How To Determine What Your Real Estate Business is Worth

How To Determine What Your Real Estate Business is Worth

Can you sell a real estate business? It’s a good question.

Would you buy your real estate business right now? What could you sell it for right now?

The secret is that a real estate business becomes successful when you measure one metric and that is called Return On Relationship, your R.O.R.

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So what do you do to get your R.O.R to soar? To get that number way up there?

Calculating Your Return on Relationship

Let’s imagine that you have three parts of your business. You have the before unit, the during unit and the after unit. The before unit’s all your marketing, your advertising, your promotion. The during unit is the experience people have with you. The after unit is all of your friends, family members, and spheres of influence. Basically all of the people who know you, like you and trust you.

Your R.O.R. comes from your after unit. Imagine that you have 150 people in your after unit, and over the course of a 12 month period, that 18 of those 150 people either bought a home, repeated with you or refer someone to you. The return on the relationship would be 12% because 12% of 150 is 18. You would say my return on relationship is 12%. That’s a number I would encourage you to take a look at. Look over the last 12 months and the total number of people in your after unit, the total of transactions that came from that, divide that and what you’ll find is your current ROR.

Last 12 months:
Total number of transactions ÷ total # in after unit = Return on Relationship

Where You Want Your R.O.R. To Be

The gold standard, the one that we should measure ourselves against is 20%. So if you come to us and you have 100 people that know you, like you and trust you, our goal certainly is to get it up to 150. However, while you have 100, we want to get 20% or 20 of those people to introduce or recommend or repeat with you in the next 12 months… that’s our gold standard.

We have agents that have been with me for 15, 18, 20 years that now have like 75% return on relationship and they have 150 people. So anything is possible if you put the right systems and processes in place, and that’s your intention from the beginning.

How To Get Your R.O.R. to SOAR

So if you are reinventing your business right now. Or if you’re restarting right now. Or you’re looking to say, “Hey, I’ve got to have a better way to do this. I’m just on a hamster wheel always looking for my next client,” then you might want to check out how By Referral Only offers to help agents & lenders with the systems to make it all happen so you can focus on return on relationship, your ROR.

So let’s get your ROR to soar. Learn More Here.