In the 2023 real estate market, a prevailing sentiment resonates: “You have to do more to get less.” Yet, this isn't as bleak as it initially appears. Delving into the tactics of industry trailblazers, a common theme surfaces: the promise of volume-centric strategies eclipsing the traditional emphasis on Gross Commission Income (GCI). In this article, we explore how pivoting from GCI to volume can be the key to navigating the market's challenges and propelling growth.
Industry Insights from the Top
At this year’s AREC, renowned real estate mogul, Ryan Serhant, shared a surprising yet effective strategy. His advice? Focus on volume through smaller deals. Serhant explained, “I’d rather do 10 one-million-dollar deals all day, every day, because those people need to move.” By serving a wider client base looking for properties within a more affordable range, agents can establish loyalty and maintain a consistent flow of income. This shift towards volume rather than the dollar value of transactions helps build a robust business foundation. Get the AREC 2023 Fieldnotes here.
Mark McLeod, Ray White Group's Chief Strategy Officer for Real Estate, echoes the sentiment, suggesting agents should transition their primary focus from GCI to volume. He emphasises creating “blocks of performance,” setting progressive goals like 50, 75, or 100 sales a year. As he aptly puts it, “The dollar value of the product or the commission you get for selling it is irrelevant. The one true measure of a business that is moving forward is volume.”
Volume: The Real Game-Changer
Here’s where the numbers come into play. While the average sale prices and commissions are variables you can't always control, volume remains the one consistent lever within an agent’s reach. Gone are the days when GCI was the primary metric of success. Instead, the focus has shifted towards the number of successful transactions.
Increasing transaction volume is more than just a strategy; it's a mindset. It means proactively prospecting for opportunities, being diligent with follow-ups, and maintaining a vibrant energy regardless of market fluctuations.
The Bottom Line
Now is the time to embrace volume over value. Just as agents advise clients to see the potential in properties, we too need to see the opportunities embedded within the current market challenges. 2023 might be asking us to do more, but with each transaction, we’re building resilience, adaptability, and a portfolio of genuine, lasting relationships.
So, with this perspective in mind, one question remains: Are you the agent who waits for the big commission or the one who harnesses the immense potential of volume?