Gary Keller, author of the new book "Shift" and founder of Keller Williams Realty, is no stranger to market downturns. He started his real estate career in the 1980s recession and started his franchising operation during the recession in the 1990s. In his recent seminar at NAR, Keller recommended 12 different ways to put your business on the road to recovery.
1. You can run towards or you can run away from the market
Agents who are succeeding in today’s market are embracing short sales, foreclosures and REOs rather than running from them. If you limit your business to only doing what has worked in the past, you will soon be out of business.
2. Do what you don’t want to do
The difference between those who are average and those who have stellar success is simple. Average people do what they want to do. Massive success comes to the few who are willing to do what they don’t want to do.
3. The law of equilibrium
Keller endowed Baylor University with $5 million to do research on various aspects of the real estate industry. Baylor’s research shows that the amount of commission per agent remains the same regardless of what the market does. In other words, a heated market might have 5,000 agents. In a downturn, the number of agents might drop to 1,800. The average commission per agent, however, remains the same.
4. Profit is determined by expenses, not revenue
Most real estate professionals focus exclusively on the amount of income generated. The quickest route to profitability, however, is to slash expenses.
5. Every dollar spent must generate a return
For each dollar you spend in your business, it must return $1 plus a reasonable return. For example, if you’re spending $5,000 in print marketing, ideally it would yield at least $20,000-$30,000 in closed business.
6. The fastest way to deal with this market is to get educated
Training and education is the first place many people cut in a downturn. The secret to success in this market is to focus constantly on learning. This gives you a huge competitive edge against those who cut back on training and education.
7. The #1 ability of top-performing agents is lead generation
There are plenty of agents who are good at paperwork, showing properties, going on presentations, negotiating deals, and handling transactions problems. None of these skills matter, however, until someone generates a lead. Bottom line — lead generation must be your primary focus every single day. While you can delegate other activities, never delegate your lead-generation activities.
8. Talent is overrated
Some people seem to be born to be in sales. While it’s true that certain behavioral profiles are more suited for sales, the difference between success and failure is deliberate practice. Your knowledge of scripts and dialogues, market conditions, plus strong lead generation, lead conversion and negotiation skills, will make or break your business.
9. Prospecting works better than marketing
Most agents rely on passive marketing. The consumer sees your marketing piece and may decide to contact you. Prospecting, in contrast, means that you actively seek buyers and sellers. The best venue is still face-to-face, including calling on owners of expired listings, for-sale-by-owners, or keeping in regular contact with your referral database.
10. If you argue for your limitations, you get to keep them
Everyone has plenty of excuses about why they can’t succeed in today’s market. You can keep your excuses and struggle, or you can choose to take steps to overcome them. The strategy that works the best is time blocking. Block out your vacation and family time first, followed by two to three hours of lead-generation activities every day. There’s no magic bullet — lead generation must be your number one priority.
11. Most agents lack a capture strategy
Use an offer of service to motivate people to contact you. For example, if prices have decreased in your area, offer to supply them with the comparable sales data that will allow them to apply for a property tax reduction.
12. Create an aggressive short-sale strategy
If you are representing sellers who are facing a short sale, begin by listing their property at market value. Then have them agree to lower the price 10 percent per month until you receive an offer. Take this offer to the bank and include the history of the price reductions. While you may not get the original short-sale offer approved, you now have a saleable short-sale listing with a bank-approved price.
If you want to put your business back on the road to recovery, the steps above provide a clear road map on how to get there.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of "Waging War on Real Estate’s Discounters" and "Who’s the Best Person to Sell My House?" Both are available online. She can be reached at email@example.com or visit her blog at LuxuryClues.com.
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