Category Archives: Real Estate

Why You Need To Keep Track of KPIs And Commissions

Keeping track of KPI’s in any business is a difficult task, and when you are in big business it becomes such a huge task that you require either a dedicated team to keep track or amazing software that will do the job for you. Of course, the first option is expensive, but it is usually the way most large teams go until they learn that software is the better option.

If your team of agents is large, it’s imperative that you keep track of KPI’s if you want your business to run smoothly into the future. If you don’t know exactly what you agents are doing it can present a large number of problems. It makes it very difficult to tell whether they are putting in the requirements required to meet KPI’s, and it makes it very difficult to manage the data that will gradually build your business. It’s important to know what conversion rates your agents have, and if they are bringing in enough sales leads to make it worthwhile having them onboard.

Keeping track of KPI’s is equally as important as keeping track of agency commissions. Keeping track of commissions and cash flow is another very time-consuming task, but simply must be done. It takes valuable time for your accounting or admin staff and it can be frustrating, to say the least. The time your employees spend on these types of tasks can be very costly at the end of the day. The time it takes to compile commission statements, the time it takes your agents to work out when they will be paid commissions, and the time you spend waiting for cash flow forecasts is wasting time and money that should be spent on more important things.

Without lead generation, your agency doesn’t have sales. This is a simple concept to grasp but getting through the regular maintenance of those leads is hard work. Manually entering data is tedious, making sure all the information is correct, monitoring leads and ensuring they are worthy, sales strategies, and following up all take loads of time, and the best way through it is with tailor-made software that does it all for you.

With the right customised software, you can easily track KPIs, commissions, leads, sales strategies and more. Software that can measure your returns, and alert you when targets are not on track, allows you to take action when it is required.

Eliminating these jobs from the daily tasks of your employees ensures they are being utilised in the areas you need them to be used. It takes the stress off your business and forces your business to grow.

Our system offers complete transparency so you can see how your business is performing, where the issues are and how to fix them.

For homeowners: Do you need to spend money to make money?

When it comes to selling your home, you will probably ask yourself the age-old question about having to spend money to make money. In the real estate market, it is vital that you spend the money on the right things when getting your home ready for sale.

Deciding how much money to spend is also a tough one, because you don’t want to spend money that you won’t get back. However, there are things you absolutely must spend money on to ensure you do get the selling price you want.

When a person views a house at an open inspection their instinct is to find everything they possibly can that is wrong with a house. They will see a broken cupboard door or a light fitting and they will see chipped paint and, in their minds, they are adding up the costs involved to repair everything, and taking it off the minimum price they will offer you.

So, you can see the importance of spending money on the little things that in the long run will add value to your sell price, if not exactly adding “value” to your home as such.

Cosmetic renovations add value

Painting your home inside and out id the one thing that will add value no matter what. Making sure everything looks consistent with the rest of the house is very important as well. Make sure you don’t pour money into things that won’t make you money in the long run. Unless you are set to completely renovate your 1950’s home and pour hundreds of thousands of dollars into it and sell when the market suits you, don’t bother with massive spending. Simple cosmetic updates will be worth more than a massive renovation.

However, don’t just leave it as it is, unless you have a very quick sale with no added value wanted in mind.

If you can’t look after the cosmetic stuff yourself, hire someone who can. Think of it as a short-term investment that will see great returns when you sell the home for more than you wanted originally. Make sure your home looks best from the road. Potential buyers will drive by at any given time, and first impressions are seen from a car window. 

Property Investment Checklist

Property is one of the best possible investments you can make if you know what you are doing, and with the market as it is right now, it’s a great time to be spending money on investment properties. So how do you know if you’re in a financial position to invest in property?

To begin your investment property journey, you need to do a number of things:

  • You need to first work out how much combined debt you have, how much you will need to borrow and how much you can budget for your new investment property.
  • You should have around 20% of the property value ready as a deposit, plus at least 5% for stamp duty and legal costs as well as a bit of a buffer on top. It’s important to allow for at least $50,000 for future cash-flow in case things turn bad with your income.
  • Property investment entails some serious research time and a solid financial commitment, so you must be completely thorough in your research and even more so in your investment preparation.
  • You need to treat a property investment like a business. Buying a home is one thing, buying investment property needs to be bought like you would buy a business, with everything in place to make you profit on your investment.  
  • Make sure you have a quality team around you for advice. This should include mortgage broker or a banker, financial planner, property valuation expert, an accountant, and a builder.

