Our tips for staying in business during a downturn
Seasoned real estate agents that have experienced boom and bust cycles in real estate are not scared of cycles in the market. Why? Because they know what to do. They know that it’s a phase the market goes through and they welcome the change.
There are different seasons in the weather and there are different seasons in any real estate market. They know that it can’t be summer forever. They have trained for all markets and they KNOW what to do.
So…. If you haven’t experienced cycles in real estate, here are some tips to help you when real estate appears to be making a move south.
When the cycle changes, one thing you start is to realise how good you had it. You may have previously complained that competition for listings was highly competitive or you may have complained you had too many people through your open house.
Then one day, it changes. Things are different. Depending on your market, listings may start to dry up, or you may have loads more listings simply because the properties that are on the market, stay on the market for a while.
Suddenly everyone is saying properties are overpriced and buyers have vanished.
You have less people through your open houses and you have less enquiries off your advertisements.
Agents will tell you that if a property isn’t selling, it’s the price and that can be true, you also need to work harder and smarter to find buyers. You may also need to obtain a price adjustment.
But.. How did we get to this place?
There are a number of things that can cause a real estate downturn and I won’t go too much into that.
I would like to say however that loan rejections this year have gone up substantially. What happened? One can only surmise that the Banking Royal Commission had something to do with it.
Buyers who one or two years ago were a sure thing on obtaining a loan, some are now having copious amounts of trouble with the same lenders. Some just can’t get approval for funds.
What’s happening on your side?
It now seems you have to fight twice as hard for every listing and every sale.
Agents seem desperate and some try every underhanded tactic in the book. They try underhanded tactics to coerce your sellers, they try underhanded tactics to intercept your buyers.
So where does this leave you?
You may have felt a bit shell shocked and a bit jaded with everything else that’s going on in real estate and you may think… now this!
Let’s turn this into a positive. Because there are definite positives.
Firstly remember that people always need to sell. Always. They need to sell for loads of reasons – because they were transferred with work, they have to upsize, they have to downsize or they have to sell because of the 3 D’s – Death, Divorce or De Bank! So no matter what, there will always be real estate transactions, that’s not the question, it’s just a matter of whether or not YOU will be involved in those transactions.
We know that properties will always sell, it just depends on the price. If you doubt this, then consider if you reduced the property price by half.. Would it sell? Of course. This demonstrates that the property will sell, it’s just the price we need to work out.
Firstly when it seems like there are minimal sales happening, first thing you need to do is actually source the hard data to confirm exactly where you stand. How many sales are REALLY occurring in your area?
From this, calculate how much commission this would relate to. For example, if there are 200 house sales in your area for the year, and your average fee is $15,000 that’s a total available commission of $3 million dollars.
From that, consider that if you had every one of those sales, how would your bank balance be? If you had 50% of them, how would your results change?
When you see this, know that you can tap into that income.
So if you are you down about real estate, let’s look at some more tips to survive in a tough market.
- Get your head right.
Do whatever you need to do to get your mind right. You must keep your head right when others are losing theirs.
Listen to great things – watch inspiring videos, podcasts, audio etc
Show your value.
Get better at listing presentations.
Stand out from the crowd. EAC provides free interactive property marketing webinars that explain why and how video marketing and 360 virtual reality tours can give you a point of difference and help you win that next listing. Call EAC on 1300 137 161 and we will show you how.
- Know that you CAN do this!
- Know your outcome – Set your goals.
Start with the right goal in mind – Make it about the outcome. The outcome must be to help the seller or the buyer.
Don’t make everything about you.
If you are a great agent and you will look after the consumer better than anyone you know, you need to become their agent. You have a responsibility to look after those sellers.
- Do a business plan that outlines your preparation and your actions.
Have actions you are committed to doing.
Have results you are committed to achieving.
Work smarter AND work harder.
Do the basics – nothing is better than meeting new people, seeing your old clients, and having others refer people to you.
- You must have honest conversations.
The sellers need to know the truth. When the market is turning, it’s your responsibility to tell the owners. That’s what they will pay you for.
On building the relationship, let them know that you are going to tell them to truth.
- Follow up.
Make sure that you follow up all buyers and all sellers.
When properties are on the market for a long time, at some stage you will probably meet those owners. Impress the heck out of them. When they go to sell, they will remember how well you treated them, how much you followed up them as a buyers.
They will get first hand how you will treat buyers on their property when they list with you. They may also have experienced mediocre service from mediocre agents.
Keep in contact with the properties you have appraised and you didn’t get – Think about ways to call them in a non-salesy way.
- Always monitor your results.
Know what’s working and what’s not working.
What matters most in this market has A LOT to do with your mind. Guard your mind with your life, follow some basic principles as I have mentioned – work smart and work hard.
Lisa B, EAC Industry Reporter and Real Estate Coach and Trainer.