Real estate agents who work an average of 21-39 hours per week make about $46,000 annually. Agents that work 60 hours or more a week make $145,000 annually. As you can see, the more you work, the more you make. But what if you could use marketing to build your business without working so hard?
Budgeting for marketing is a delicate balance. You need to have enough marketing to have a positive effect but not spend so much that you’re hurting your bottom line.
This guide will help you understand your marketing budget and how much you should plan on spending for your real estate marketing.
How Much Does the Average Real Estate Agent Spend on Marketing
A good rule of thumb is to spend about 10 percent of your commission income on marketing. As a new agent, this may seem like a lot, but it’s really a small percentage of your income to ensure your real estate business grows. If you wait to spend money on marketing until after you’re making commissions, then it could be too late.
It can be tough to determine your commission income if you’re brand new. In this situation, determine what you can afford to spend out of pocket on marketing. Even if this budget can only cover business cards.
When to Spend More on Real Estate Marketing
If you’re in an area with high competition, you need to consider this with your budget. You’ll need to make your services highly visible with plenty of advertising in multiple locations. This means having a larger budget that can cover the increased need for marketing.
Pay attention to the value of the homes you’re working with. Higher valued homes need to have higher value marketing. This means spending more to have the quality and image that represents the quality and value of the homes. You want your real estate agent branding to be reflective of the homes you’re selling.
In these situations, you may find that spending 15-20 percent of your commission income on marketing is well worth the increase in business. With the increased budget, you can increase the volume of marketing or the quality of it.
Calculate Your Marking Budget
Before you start spending money on print materials and paid online ads, you need to calculate the budget you’re working with. There are three things you need to find out before you can do any calculations.
- Average commission and sales
- The final sale price of the homes you sell
- How many transactions you complete quarterly and yearly
Keep an eye out for any transactions that may cause your numbers to be outside of the normal. If you have more than one year of data, that’s even better. You can use this to see year over year trends.
For many people, it’s tough to watch their income total go down. It’s tempting to skip marketing and keep all of your income for yourself. However, not investing in marketing means you’re not investing in your real estate business. When your leads and prospects start drying up, you’ll need to put more effort into marketing to make up for the decline.
Balance the marketing budget you wish you could have with the budget you can actually afford. It can help to figure out how much you can afford yearly, then break it down to quarterly or even monthly. This helps keep you on track throughout the year.
Allocate Your Budget
Your next step is to break down your total budget number into a marketing strategy. This lets you strategize how you’ll market your business and properties. Consider these real estate agent marketing tools and how much of your budget you want to dedicate to marketing for them.
- National marketing
- Local marketing
- Public relations
- Content marketing
- Social media
- Paid advertising
- Market research
- Sales campaigns
You don’t have to spend money on all of these efforts. If you have a local business, then national marketing is unneeded. Perhaps you’re comfortable handling social media efforts on your own and don’t need a budget for this. If you write your own blog posts, then your content marketing budget wouldn’t be needed either.
Some real estate agents look for an all-in-one real estate agent marketing company that handles several of these efforts. Be careful with these. They may do a lot, but they don’t do anything well. Many of these services are sales companies disguised as a marketing agency. You pay a monthly fee for a cookie-cutter real estate agent marketing package.
Sample Real Estate Agent Marketing Budget
It doesn’t matter what the size of your market budget is; you need to maximize it to get the most of it. Remember that one of the most effective methods of marketing is completely free. Networking is a real estate agent’s secret weapon when it comes to marketing, and it doesn’t cost you anything but time.
Budget Marketing Plan
With a small marketing budget, the first thing you should do is order business cards. Hand these out while networking so that people have a way of contacting you. The second spend should be on a website. This is where you can establish your expertise and feature your available listings.
Write weekly blog posts on helpful topics to build your brand and establish trust. You can then promote those posts on social media accounts. This helps to get the word out about your services.
Mid-Range Marketing Spend
With a mid-range budget, you can splurge a bit more, but it’s also important to stay active in your efforts. You could hire a professional photographer and create print materials for neighborhood canvassing. Have a direct mail campaign that targets active local areas.
Stay active in the communities you find have the most potential. Develop a reputation as the go-to person for that community. Get active in community events such as sponsoring activities or volunteering your time.
Luxury Marketing Ideas
With a large marketing budget, you can spend on marketing efforts that buyers expect. If you’re selling a multi-million dollar home, then your marketing needs to reflect that. Hire a professional photographer to capture the beauty of the home. Consider having a video, or virtual walkthrough experience created.
Instead of just hosting an open house, make it an event. Hire a piano player, catering, and even valet parking. Instead of featuring all of your properties on a single website, give your high-end properties their own website. Turn it into an experience with a photo gallery, videos, community profile, downloadable brochure, and an online contact form for showing requests.
Get Help With Your Real Estate Agent Marketing Content
Now that you know the answer to how much does the average real estate agent spend on marketing, you’re ready to start planning your marketing budget. Start by knowing how much you can afford.
Then once you have your budget, you can decide where you want to spend it. Look for ways you can maximize your budget. Content and social media are relatively low cost but deliver big results.
Contact me today and give your content marketing a boost with quality blog posts for your website.