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Real estate invoice sample for Inventory

I know that if an agent has 20 active listings they're gonna have a great next six months and this is one of the ways they do it is they keep themselves motivated by knowing their numbers so I'm gonna share my screen with you and show you how we determine that number by using our listing inventory calculator [Music] hi this is Brian Icenhower and I wanted to talk to you a little bit today about our listing inventory calculator and it's a tool we use and that I found that is probably one of the best tools for tracking production throughout the year and what we do with a listing inventory calculator is we're trying to track the number of active listings that an agent needs to maintain at any given times to reach their desired goal for the year so a lot of agents will track and they'll track things like closed units year to date or closed sales volume year-to-date or the number of sales volume closed and pended year-to-date which is great except when we do that we're always looking in the rearview mirror we're looking at what has already has happened and we're just trying to kind of look at that and let's say that were three months into the year and at three months we've closed 30 transactions if our goal is 120 then we could say alright there's 12 months in the year so you know take three months divided by 12 we got four months all right so 4 times 30 transactions hey we're right on track the problem is you know we just have to assume it's gonna happen again that we're just gonna keep closing 30 transactions we have no view out the front windshield of the car to see what's coming and active listing inventory is what does that it's a tool that top producers use to really help not only motivate themselves but really determine what's coming down the road it creates a lot of urgency and motivation if you track it - because if you know that you need to always maintain a certain number of active listings at any given time you won't get quite so excited when one of your listing sells and goes under contract because now you know you need to hurry and get more listings so that we can get that inventory back up the desired level you'll see this happen you know a lot through spring and summer seasons if those are the hot seasons in your area in a lot of areas they are in North America the the spring and summer are heavy selling seasons so through the heavy seasons it's very hard to keep your inventory up because it keeps selling and the worst thing that can happen to a top producer is have no more lists no more listings we have no product to sell and we can always count on having a lot of active buyers in those hot seasons so we want to make sure that listing inventory is up and it works in slow markets too if the markets low you just need to carry even more listings to ensure that a lower percentage of them still can sell and you could still hit your goals so listings drive this business they also drive lead so having a lot of listings active at any given time will start to attract a lot of buyers so if buyers are what you're after you need to have a lot of listings that's you know you got to kind of have the flower if you want to catch a bee chasing a bumblebee around town it's gonna be tough but if you had a lot of listings the the bumblebees will come to you and you'll get a lot of buyers so that activit listing inventory is huge so I know that if an agent has you know 20 active listings they're gonna have a great next six months but if you know conversely if they only have two well we're gonna have a shaky next six months because we're not sure how much you know how many transactions we're gonna have but they can actually move ahead with confidence if they know how many active listings they need to maintain at any given time throughout the year so that's where I think top producers differ from from a lot of lower producers is they're really geared towards listing inventory and keeping it up so they're constantly motivated to do the activities to get more business even when they're busy handling a lot of transactions that are already under contract and this is one of the ways they do it is they keep themselves motivated by knowing their numbers so I'm gonna share my screen with you and show you how we determine that number by using our listing inventory calculator it's a very simple form to use and it's really just an Excel spreadsheet - and it's something we use with all of our coaching clients but basically we're gonna be filling out the yellow space is on here and you can see my cursor moving over them once we fill out those yellow cells on the form it's gonna generate how many listings we need to carry at any given time and this is an editable form and I've already filled it out for you but I'll show you how it works basically we're gonna click on the cell that says you know what is the income I want to earn and basically what I would I had previously put in here and I'm not going to change that is 500,000 in gross Commission income here so so we start there you know what's our goal for gross Commission income and then we take our average sales price for the area and in this case we've got 400,000 is our at sales price so we pop that in and you can look at last year's numbers or you know or where you're tracking this year and put that number in and this is the average commission rate you charge you know I'd love to see three percents in there across the board and this is your commission rate per side you know seller side or buyer side you know three percents kind of an industry standard that's out there but we know commissions are negotiable so sometimes that's reduced and that's usually a little bit more indicated by if you're representing a lot of buyers sometimes on the buyers side the the listing agents only paid in two and a half to the buy sides you might see that or depending on what