Yields Down in Housing, Too
Yield to a saver is how much interest they get on their savings.
To an airline or hotel, it’s how much money they make from a given seat or room, respectively.
So, what’s “yield” to a Realtor?
It’s how many clients they need to be actively working with to net a prescribed number of closings.
Because it’s tough to make a living as a Realtor unless you close at least 8-10 deals a year (unless they’re very big deals), that would seem to be a good starting number.
To close 8-10 deals five years ago, you might expect to be working with perhaps a dozen clients simultaneously.
Most Realtors would tell you triple that, or 25-30.
That’s due to a number of factors, including:
–the number of short sellers in today’s market, who can’t sell unless they get bank approval (or, many banks’ approval).
–Buyers (sometimes also the same short sellers) buffeted by a rough economy and high unemployment.
–General wariness on both sides of the table about what’s going to happen to the housing market next.
Bottom line: longer deals with more steps (see, “Selling Each House 3(!) Times“).
In turn, that means managing more leads, prospects, and active clients.
How is this new environment affecting Realtors?
It’s unquestionably accelerating Realtor attrition — now down about 30% since the peak.
But it’s also putting a premium on the remaining Realtors’ technology and management skills.
If you don’t know how to communicate efficiently with several dozen people simultaneously — whether it’s via texting, cell phone, facebook, LinkedIn, or something that’s going to be developed next week — it’s increasingly hard to keep up (see, “Realtor Sphere? More Like a “Pyramid“)