Stayin' alive in a shrunken real estate market
Diary of a Real Estate Rookie
By Alison Rogers, Sunday, September 14, 2008.
So we just had this discussion in the office today: How are we going to increase business?
Five years ago, lots of real estate agents knew the answer to that question: We can just get a share of an ever-increasing market! Home-ownership rates had been trending up and there were about 6 million transactions a year, so eager salespeople would just sell newbies their first home or boomers their second.
Well, the U.S. home-ownership rate crested in 2004, according to the U.S. Census Bureau Housing Vacancy Survey. It's currently at a seasonally adjusted 68.1 percent. Although that's still higher than the 64 percent that was the norm in the mid-1990s, the rate is now going down. And obviously, with less pie there's just one way to increase business -- take it from the next guy.
That sounds fine as an overarching statement, but it's more difficult to implement on the individual level. My competitors have established brands. Am I going to outspend them? Undercut them on price? Hit 'em where they ain't? Outsmart them?
Well, I have a long-range vision of what my niche is -- and indeed some of it is based on "hit 'em where they ain't" -- but unfortunately my resources are limited so little is based on outspending them. That means it's all the more vital that I carefully allocate my marketing money and time.
Here are the things I am trying to do:
- I keep towards a tight geographic focus -- I am not yet quite ready to "farm," but you might say that I'm definitely picking out the right 40 acres of land. And I am constantly thinking about how my brand ties in with this focus. I want people to think of me when they think of downtown, so as I am going through my day, I think, "does returning this call tie me in more closely with downtown? What about returning that one?"
- I am constantly thinking of my competitors' weaknesses. They are legion, but one that is fairly easy to attack is a stereotype of the industry -- many of them would say or do anything for a transaction. I try not to be that person, and in fact try to swing over to the opposite side -- I try to move mountains for a relationship.
- Stay alive. My mother was a politician, an elected judge, and I was proud that she was so successful. I learned many lessons from watching her work, and one of them was: "Outlive the bastards." Well, depending on what market you're in, around 80 percent of new agents won't make it past their first year. Lots more won't make it past this downturn. The ones who stick it out will have a leg up on the next business cycle. If my profession is going to reward endurance, I try to position myself for it -- I go to the gym (not as much as I should), take vacations (not nearly enough), and take time every quarter to congratulate myself for just continuing to survive.
- Figure out what works, and do more of it. If this seems screamingly obvious, try talking to five other real estate agents about their business models and note how many are missing this step. I get a lot of client capture from chatting on the Web, but I track it -- if a site is fun for me but doesn't bring in leads, I stop visiting it. Similarly, I'm a recent-enough newlywed that I connect well with young, soon-to-be married couples. Once I learned this about myself, I trained myself to spot an engagement ring at 30 yards. I don't necessarily grab brides-to-be on the street and try to sell them apartments -- but I know that if I end up chatting with enough fiancées, some of those conversations will end up coming around to real estate.
Take that, competitors.
Alison Rogers is a licensed salesperson and author of "Diary of a Real Estate Rookie."
***
What's your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
You must login or register to post a comment.
Submitted by Joe Baylis on September 15, 2008 - 3:28am.
Joe Baylis
Submitted by Joe Baylis on September 15, 2008 - 3:28am.
Joe Baylis
Submitted by Linda Davis on September 15, 2008 - 3:37am.
Get planting those 40 acres now and don't let the techno whizzes try to convince you that farming doesn't work. It is another great tool for your tool box and one that your competition thinks doesn't work either.
Submitted by Steve Simon on September 15, 2008 - 3:59am.
Having been in the business or training real estate agents (and handling a few select clients) for many years I have seen a few boom and bust cycles in Florida. To be sure the current cycle has the greatest amplitude of any I have ever seen! That being said I have noticed a couple of times that coming into the industry at a very rough time can have a few advantages...
The number of other newsbies is also way down. Some ofthe really established "Oldies" decide to retire. The bottom means it can't get much worse. The cycles are that cycles, and the rise is as sure as the decline. It seems to hone skills and work ethic if you come up in these times...
The best advice I would give is use the slow market period to gain skills; take a few specialty courses (land or commercial, or take a seminar on 1031 tax exchange). Set up a savvy website and a blog. Then farm the local area for sellers and farm the web for buyers (for that local area). Use the slow time to get your broker license (to further separate yourself fromthe rest of the crowd).
Lastly there is nothing wrong with having a distinct second job for extra income during tough times; I did just that a couple of times over the years.
If you make it through the tough times, you'll prosper during the "good"...
Just my thoughts:)
If the answer to a complex problem is very simple, it is usually incomplete...
Steve Simon is the lead instructor at the Steve Simon School of Real Estate www.stevesimon.us
Submitted by Don Matheson on September 15, 2008 - 5:17am.
