Understanding The Law of Averages in Real Estate

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What is your comprehension of the “numbers game” in real estate? 

There is a saying that every “NO” is one step closer to your “YES”…

Well, how many “NO’s” are there before a “YES”?

  • Although outcomes will vary widely upon your strategy, there are some known factors that will help you align best practices. 

To answer the previous question, there are actually several “NO’s”! Be prepared!

Some are angry. Some are subtle. 

Some are hidden behind a “…maybe” and some are after your explanation as to “Why did you contact me?” 

Be mentally prepared for the many answers you’ll get. 

Prepare to have “thick skin” because the faint at heart won’t survive.


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Its actually astonishing how mean people can be when they don’t know you or the interaction is not face to face. Welcome to the life of a sales person.

Coming from a career driven by tasks and operations, sales is the opposite of my background. 

You see, sales people are usually great at accomplishing a task driven by their ability to persuade someone else to purchase a sale item or service.

While task driven people are usually great at completing a task that will support the production of that sale item or service. 

Unfortunately, MANY sales people will sell you something they DON’T believe in! In fact, there are sales people that will sell you something that is outright garbage – of no use to you.

If you agree, it’s on you. “Every man for himself” so to speak…

This is exactly why people are out right mean to sales people. “Do you need any help?” – Sales rep asks… “No thank you…I’ll let you know if I do…” – Customer responds. 

Which really could be translated into “Leave me the hell alone,” or “Mind your own business. I’ll ask you if I need help.”

The fact is, that most sales people are NOT TRUSTED. 

Although some may be trustworthy, in general, people tend to be defensive when they are approached by any sales person. People try to protect themselves from the unknown. 

They don’t know if they are dealing with an outright liar who doesn’t care about them at all or if they are dealing with someone that is really superb at what they do and has their best interest at heart.

Direct opposites of each other. One being a true godsend – and very helpful- and one being a complete waste of time and energy. 

Just a little “food for thought”, when it comes to your interactions with customers out there, you are a salesperson. 

Your ability to build trust is the most important component in your toolbelt. 

This characteristic is not only important for sales people. Its important for everyone. Its just that sales people will have it a little harder because they are responsible for a degree of persuasion with the customer. 

The fact that you have no knowledge of the customer’s mind-state on the topic you’ll present, can either be a simple or a very challenging task. Some interactions will be successful and others will not be.

The ability to style flex based upon the characteristics of your customer is key. Some want you to get to the point, wasting no time.

Give them the pros and cons, and why you are best to represent them quickly. While others may want you to provide emotional support and show care before they allow you to establish that trust to begin closing the deal.

The latter path may take longer with the emotional customer, but it will get you to the same goal. Overall, people skills is definitely a key component.

Each customer is a potential lead. So, as you cycle through these leads, your filtering capabilities must be on high alert. Some “no’s” could be “maybe’s” and some “maybe’s” could be “yes’s”. 

In order to distinguish amongst the possibilities, your attention to detail must be high. You also must know people well.

Meaning you can evaluate body language well.

Even recognizing body language on the phone is important.

Body language on the phone would be simply depicted by the tone, pace and dialog used by the customer.

Every context clue is crucial.

Understand that if you are a trustworthy person, it is key for you to exude trust quickly.

Every word you speak is either going to grant you a few more seconds in the conversation, or the conversation could end quickly. 


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So how many people do you need to filter through until you have a deal? 

Well the industry average is roughly 5% of your leads (that are interested in what you’re offering) will translate into deals. 

  • Generating interested leads is a separate topic.

Here’s a breakdown into what that process will look like once you have interested leads:

  • 20 leads are interested and have agreed to, or initiated, correspondence with you.
  • Of those 20 leads, you will successfully set up 8 appointments to meet with the leads.
  • Out of the 8 appointments, 5 will be interested in your offer.
  • Out of 5 offers, 1 will accept your offer.

Follow Ups

A real estate call center is completing its follow-up calls to potential sellers.
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It is possible that more leads may convert to deals, but only time will tell.

Based on experience, I estimate that 80% of all leads are not interested in acting right away. Maybe 20% are interested in acting right away (or closing quickly). 

Therefore, the one accepted offer from the above ratio, has a 80% chance of being a deal for the future – and will not be a quick close. 

So to calculate this, this amounts to 4 out of 5 leads, that are willing to work with you, will be deals for the future. 1 of the 5 deals, will be a deal that is ready to close quickly.”

The future” could mean, one month from now, 3 months from now, 6 months from now, or a year from now. There are several leads that I have worked with for over a year.

Understand what this means for your numbers. 

20 leads will lead to 8 appointments. 8 appointments will lead to 5 offers, and 5 offers will lead to one deal. 

So, for a deal to close quickly, you’ll need 100 interested leads. 

  • Of those 100 leads, you will successfully set up 40 appointments to meet with the lead.
  • Out of the 40 appointments, 25 will be interested in your offer.
  • Out of 25 offers, 5 will accept your offer. 
  • Of those 5 accepted offers, 1 of those 5 will be ready to close quickly.  
  • The other 4 will be deals in the near or far term.

Extended Averages

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So what does it take for you to get 20 people interested in what you’re offering?

Well, this comes down to your marketing efforts. Direct mail, door knocking, cold calling, online advertising, and networking can all contribute to your lead pool. 

Devote focus accordingly and measure your results. You may find advantages in some lead strategies opposed to others. Align the best practices where you get more for your money.

Be certain that, for every strategy you pursue, there is a law of averages within each.

A common known factor in business is the 80/20 principle – The Pareto Principle (get book here).

  • This principle states that 20% of your activities will contribute to 80% of your results.  
  • Likewise 80% of your activities will contribute to 20% of your results. 
  • Identifying the 20% of your activities that generate 80% of your results in your business is key.

This principle also relates to people and their business acumen. 

  • 80% of the people you encounter will produce 20% of the results in their industry. 
  • 20% of that same group will contribute to 80% of the groups results in that industry. 

It is important that you, not only identify the 20% of your own activities that generate 80% of your business results. But, you also identify the people who you partner with, are of the 20% of the people in their industry that contribute to 80% of the results.

All of these factors contribute to a law of averages. 

From finding partners, to your direct business results, everything is a law of averages.  

How many people you talk to, and your ability to identify favorable attributes, are all key components for the success of your business. 

  • Take note of them and be certain to maintain forward progression. 
  • Do not stop when it gets tough. 
  • Keep marching through to make it to your “YES”. The “NO’s” will be abundant. 

However, making it to your goals will depend on you being alert, detail oriented and triumphant. 

Keep up the good work, faithful readers-future leaders!  Your goals are one thought and one action away! Keep striving for growth, and striving to exceed expectations.

Love ya and keep at it!  

Please comment your experience with the law of averages.