Why the 80/20 Rule Matters for Realtors


Realtor friends, navigating the real estate industry requires more than just determination and hard work; it demands strategic thinking and the ability to identify what truly moves the needle in your business. You’re probably acquainted with the 80/20 Rule, a principle that, when applied correctly, can be transformative. But how do you best apply this concept and tailor it to the unique challenges and opportunities within the real estate sector?


80/20: The Origin and Application

Vilfredo Pareto, a 19th-century economist, observed that 80% of Italy’s wealth was held by 20% of its population. This disparity in distribution has major implications, leading to what we now refer to as the 80/20 Rule, or Pareto’s Principle. Pareto’s Principle has grown beyond its original applications in economics and mathematics and has gained a modern, populist interpretation:  it postulates that a minority of causes, inputs, or efforts usually lead to a majority of the desired results, outputs, or rewards.


For you, as a real estate professional, the 80/20 Rule prompts an important question: Which 20% of your actions are responsible for 80% of your successful outcomes (closed deals and great customer experiences)? 


The 20% That Matters

So what is your 20%? Look at your past sales data, client feedback, and business operations. Where did your sales leads come from? What actions did you take to generate the lead or convert it? Invariably, certain patterns will emerge. These are indicators of where your 20% lies. It could be the relationships you’ve nurtured with past clients that lead to referrals, the focused advertising campaigns that bring in high-quality leads, or the hours spent on professional development that translate into more effective sales strategies. 


Given we’re in a sales business, the odds are high that your 20% lies in the generation and conversion of new sales opportunities. 


Once identified, your 20% should become the cornerstone of your daily routine. Allocating your time, energy, and resources disproportionately towards these high-impact activities isn’t just smart—it’s essential for growth, especially in a contracting market like the one we are experiencing now.


Redirecting Efforts for Greater Impact

However, identifying your 20% is only half the battle. The next step is to consciously redirect efforts from low-impact tasks to those within your 20%. This might mean automating certain processes, delegating tasks that don’t require your expertise, or saying no to opportunities that, while potentially beneficial, distract you from your primary revenue-generating activities.


Coming Soon: the 90/10 Rule

Next month, I will introduce the 90/10 Rule, an even more concentrated approach to productivity and effectiveness in real estate. But to really maximize the 90/10 rule, you must first understand and integrate the 80/20 rule into your daily activities. The two rules together will clear the way your time management to be a top-producing Realtor.


In advance of the 90/10 rule post, start re-evaluating your professional activities. Scrutinize your schedule, audit your successes and the paths that led there, and be relentless in pursuing the activities that have proven their worth. The aim is not to do more, but to do better—to work smarter, not harder.


I urge you to not just consider what your 20% might be, but to act on it, to shape your business practices around it, and to watch as it transforms your real estate career. After all, it’s not about the hours you put in, but the results that come out.