[shredder]

Ok, I have a different slant on marketing budgets for listings. Please let me know your opinions.

Here it goes:

1. Lets say after running your business plan you budgeted approximately 5% of GCI to marketing specific listings.
2. Lets say that on average 50% of your listings sell and 50% expire.
3. Lets say for sake of arguement that the average days on the market is approximately 6 months.

Ok, phew got all that crap out of the way.

1. Say you took a $1mil listing at 7% (4% to you the listing agent, 3% to buyers agent).

A. That gives a potential commission of $40k to you the listing agent.

2. But, because only half of your listings are selling - you're real potential commission average is about $20k.
3. Now, earlier we said we wanted to only budget 5% of GCI to marketing specific listings - so that gives us $1000 to market this one listing.
4. Average time on the market is 6months, so $1000 divided by 6 is about $167/mnth to spend on this listing.

What do you guys think? I'm considering using this as a plan in 09, but I'm not sure. The hope is that some properties will sell much sooner than 6months and some much later. Hopefully the law of averages will come into play here.

- Shredder