7 KPIs Brokerage and Team Leaders Must Review Every January

Lisa Picardo

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In the dynamic and competitive landscape of the real estate industry, staying ahead requires a strategic and proactive approach. One of the key tools for assessing performance, identifying trends and making informed decisions is an annual business review. For real estate brokerages and teams, this comprehensive analysis of the past twelve months' performance and financials against the preceding year is an essential strategy to ensure sustainable growth and success.

Seven stats brokerage and team leaders should analyze every year:

  1. Agent Count: Understanding the changes in the number of agents can provide insights into the company's ability to attract and retain talent. Analyzing the net growth and dissociation rate of the agent base helps in assessing the effectiveness of recruitment and retention strategies. Also, comparing your performance to the agent count in your designated market area will help provide a barometer on how your performance compares to the general market.

  2. Units Sold and Sales Volume: Tracking the number of units sold and the overall sales volume is fundamental in evaluating a real estate company's market performance. Examining these metrics in comparison to the previous year creates a comprehensive understanding of the market trends of your brokerage or team and potential areas for improvement. It is also important to analyze how your numbers compare to that of the market you operate in and to determine if your market share has increased or decreased.

  3. Average Sale Price: Examining the average sale price of your company provides valuable information about the market segment your brokerage or team is operating in and your potential to command higher prices. It is important to understand if your average sale price has increased or decreased over the preceding year and how that compares to your direct market area leaders. This also illustrates whether your average sale price is higher or lower than the average sale price in your market.

  4. Average Commission: Analyzing the average commission per transaction side for your company overall is of paramount importance. With the recent compensation lawsuits and the possibility that buy-side commissions could be decoupled, it is important to examine commissions on the buy side and the list side separately.  Additionally, understanding the difference a decrease of just 0.1% has, aids in evaluating the revenue streams for your brokerage or team.

  5. Company Dollar: Company dollar is a measure of the company's retained earnings after agent commissions, franchise royalty fees and referral fees are paid. It is important to analyze if retained earnings are increasing or decreasing over the previous year to provide leaders with insights into the financial stability and long-term sustainability of the brokerage or team.

  6. Operating Expenses: Examining operating expenses is crucial for identifying areas where the company can optimize costs without compromising efficiency. Some of the newer, fast-growing, non-traditional real estate business models have found ways to reduce operating expenses, particularly facility and personnel expenses significantly. Analyzing these expenses in the context of the previous year's figures allows for strategic decision-making to enhance operational efficiency.

  7. Return on Revenue: Calculating return on revenue and net profit is the ultimate measure of a real estate brokerage or team’s success. It will provide a comprehensive overview of the business's profitability and financial health. Return on revenue is the bottom line profit as a percentage of the gross commission income a brokerage or team is generating. Comparing these figures to the previous year's performance provides a complete understanding of the company's growth trajectory.

How we can help

T3 Sixty conducts a significant number of annual business reviews each year for brokerage and team leaders. Our consultants work with brokerage and team leaders from organizations of all sizes and models, including franchises and independent brands. In addition to providing benchmarks and best practices on these key performance areas, we analyze organizational structure, technology systems and marketing.  We can help you navigate challenges, seize opportunities and foster sustainable growth in the ever-evolving market.