Editor’s note: Experts have predicted that the torrid pace of home sales and double-digit price growth would slow this year, and some segments are already experiencing this. In this three-part report we take the housing market’s latest pulse to get a feel for what’s happening across the country and what real estate executives advise brokers and agents can do to stay on top. (See Part 1 and Part 2.)
In what some have described as “the year of the buyer,” as the real estate market continues to slow, real estate brokerages and agents are changing tactics to meet the challenge.
“I adjusted my marketing plan. I look my sellers in the eye and say, ‘Guess what. The “real” is back in real estate,'” said Vince Malta, president of the California Association of Realtors.
Getting tough with sellers and insisting on realistic, lower prices is only one part of the puzzle, according to Gib Souza, president of the Bay East Association of Realtors in the San Francisco Bay Area.
“For someone to survive in this marketplace they need to go back to the basics,” said Souza. “Stay in touch with your clients via your database, tell people what you do for a living so they understand the value of the services we provide.”
The “back to basics” theme was echoed by Harley E. Rouda Jr., CEO and managing partner of national franchisor Real Living Inc., one of the largest U.S. residential real estate firms.
“There has been a distinct shift from a seller’s market to at best a balanced market alternatively weighted to a buyer’s market,” Rouda said. “Because of that we are encouraging our agents to go back to the basics in several areas: prospecting, presentations, marketing the listing and negotiating.”
In the prospecting area, Rouda said, “we have a robust Internet technology platform” that automates the process.
“If they’ve (agents) picked up prospects from open houses, calls on signs, calls on ads, they can identify those prospects as cold leads or hot leads or ultimately a client and input that data.”
Then, the system will contact the potential clients with the appropriate type of message and frequency. For example, an e-mail every three months to a cold lead with a few listings, as opposed to contacting the prospect more often, Rouda said.
“The second thing is presentations. In a seller’s market, often agents go in knowing they’re going to get the listing. But in a highly competitive market, it’s imperative the agent go in with the best foot forward,” Rouda said. To that end, he said, the company’s technology includes a point-and-click technology through which agents can create presentations customized to individual properties.
As for marketing and servicing listings, Rouda said all firms and agents do a good job in this area, but it’s key to make sure the client knows this.
“We have created an automated system to communicate marketing efforts directly to the sellers,” Rouda said. E-mail messages direct sellers to customized MyRealLiving sites created for the seller, where they can see where the property has been advertised, see what the feedback is, what properties are in competition with theirs, price reductions, expirations, and what has sold.
In some highly competitive markets, in the past few years, such tracking technology would have been unnecessary, because houses listed and sold in just days, sometimes hours, Rouda said.
“But now, when properties stay on the market longer, it’s helpful,” the CEO said.
The last step, Rouda said, is making sure agents have the education in negotiation and skill development to allow them to succeed in a changing market. His company has partnered with Keith Ferrazzi, CEO of Ferrazzi Greenlight, a sales and marketing consulting firm, to educate its agents in this area.
Real Living isn’t the only brokerage educating its agents about the changing market.
“We recognized last fall that the market was more balanced, so we developed some in-branch training particularly for new agents to help bring them up to speed on what new market conditions are like,” said Sherry Chris, chief operating officer of Prudential California, Nevada and Texas Realty.
“One of the things we taught them was to keep in mind that listings are going to last on the market longer,” Chris said. “In a brisk market where listings were lasting only a matter of hours, they now could be 13, 16, 90 days, and they have to be marketed differently.”
Marketing a listing over an extended amount of time involves networking with different agents, putting many photos of the listing on the MLS and on the agent’s company Web site and managing the open house process “so you are rotating your listings,” the COO said.
Managing the advertising process is also critical, Chris said. Touching on the shift from print media to online media, the COO said, “There are reasons for doing that. One is the longer shelf life of the actual ad. Online, it’s on there until it sells.”
The online advertising challenge, Chris said, is driving traffic to the actual listing.
“We’re exploring with a number of companies, HomeGain being one of them, on lead generation and how we drive traffic to our site and our listings,” Chris said.
Like Chris, Souza of the Bay East Association of Realtors is beefing up advertising spend. He will devote 40 percent to 50 percent of ad spend to the Internet, he said. In addition to Realtor.com, Souza plans to invest money in search engine optimization for his Web site to make sure it shows up high on the list of search results.
But Souza doesn’t depend on the Internet alone. He sends out a monthly newsletter, both via e-mail and in hardcopy. Indeed, Michael J., a Richmond, Calif., Realtor who goes by his last initial, said his monthly hardcopy newsletter, which has been in existence for 20 years, nets the lion’s share of his business, if not all of it.
With all the talk about technology, Chris said, “When consumers are asked what is the most important part of the real estate transaction, they always say it’s the relationship between the agent and the client. We train the agents to stay in touch via telephone as well. It’s not just technology. There’s got to be that balance.”
Send tips or a Letter to the Editor to email@example.com or call (510) 658-9252, ext. 140.