market you work in what's customary I put 2.5% in here to cover that one okay and that's gonna automatically those three numbers are gonna automatically calculate your average commission check and the number of units closed that you need to hit your GCI goal and then it's gonna automatically count calculate a 10% fall out rate because we know some deals just don't go through for whatever reason they fall out you know when they're under contract and they never actually make it to closing so we always want to calculate that in there just because when it happens we don't want to be that upset about it we want to know we've already calculated in our goals so that's why we've got those in there so then we take that number and it automatically adds that to the number of units you need to close then we get down to the next box that requires our effort the next yellow box asks you what percentage of your closings will be listings right here what percentage of your closings would be listing and we just want a realistic estimate you know what percentage of your transactions for the upcoming year will be listings versus representing buyers you know if you don't know put fifty percent in there usually it's somewhere between 40% and 60% for most agents they have a reasonable mix between the two so we put that in there if you're running a real estate team we're gonna do all these numbers for the entire teams we want gross Commission income at the top for the whole team all the Commission checks of all the agents added up and everything else will you know same with your team what percentage of your team's closings will be listings we do it there as well too so we put that in there I'm gonna do some multiplication for you and then we can move down to the next box where it says what percentage of your listings will actually sell and we just want a realistic estimate if you do a lot of referral based work you know with your sphere of influence typically those are gonna actually sell you have a good relationship with them it's easier to get price reductions and price them correctly off the bat so you know you could be anywhere between 70% 90 here you know some of them will expire they won't sell because you have unrealistic sellers maybe or the houses in just such poor condition or it's just too unique we do I I really caution yourself against putting a hundred percent in here because usually you do get one listing that won't sell from time to time and you want to put it in here so it doesn't throw off your numbers so this is kind of a high number ninety percent my opinion I like to see something usually around 70 80 percents usually a little bit more realistic but you know your numbers better than I do so put in what fits you finally we move down to what's your average days on market in in your Multiple Listing Service in your area and again this number is usually gonna be a little bit higher than you think too often times you say well I'm getting all my houses sold in 30 days but if you look at the average days on market you know you'll see it's a lot higher like 60 70 80 who knows understand that's because there are some listings out there that just sit forever and throw the whole average off and quite frankly you typically have some - I mean if we're gonna count them as listings as part of our listing inventory you have to account for having some listings that just take a long time to sell because remember this is an average days on market not what typically happens so put something in there you know you could do one of the best ways to do that is just look in your MLS at your MLS is average days on market and use that one if you think that your skills and pricing abilities are a little bit better you might want to drop it down a little bit lower than that as well - but just put a realistic number in there then down at the bottom it's gonna actually tell you in the black shaded box here based on these numbers this agent needs to carry ten active listings at all times throughout the year to hit their goal and doesn't sound like a lot maybe to some of you to make 500,000 and gross Commission income but understand that means at all times so we always have to carry ten if you have a bunch of listing sell and you go down to eight that's going to and you only have eight listings for one month out of the year that is gonna actually lower your trajectory towards your goals and you might be on path to earn four hundred and twenty five thousand we need to always be above that number so that that's our that's kind of our breakeven threshold for our goal so it's safer to carry twelve and thirteen in case a few of them sell you can still be happy about it when they do so down below then we're gonna actually kind of bridge the gap a little bit by look at looking at the number of listings you currently have and this agent has quite a few they got let's make this a little bit more realistic let's say that this agent has only five listings that means they they currently are below their threshold and they need to get five more right now in a hurry to get up to the inventory requirement needed to stay on path to hit that five hundred thousand dollar gross Commission income goal anyway so that's how we use the GCI calculator and when you get a number like this like the number ten that number ten is very important so we kind of keep that close to our vest we keep that number at a place that we always remember keep it first to mind so we always want to keep our active listing inventory above that number if we start putting a lot of things under contract please don't get busy and start working in your transactions 100% of the time we also need to keep one eye on the future so that we do keep our marketing departments open and we are out there trying to get more listings to generate more new business if we want to stay on track with our goals okay well thanks a lot everybody and appreciate you spending time with me today you