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Every day we hear about the rising cost of living.
(The fourth in a five-part series addressing the biggest challenges for real estate professionals.)
It is something we can never avoid and which impacts every business. For real estate professionals it seems we are shelling out more and more and every time we turn around someone wants money from us.
From wages to waste disposal, from computers to cleaning, the cost of doing business is skyrocketing.
Whichever way you look at it we spend a lot of cash every year just keeping the business running.
You’ve just paid $120 to fill up your car, paid thousands out for various insurances, and paid the rates on your shopfront and then you get a seller wanting you to lower your commission.
That seller does not understand how much we do when it comes to selling property.
An American expert listed 184 things agents do in EVERY transaction.
“The general public is not aware of all the services that agents provide to sellers and buyers during the course of the transaction, probably because most of the important services are performed behind the scenes,” she said.
A lot of the things we do are second nature to us and we do them automatically, like making a kerb appeal assessment and arranging for a sign. A simple thing like making a call to update a seller is quantifiable. If we bothered to do a calculation, a 10-minute call at a consultant’s charge-out rate of $300 an hour (and that is modest compared to some industries) would be $50. That doesn’t include the cost of the phone and phone plan. Take a lead from lawyers. Some charge by 3 ½-minute increments and charge for every phone call, photocopy, postage and every time they think about you. I am not suggesting we go down that road but it is worth keeping mind.
Our commission structure is open and transparent. Our additional costs are open and transparent. Sometimes it is necessary to explain all of this but it is my belief we are giving great value for money.
That said, there may be some ways we can reduce our cost of doing business.
With fuel prices the way they are consider investing in an electric vehicle or a hybrid. Both of which will save you serious money in the long run. Most of us do a lot of mileage but within a fairly small area and there are plenty of opportunities to recharge.
Stationery and printing are part of our lifeblood, with all sorts of documents and flyers to organise. Do a full audit of everything, from pens and paper clips through to the number of flyers you need for each property. You’ll be surprised at how quickly savings can be made.
Finally, and this is certainly not for everyone, consider how important it is to have a shopfront. How many inquiries do you get from window displays? Research showed 97 per cent of property buyers have seen a home online before contacting an agent.
Could you run your business from a cheaper office, maybe on a first floor? If you are a sole operator, do you need an office at all?
If your business has a big rent roll in a well-populated suburb you will need somewhere for your rental manager to work but can it be done in smaller premises?
What is important is that you start thinking about how you can save money on your business outgoings.
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