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Seasonality is a fact of life in the real estate industry, and your work schedule likely mirrors this cyclical trend. In fact, NAR data has shown that 40 percent of an agent’s annual sales volume occurs within a four-month period (May, June, July and August).
So, what does this have to do with your personal finances? Well, a chain reaction of events occurs that makes it vital that you make impactful financial decisions in the midst of your heaviest workload of the year.
Chain reaction
Since 40 percent of sales transactions occur during the summer months, that leads to 40 percent of your annual income being generated within that time. This leads to your need to decide how to best deploy that hard-earned commission income right in the middle of your busiest time of year.
This is the biggest financial hurdle real estate agents must face, and these are the two biggest pitfalls I see agents succumb to:
- The most common scenario: You spend so much time on your business, serving your clients at the highest level, that you simply neglect decision-making around your personal finances. You pile up a mountain of cash in the bank but never put it to work.
- Less common, but we see it: Same work ethic and business drive as scenario No. 1, except instead of piling up cash in the bank, you end up spending in line with whatever comes in.
Keep in mind that neither of these scenarios occurs purposefully. Rather, they occur due to a lack of information available to help agents make…