• Get out of the Estate Agent income trap

    Agents should often ask themselves whether their activity in the field is yielding the desired remuneration. In effect 100% commission of R0 is (yes, zero). To simplify this for an agent, I have plotted below a simple function showing time between payments from property transfers.

    Avoid the agent income trap

    Avoid the agent income trap

    Real Estate Agents start out with high transitory income (as defined by Milton Friedman’s school of economics) implying longer wait times between earnings than the average monthly paid and salaried worker. This means that as an Estate Agent you need the cash readily available on your money fast period to keep your personal Real Estate business afloat. Advanced Real Estate Agents in the field accommodate for easily for high transitory income however this type of agent is a special outlier. In effect the average agent’s duty is to reduce the gaps between drought seasons of income to levels of at least half a month in the South African economy.

    Questions to ask yourself to diagnose the income trap problem for estate agents:

    • Is your Direct report/Mentor/Principal a top sales performer (you need to learn from the best) with the necessary education to support your long term sustainability in the real estate sector?
    • Are you earning sufficient income to cover your expenses on a 15 day income earning timeline?
    • Are your perk value payouts e.g. Agent referrals or employee referrals, sufficient to migrate you from pure transitory income to a sufficiently liquid cash position twice every month?
    • Are you a team player?
    • Are you performing each task to the best of your ability?
    • Are you able to step up to the plate and be a leader when you need to be?
    • Are you identifying areas that you are falling short in and upgrading¬†your own skills?
    • Are you extending your network sufficiently?

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