Make no mistake: The days of easy money for real estate salespeople are over at least for now. But that doesn’t mean real estate sales is a bad business; rather, it means Realtors must have a new strategy for success.
The National Association of Realtors has forecast sales of more than 6.4 million resale and 975,000 new-built homes in the United States next year. That’s fewer sales than were recorded this year and in prior recent years. And the pain looks to be more severe in new homes than the resale market. But the forecast overall shouldn’t be characterized as a weak or troubled housing market. In fact, a year with more than 6 million homes sold is quite strong, historically speaking. If the forecast is reasonably close to the actual mark, hundreds of thousands of Realtors and other professionals in related real estate businesses will be quite successful in 2007 and beyond.
What’s ironic about the real estate business today is that while technology has brought new techniques, the fundamental skills and essential goals should be exactly the same as they were in those long-ago years before the easy-money boom. Market knowledge, education, professionalism, customer service and financial management aren’t new ideas; rather, they’re old standbys that are now rightly back in vogue after a long absence. They are, perhaps, old friends that need not be forgotten.
Realtors who want to thrive in such a market need to be up-to-date on current local market conditions, circumstances and opportunities. Which neighborhoods are hot and which aren’t? Which types of homes are good buys and which are overpriced, out of style or not likely to hold their resale value? Is the market now open to first-timers who were shut out in the go-go days? Have new-home builders put out the welcome mat for brokers and offered attractive concessions for buyers? Are sellers who’ve experienced financial hardship in need of short-sale expertise? These and countless other locale-specific opportunities may exist in different individual markets throughout the country. Savvy Realtors adapt their businesses to these local markets and position themselves to exploit whatever opportunities exist today, not last year.
Along with market knowledge, Realtors need to understand the actual current needs of home buyers and sellers and realize that those needs have changed along with the market. The ability to win a multiple-offers war is not as valuable a skill or as important a service today as are the know-how to market for-sale homes, match previewed properties to buyers’ preferences and negotiate win-win deals. It’s also important to understand that different market segments have different needs: A young woman who wants to buy her first condominium doesn’t need the same services from a Realtor as empty nesters who are ready to sell a family-sized home that no longer meets their needs.
Realtors should be true experts in the real estate business and true professionals in the services they offer. The ability to show up is good, but not enough to be successful. Realtors need to be well-informed and well-educated about real estate. Take a college-level real estate course. Read some books about personal finance, investment and wealth creation. Attend an industry event or conference. Earn a professional real estate designation. Sign up with a brokerage company that supports education and offers training beyond the basics needed to get a license. Knowledge is not only a source of power, but also a service buyers and sellers want.
Professionalism incorporates the idea of good service, though that needn’t mean the Realtor must be on call 24/7 or acquiesce to every demand of every would-be buyer or seller. Rather, good service starts with a knowledge of what services buyers and sellers truly value. Honesty, dependability and ethical treatment of others should be at the top of the list along with market knowledge and professional-quality skills.
Success also takes a plan and a determination to manage one’s business as a business, not a hobby. Don’t take listings that are overpriced. Don’t show homes to buyers who aren’t pre-approved for a mortgage. Utilize the Internet to prospect for new business and market services and for-sale homes. Keep track of marketing costs and spend more on what works to develop new business — not what doesn’t. Cut back on business expenses that don’t directly contribute to closed sales. Be organized and make time management a daily priority.
Marcie Geffner is a real estate reporter in Los Angeles.
Copyright 2006. Marcie Geffner. All rights reserved. No part of this article may be used or reproduced in any manner whatsoever without written permission of the author.