The Law of Diminishing Marginal Listings

The Law Diminishing Marginal ListingsOne of my little brothers called me yesterday worried about whether or not he should keep his listing agent. I asked him a few questions, and he finally said, “I just think she’s too busy to list our house.” What?! Is this true? Someone is too busy to make more money? It is true, but not intentional. This is where I have developed a new law; it shall be known as the Law of Diminishing Marginal Listings. Looking at the image of the graph above, we see that the red line represents the number of listings. Additionally, the green line represents the ability to list one more property. The number of listings is increasing at an increasing rate, and will continue to increase into infinity. The green line, however, is increasing at increasing rate up to maximum capacity. After maximum capacity, the ability to list one more property changes the green line to be decreasing at a increasing rate. What does this all mean? Every Real Estate Agent only has the physical and mental ability to handle X number of properties at one time, and efficiently and effectively list/sell their properties. Once an agent reaches maximum capacity they are no longer providing a service; they actually become a disservice, increasingly, to all of their listings.

There may be a mathematical formula to equate the maximum, but there is a different maximum for each and every agent. The best way is for each listing agent to know what his or her maximum is, and make sure not to reach the maximum. Dr. Kimball said it best, “I don’t want you working at 100%. I want you working at 90%.” Why is that? Because people just get burnt out. There is no way for someone to work full speed everyday all day. Not possible. Even if they did, who would want to be around them?

The moral of the story… Ask your agent how many listings they currently have, what do they feel their maximum capacity is, and what can amount of time can they promise to devote to effectively selling your property. If you feel your agent is maxed out, then it may be time to find a fresh face in the game with only a few listings.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s