Instructions can only go down one of two ultimate routes…they become and exchange or a withdrawal. The former makes you money, the latter costs you money.
Many agents pay surprisingly little attention to their withdrawal rate – however, it is a good snapshot of an estate agency branch’s effectiveness.
As a starting point, it would be interesting to assess your performance as an office or individual valuer in 2012. To do this, the following calculation applies…
The critical calculation…
1. Available resale stock as at 1/1/2012
2. Add total number of resale instructions over next 12 months
3. Subtract number of net resale sales agreed during that period
4. Subtract available resale stock total as at 31/12/2012
5. This gives a total number of “withdrawals” the 12 month period
The calculation completed…
6. Take total number of withdrawals for the 12 month period
7. Divide by total number of resale instructions taken during 2012
8. Multiply by 100
9. That shows the withdrawal percentage (range around the country is between 20% and 80%! 25-30% is a reasonable expectation)
10. Take average fee on net sales during that period and multiply by withdrawals total
11. That shows the amount of missed commission during that period….
12. But the true cost is much more significant than that because of money invested in time, marketing, printing, postage, communication etc etc PLUS THE HIDDEN COST OF YOUR TARNISHED REPUTATION WHERE YOU HAVE FAILED TO SELL A PROPERTY!
The key action to take from there is to ensure training and coaching is provided to all staff who are responsible for vendor contact – we run an extremely effective “Exceptional Client Care” halfday training session which has had an amazing impact on reducing the withdrawal rate of estate agents around the country. For further information, please call us on 01480 405583 or email firstname.lastname@example.org