who ended up with the listing and then logically thinking through what, if anything, she could have done differently to get the listing.

“This type of competitive analysis and research led me to adopt and form some of my best practices and strategies,” she says.