How much is an appraisal worth to your business?

Working in real estate, it's easy to focus on listings. That's what drives our business and it's how we get paid. But it's hard to control how many listings we have. They are, by nature, tough to come by.

At the same time, most of our goals are centred around listings. We want to list a certain number of properties each month, or sell a certain number of properties throughout the year.

But what happens when we don't reach our goals? This creates frustration that we can't easily remove or attend to. One dry month on the listing front can create weeks (or months) of feeling like crap and beating ourselves up for not being able to achieve the success we had hoped for.

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What's the cure? Is there a better way?

I'm going to suggest to you that focusing on listings and sales is actually the wrong approach.

Instead, what we need to focus on is appraisals. Our goals should be centred around how many appraisals we want to generate each month. Appraisals are a type of activity we can have an influence over. There are steps we can take to generate appraisals in the very immediate future. It's a problem we can more easily solve.

One of the challenges with this approach however, is that it can be hard to get motivated to chase appraisals when deep down we know that:

The majority of our appraisals won't turn into listings
We'll have to compete with other agents to secure the ones that do go on the market
Some of those listings won't even sell
The payday, if it does happen, is months away

The missing link here, and the key strategy to unlock motivation, is to put a value on every appraisal you complete, even if you know it's unlikely to turn into a sellable listing.

Why would I do that exactly?

We tend to think that a listing is worth 1 big commission. Let's say $20k for example's sake. And that everything that doesn't turn into a listing is worth nothing. But this is flawed logic.

Most salespeople need to complete 4 appraisals for every property they list and sell. Sometimes more, sometimes less. Therefore, if every listing is worth $20k. Then every appraisal is worth $5k.

Some of those appraisals won't end up going on the market, some will just be tyre-kickers wanting to have a chat about the market, but if you know that in your business, you get, on average, one listing for every 4 appraisals you do, then your job is not to chase the one property that turns into a listing. Your job is to generate as many appraisals as you can.

If you generate enough appraisals, the listings will take care of themselves.

And to find the motivation to do the activity that generates appraisals, you need to understand that every appraisal is worth $5k to your business. Because every appraisal gets you one step closer to that big $20k payday.

Moral of the story?

Don't chase listings. Chase appraisals.

Any kind of appraisal is worth big money to your business.