How is rookie potential calculated and how do I use it?

How is rookie potential calculated and how do I use it?

Relitix rates every agent with less than 36 months in the MLS on their demonstrated potential to succeed in real estate. Our Rookie Potential Rating is designed to be a tool to allow recruiters and managers to compare newer agents against their peers without having to do the mental gymnastics of compensating for their newness in the industry. The rating is expressed as a percentage from 0% to 99%. 

How is it calculated?
Rookie potential rating is a true machine learning-derived metric and relies on a model which was trained by example.  We constructed the framework of the model and provided it with over 1 million examples of rookies taken before their 36th month in the business culled from the historical record along with the agents production in their 4th year.  The algorithm looks at what the agent has done in the market to date, for example listings taken, closings, transactions, and expirations, and combines this data with the agent's tenure in business. Using this information, the model attempts to predict the likelihood that the agent will a) be in business on their 4th anniversary and b) be doing at least $3M/year in the closings at the point. The result is expressed as a percentage likelihood.

How accurate is it?
Likelihood prediction models are scored using a metric called area-under-the-curve (AUC) to quantify the quality of the prediction. A score of 1.0 indicates perfect prediction, with 0.5 representing a coin-flip. When we scored our model against a reserved "test set" of data the model scored above 0.8 representing excellent predictive power. Keep in mind that very new agents have very little data to work off while agents near the end of their rookie period have quite a bit of data - expect that the predictions will improve on an individual over time.

What do the numbers mean?
As mentioned above, the RPR represents the likelihood that an agent will a) be in business on their 4th anniversary and b) be doing at least $3M/year in the closings at the point. Practically speaking, its a way to assess rookies against each other. The $3M/year hurdle is not adjusted for the MLS median price and thus the average RPR will vary by MLS. In the vast majority of MLS's the average lies around 22%. Here's how we would roughly categorize agents by RPR:
  1. 0-10%:     Poor performers, part timers, managers who occasionally do a deal
  2. 11-22%:   Sub-par performers
  3. 22-40%:    Front of the pack - but still in the pack
  4. 40-60%:     Hidden gems, outstanding new agent prospects who may not yet be high profile
  5. 60-80%:     Recognized stars. Some may be newly formed teams of experienced agents which look like a rookie to our algorithm.
  6. 80%+   :      Lots of newly formed teams. Superstars at the center of their offices. Prolific builders agents, etc.
As shown in the table, we generally recommend using 40-60% as the ideal recruiting range. This should be adjusted based on personal experience and the characteristics of the MLS.

How do I use it?
There are a number of ways to utilize this metric:
  1. Finding diamonds in the rough: The ability to find new high-potential agents early in their careers is recruiting gold.  These agents are less-strongly attached to their current broker and may be more open to a recruiting conversation. If you are able to bring them onboard, they have a much higher likelihood of significant growth and, for graduated split brokerages, will do so at lower splits.
  2. Locating team members: Rookies with average to sub-par metrics might be good agents but lack the skill to generate business. Finding these agents (RPR perhaps 15% - 25%) combined with other metrics like a high listing effectiveness grade could be a way to target team member candidates.
  3. Identifying own agents in need of praise/remediation: Having a solid awareness of the potential of your own rookies will allow you to act in ways designed to retain the best and provide early action to remediate those falling behind.
  4. Agent pool due diligence: Anyone buying a brokerage should do thorough due diligence on the target's agent pool. A key element is assessing the quality of the pool of newer agents.
The Rookie Potential quick list
Your portal dashboard has a preset filter titled Rookie Potential.

Clicking this will return a list of agents matched to the selected offices which have a pre-set RPR range, as shown on the button. You can adjust the RPR range in the Edit Profile section, accessed by clicking your name in the upper righthand corner of the screen.

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