Editor’s note: Some local real estate markets nationwide are seeing signs of change: increased listings inventory, increased days on the market, and more highly motivated sellers than in past years. Experienced real estate professionals say there’s no need to panic as long as you’re prepared. In this three-part series, we sought advice from industry veterans about how to survive and thrive in a changing real estate market. (See Part 1: Survive the storm and make money too and Part 2: Brokerage companies scramble for market share.)
To deal with a softening market, work your existing connections, go after relocation business and be sure to nail the right price for a property from the get-go, say top-producing agents from around the country.
“In the past, if you overpriced your home the market would catch up to it in a month or two,” said William Stanger, one of Prudential California’s top-producing agents in Antioch, Calif. “Nowadays it is more important to have the right price right away. With more inventory out there, the longer a house sits on the market the more stagnant it gets.”
As of the time of the interview, there were 528 houses active in Antioch, Calif., a high number compared to the last two years, Stanger said. “When you have a surplus of homes, that’s why a lot of people think it’s a softening market,” Stanger said.
Stanger, who has 15 years’ experience, started in 1991 during a down market.
“They actually said, ‘If you can make it now, you can make it anytime,'” Stanger said of his early mentors.
One of the lessons he learned was that during a slow housing market, it’s important to enlist the client as a partner in selling the house.
“One of the benefits I offer my client is a system called Listing Watch. I connect my clients with my multiple listing system so the client from their home can see everything that’s on the market in Antioch,” Stanger said. Like many of the agents consulted for this story, Stanger pointed to the Internet as a valuable tool.
Stanger, who works as a team with his wife, his daughters and an assistant, does not plan to shift his advertising dollars. “We will spend the amount we normally do,” he said. Stanger’s most emphasized piece of advice: “Take care of the clients you have. We market mostly our past clients.”
Stanger and his team send out a monthly mailing to past and current clients with recipes and tips of the month. They send flowers “or perhaps a box of See’s Chocolates” to former clients’ homes to keep in contact “because that’s where the leads come from,” the Realtor said.
“It costs less money to retain an old customer. They already know you. Take care of them and they’ll take care of you,” Stanger said. “Staying in touch with these guys in times like this is all the more important. I don’t use lead generation programs to generate cold leads. All my leads are warm leads.”
Like Stanger, Rich Novotny, a top-producing agent in Prudential California’s Pleasanton, Calif., office, doesn’t plan to shift his advertising dollars.
“I use flyers and virtual tours on PruWeb and Realtor.com, and I advertise in the Sunday section of the paper,” Novotny said. He believes strongly in the power of the Web, commenting that his Northern California community is “probably one of the most high-tech areas in the world.”
Houses recently have remained on the market two or three weeks in Novotny’s area, which in the frenzied Northern California market counts as something of a slowdown. “Compared to the rest of the country, that’s not a long time,” he noted.
Patricia Kaisner, a top-producing agent with RE/MAX Twin City Realtors in Bloomington, Ill., and president of the Bloomington/Normal, Illinois Association of Realtors, agrees with Stanger on referral business.
“Referral business will be what keeps you going during the down times,” Kaisner said. “If you’ve taken really good care of your client and they feel like you’ve done a wonderful job and exceeded their expectations, they’re more apt to send people your way.”
Kaisner mentioned corporate transferees as another source of business.
“They usually have a relocation package whereby even if the value of homes has started deteriorating, they still have a buyout figure from their employer that’s very fair in order to help them make the move,” Kaisner pointed out. “The corporation buys their old home and you work with the company to help them sell the old house.”
One of the other things that happen in a slow market, Kaisner said, is that people get creative. “During the early 1980s down market, that was the initiation of adjustable-rate mortgages,” she said.
Kaisner’s market today is not necessarily slowing though, she said.
Like Kaisner, Susan Jenner, a top-producing agent for Chicago’s Baird & Warner, mentioned relocation as a key source of business. She also said business in her area has not slowed.
“I’m not seeing a slowdown in the $400,000-minus price ranges,” Jenner said. “I do think there is a slowing at the end of the year in the more luxury end because a lot of people who are going to move with children are set in place when September rolls around. But there will always be relocation people coming through, no matter what time of year it is.”
Jenner also recommends holding brokers’ lunches. “Every new listing I get, shortly after I get that listing I send invitations via fax or hand mail to the top producers in the area at my competition inviting them to come to my house because they are going to have a good chance of selling the house too.”
She also puts her house on caravan every time she gets a new listing, inviting agents from her company to come through the house to look at the listing.
“Then, if someone from our office takes a floor call, they’ve been through the house and can talk it up. I’m the head cheerleader, and they’re the little cheerleader. You need cheerleaders to get it done,” Jenner said.
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