 A lot of potential investors sit around and wait for the market to be right for their terms, however if you wait too long, the market can change that dramatically that you might miss out on some really good investments while you wait. Don’t wait for the market, if you are ready, you are ready.

Always be prepared for the unexpected. This means your backup cash should be safely tucked away, and it also means you should never expect interest rates to stay low. This is the biggest mistake you can make. Budget your property with a very high interest rate in mind, and you’ll almost always come out on top.

Always prepare for the worst-case scenario, and when things go smoothly you’ll get further in front than you imagined.

 

 

How will the property market slowing affect my business?

There is no doubt that the slowing of the property market has a major impact on real estate business. One of the biggest things, is that during a boom, there’s a number of new businesses that start out with the hopes of taking a slice of the market. When the market slows, that means more businesses fighting for clients – making competition tougher than ever before!

As a real estate agent, you are going to need to work harder than you have been working for years, to get new leads and retain clients. When there is a smothered market of any kind, competition between vendors gets fierce and the winners will always be the strongest, survival of the fittest. When it comes to real estate, it will all come down to how you deal with your current clients and how you intend to attract new ones.

Feeling the burn

Australia’s housing boom has been a bit of a pain for the government in the last few years, and while investors have been seeing huge benefits, most other people are beginning to feel the burn.

In 2017, house prices slowed right down, capital city rent prices became virtually unaffordable for the average income, and interest rates remained unchanged. There are predictions that there will be many interest rate hikes in the next two years, which could change many things.

Even though the Reserve Bank of Australia probably won’t change any rates soon, it certainly doesn’t mean your home loan interest rate is stable. A large portion of the money we lend from banks (which they need to also borrow from overseas companies) comes from the USA, where interest rates are currently on a sharp rise. What this means is that it will have a large effect on any money sourced from overseas companies, including your potential client’s home loans.

How you handle your business in 2018 will make the biggest difference in the next 5 years. However, even if you come out in front in your local area now, there will still be another pack of hungry agents nipping at your heals, so change the way you think about business, and find new ways to communicate to get leads.

Real estate agent helping young family to buy flat

Are You Working Blind In the Property Market?

When it comes to working in property and real estate, there is no point in being a specialist in selling multi-million dollar homes in your area, if only two homes in that price bracket are sold every year, what are the chances of you selling them? Let’s say that you did sell them; what commission would you make? What if most houses in your area sold for between $400k and $500k, and you sold 20 of them instead? Where do you think you would make more money? Makes you think, doesn’t it…

You need to do the numbers and work out where you should focus your time and effort in listings. By working out what percentage of sales each year are made in each price bracket, and in each property type (i.e. houses, units, land, etc.), will allow you to see clearly where you should be listing. Find that niche, and you can focus your efforts to become a specialist in those brackets. Or worst case, have your listing portfolio match what sells in your local market.

For example, if 40 percent of houses that sell are between the $350k and $500k price bracket, as a realtor you will need to make sure that 40 percent of your listings are in that bracket also. If you want to make the most money you can, the wise decision would be to operate in the bracket of where the most property turnover is.

There are factors within each market and sales team to be realised; take them into account if you are to succeed. Do not work blind! Become aware of your local market and the competitive advantages it can provide.

Below are helpful takeaways for you to consider, to help make your market analysis a little bit easier. You need to investigate and research:

  • Local property market turnover
  • Number of houses in each price bracket
  • Number of sales every month in each price bracket
  • Median sale price
  • Difference between listing price and sale price
  • Your average commission on listing price and sale price
  • Average time it takes to sell a home in your local market
  • Number of agents in your local market
  • Number of listings in your local market
  • Change in market over the last three months
  • Change in market over the last twelve months

If you can analyse and have an answer for each of these points it is a great starting point into dissecting the market.

Over time as the market continues to grow, it can get a little overwhelming. Aro Software has the unique ability to categorise and analyse your local property market. It’s real estate software that works the way you do, to make time and resource management more efficient. For more information on how Aro can help you mine the full potential of your local market, contact us today.