Three More Reasons to Care About Real Estate Contact Management

In previous posts I’ve looked at some of the symptoms of poor real estate contact management, and some of the ways good contact management can make an Agent’s life easier and less stressful.  Today I want to outline three more reasons why contact management is critically important to your success as an Agent.

First, I know it’s a cliché but it’s true – most people do business with people they know and like.  It really *is* all about relationships!

Secondly, research has shown again and again that successful agents – those that earn six figures consistently year in and year out – get 80 to 90% of their business from existing clients and referral sources.

The third and final reason is one I’m going to spend a bit more time on, because it’s so important that you understand it.  I think you’d all agree that when you get right down to it, as a real estate agent, you have only three real assets:  your knowledge and expertise in real estate sales, your reputation for the good work you’ve done, and your contacts database.  And of those three assets, only ONE is a tangible asset, and that’s your database

Most agents have no idea of the true value of their database, so let me give you an idea.  For illustrative purposes, let’s make some very conservative assumptions:

  • You have a database with 50 contacts on your “A” list
  • Each contact will move on average once every 10 years, and you represent the client on both ends
  • Each “A” list contact knows at least one person who will move each year, but you won’t get them all, so assume you get one referral every three years from everyone on your “A” list
  • Your average commission on a purchase or sale is $5,000

Based on these conservative assumptions and simple arithmetic, your database – if properly managed and nurtured – will provide you with $125,000 of commission income per year, or $1,250,000 over a 10 year period.

So that’s the “hidden value” in your database.  Depending on the size of your “A” list, it could be a bit less or considerably more.  But regardless, your database represents a true gold mine and a tremendous opportunity for income and wealth.  But sadly, most agents never realize this value – they never “mine the gold” that’s available to them.  And the reason for this is very simple – they don’t know HOW. 

In future posts, I’ll outline some of the fundamentals of effective real estate contact management.  It’s not as difficult or time-consuming as many agents fear – and the return on investment can be staggering.

If you’re already convinced that you need a great real estate contact management system, you can download a free 5-week trial here.