The geographic farm is a good idea perhaps you should shrink it down a bit so that you can get started sooner rather than later. Study which parts of the larger farm are the most active, yeilding the most revenue over the last 3,6,9,12 months. Generally I would use the 3 month number. Then you can determine which area likely might be the most result rich. Determine who is the competition, how much market share do they have and what are they doing or not doing to get it. Next, ask yourself if I was number 2 agent in that area what would my revenue yield be high/low. From there you can determine what your spend should be for marketing. My rule of thumb is a 2.5 to 1 return.
Secondly,
Are there any volunteer groups I could be involved with which would raise my profile and create a greater sphere of influence?
Thirdly,
What am I doing for my past clients and am I asking them for referrals?
Forthly,
Put together a list of all service providers you use and call them, remind them about the business you send their way. In a nice way lean on them to refer you. In the event they have no referral for you in the next 90 days find a new provider.
Five,
Ask yourself if you have a system to treat your best clients the best? If not start one right away. This group is your biggest fan club and deserve your love!!!
Six,
Call me anytime I'm always glad to help a fellow professional.
Lastly check my website www.scottsdalerealestate.com we just renovated and would like your comments.
Thank you.
Don Matheson
www.azgolfhomes.com
www.scottsdalerealestate.com
Submitted by Wenceslao Fernandez Jr, BS, Realtor, CDPE on September 15, 2008 - 8:08am.
There several ways to strive in today's shifted market and the old passive ways of doing business are no longer viable.
Today's professional needs to be proactive, must have specific written goals, and a specific action plan for meeting those goals including the implementation of systems to support those activities, along with a grip on expense management and leverage.
Two books come to mind: "The Millionaire Real Estate Agent" and "Shift: How Top Real Estate Agents Tackle Tough Times", both written by Gary Keller and Co-Authored by Dave Jenks and Jay Papasan.
www.MiamiRealEstateKing.com
Certified Distressed Property Expert
Miami-Dade County, Florida.
Submitted by Michael Daly on September 15, 2008 - 8:15am.
Go Ali!!!!
Michael Daly
The Hamptons Real Estate Blog
Submitted by Michael Lange Associate Broker & Cheron Lange GRI on September 15, 2008 - 9:06am.
You know, for a Monday, I needed this blog...there are days that my time is consumed with day to day activities rather than my main focus, real estate. In a slow market, yet it hasn't been to bad for us our focus has been branding ourselves, re-doing our web-sites/blog site and yet upgrading our skills. I spend alot of time volunteering between our childrens schools, pto's (mom's stuff for the schools) and church. That has played a fortunate part in our business and yet by branding ourselves, within our surrounding home area, everyone knows us. That has been nice because the phone rings, usually for advice and yet we have had a few nice transactions.
Great Blog!
Cheron Lange
www.letourfamilyhelpyours.com
http://blog.letourfamilyhelpyours.com
Submitted by Jeff Manson on September 15, 2008 - 11:02am.
Farming is a big waste of time and money. You are better off working on your sales skills and then apply them to the following:
Call Expired listings every day. (they need a true sales person that will give them straight talk and get their home sold).
Call on all the FSBO’s everyday (they need the same)
Call you 10 or so of your COI everyday asking for referrals.
If you do these things everyday you can sell a lot of homes in a down turning market. I did these my first year in the business and sold 33 homes as a rookie in the same type of market.
Jeff Manson
American Dream Realty
Hawaii Realtor
Hawaii real estate search
Submitted by Michael Espiritu on September 18, 2008 - 4:18pm.
Alison,
I know one thing- you shouldn't be debating whether to return a phone call or not. Return every call, every time, no matter what. You may not know who that potential client is or who they may know but believe me people will definitely let it be known if you don't return calls promptly.
I had an agent once who told me "the cell phone is not my friend". That agent was very negligent in returning calls and it hurt her business.
I'm all for qualifying leads but it doesn't take that long to determine if you have a lead or a client. There is a huge diffence between the two.
I will agree that the agents who can stick through this crisis, I mean "correction" or "disruption" that they will rise to the top.
There is a lot to ba said against the large brokerages but there are good agents in small offices, and horrible agents in the big offices.
We are merely a reflection of our society but customer service when provided without fail and for the benefit of the client will keep you afloat in the most turbulent of times.
Keep plugging away! You have already described your niche in a group of fellow newly-engaged couples. Work it! But the relationship you forge will be the key element, not just the contact itself.
I help coach my son's football team and it is the relationships developed through shared experiences (same community, kids the same age)that you will command the most business contacts from. I don't coach because I am trying to get leads but everyone knows what I do and that when and if they need real estate services that I am the one recommended.
Its not magic. Hard work, ethical business dealings, and putting the client's needs at the forefront will pretty much ensure success.