Working backward from the income you want
An income goal turns into a work plan once you know three numbers: what you keep per closing, how many closings come from people who already know you, and how many paid leads it takes to produce one more.
The math
- What you keep per closing is the sale price × your commission rate × your split, less brokerage fees.
- Closings needed is your goal divided by that amount, rounded up.
- Closings from repeat clients and referrals come off the top.
- Paid leads needed is the remaining closings divided by your close rate.
The number that moves everything
Look at the table of close rates. Going from 1% to 2% halves the leads and the budget you need. That is why answering quickly, following up for months and keeping in touch with past clients usually beats buying more leads.
Online leads are commonly estimated to close at roughly 0.4% to 3%, and many take months to act. Use your own rate if you track it. To find what each lead source really costs, use the lead cost and ROI calculator.
Questions agents ask
How many homes does an agent need to sell to make $100,000?
Divide $100,000 by what you keep per closing. At a $420,000 price, 2.5% and a 70% split you keep $7,350 a closing, so about 14 closings before taxes and expenses.
What is a good lead conversion rate in real estate?
Online leads are commonly reported to close at roughly 0.4% to 3%. Referrals and past clients close far more often. Track your own rate by source, because it varies widely.
Does this include taxes and expenses?
No. The goal is income after your brokerage split and before taxes and business expenses. Use the commission split calculator to see a deal after a tax set-aside.