Often, an economic recession is something we can prepare for and recover from. It’s something foreseeable and, to some degree, manageable. Right now, however, very abrupt and widespread economic disruption is taking hold and presenting unprecedented challenges.
The US economy is driven by consumer spending, which makes up 70 percent of its movement. As everything closes — from Disney World to sporting events to conferences to bars — the economy is quickly grinding to a halt.
As this creates uncertainty, homeowners, homebuyers and those who were thinking of making a move in 2020 begin to fear for their jobs, their health and their future. We’re already beginning to see the ripple effects and — with no clear sense of how long the slowdown will last or how much worse it will get — it’s hard to see the end game.
Things are changing quickly, hour-by-hour in some cases. What’s true for a broker in NYC may not be true for a broker in Oklahoma. Currently, the recession isn’t housing-based, but if unemployment numbers soar as predicted, it will certainly impact housing.
Maybe your market or your client base hasn’t been impacted yet. That can change in a matter of days or weeks. In the meantime, what should you be doing to ensure you’re ready for whatever’s next, whether you’re an individual agent or a broker-owner?
COVID-19 and brokerage disruption
One of the first ways that brokers began to respond to the virus was practical. No more open houses. No more driving buyers to showings. A moratorium on handshaking and hugging.
The type of social isolation required by the current crisis is especially difficult for an extrovert-heavy, network-driven industry like real estate, where warmth and face time is an important part of doing business.
In addition, with limitations on travel and cancellations of some of the industry’s biggest events, many agents may be left with a sense that “business as usual” no longer applies — and may be permanently altered.
The National Association of Realtors has been continually updating its guide with CDC’s changing recommendations, in an effort to provide a central location for best practices. Meanwhile, brokers are working with their agents and staff to implement appropriate strategies.
Depending on the market, this may mean closing the office and mandating work-from-home policies on the brokerage side or in compliance with local or state regulations.
What agents should be doing right now
Around the country, agents and brokers are looking for ways to be proactive. Troy Palmquist, broker and founder of The Address Real Estate in Southern California, said to keep the focus on “the part of the market that will be moving. Investors are going to be active. IBuyers are going to be active. Look for ways to serve those markets and to continue to get deals done for your sellers.”
Agent Katie Connelly of The Address’s Agoura Hills office sees this as an optimal time to work on designations and certifications. “Check out online resources from NAR, and use this time to build your expertise so that you’ll be even more prepared to offer top-of-the-line service when the market rebounds,” she said.
Omaha’s Amber Tkaczuk of Nebraska Realty said this is a time to evaluate and create systems and processes that will continue to work in the long term. “I know that most of my business comes from leads from my sphere of influence,” she noted. “I already have a plan in place of what I will be doing month-to-month to stay in front of my SOI.”
In addition, Tkaczuk said agents need to focus on a service-oriented response to current conditions. “Now is the time to be professional, helpful and positive,” she noted. “People will remember who helped them, said a kind word, reached out.”
South Florida’s Angela Territo, coach and broker with Engel & Völkers Delray Beach, said she is “suggesting more phone calls to past clients and sphere of influence to be their trusted advisor.”
Beyond talking real estate, Territo said this is a great time to “ask about family and neighbors, suggested medications, food in stock. Tell stories and review family photos, cook together, learn home making skills, exercise outside, watch museum tours online.”
Territo said that one of the most important things she suggests to coaching clients is stress reduction and management as closings, open houses and buyer transactions may be delayed.
What teams should be doing right now
For teams, communication is a top priority. You need to ensure that everyone is following and implementing best practices for staying safe, pivoting marketing and managing existing transactions.
This should include common messaging for the entire team to send to the sphere as well as implementing common policies and processes. Speaking with one voice is essential.
Move face time online by optimizing video and social media platforms. This is a great opportunity to expand existing content with high-interest, value-filled information.
Tune into what’s going on in your community, what’s needed and what volunteer opportunities are available online. Then, rally around a worthwhile service or organization.
Most of all, have each other’s backs. Assist your colleagues to continue providing optimal service to your clients. One of the value propositions teams frequently cite is their ability to offer a higher level of service than an individual agent or broker can provide.
This is the time to follow through on that commitment by ensuring that everyone on your team is getting the support needed to do the best possible job for clients.
What brokers and owners should be doing right now
Don’t think of the current situation solely in terms of its negative impact. According to Marion Weiler, founder of Weiler International and a fractional CMO for brokerage companies, this is the time to revisit systems, processes and, most importantly, your leadership style.
“First of all, brokers and executive teams have to authentically care about agents, employees and clients,” Weiler said. “Everybody is human and has certain fears. This is a moment to show your leadership and bring hope, make people feel understood and appreciated, and lead by example.”
Weiler said that agents are already used to working remotely and are already set up to do so. Support personnel may not have had that opportunity and may need more help navigating their roles. “There is always room for improvement in remote-working policies,” she said.
Weiler also sees the upcoming downturn as an opportunity to optimize organizational structure and operational effectiveness. She suggested asking the following:
- How does your structure align with your needs and set you up to reach your goals?
- Where are you spending money, and where are redundancies? Who are you paying and why?
- What contracts and initiatives were started by someone who is no longer with the company? How can these be renegotiated or eliminated if appropriate?
- What are the critical components to your success and the success of the company?
Weiler also suggested reevaluating who you’re spending the most time with. “Often, top agents get the most time and attention but the company is making less money on them,” she said. “Are you missing an opportunity to connect with an agent that has a huge potential to be the next up-and-coming?”
She added: “Don’t ignore your top producers, but don’t dance around them all day long and let other agents feel neglected.” Proper leadership during a time of crisis can result in improved agent retention and recruitment when the crisis is over.
Lastly, Weiler said: “What do you have in place for agents so that they can do more effective, targeted marketing and lead generation?” This is a great time for people to work on their platforms and get ahead on their content.
Hopeful signs for recovery
According to Windermere Real Estate’s chief economist Matthew Gardner’s Monday update, while the numbers we can expect in both unemployment and contraction of economic activity are unprecedented, past Q2 of 2020 economists expect a rapid recovery with increasingly positive news as we approach year’s end.
(Another hopeful sign: the Senate’s coronavirus stimulus bill, which might provide much-needed relief to real estate agents. You can read more about what the bill encompasses and how it works here.)
One of the hardest hit areas of the country has been Westchester County NY, home of New Rochelle and the country’s first containment zone.
According to Gail Fattizzi, NY broker and regional manager for ERA Insite Realty Services and the 2020 President of the Hudson Gateway Association of Realtors (HGAR), even here there are still positive signs for a quick recovery — and for a robust real estate market in the midst of an economic downturn.
“There is no question there will be an economic strain,” Fattizzi said. “Volatility in the stock market is dampening confidence, and some people are seeing their down payment money disappearing out of their account. On the other hand, some people feel that it is time to take their money out of the market and put it into a house, as they see it as a more secure option that will ensure a roof over their heads.”
Richard Haggerty, HGAR’s CEO, agreed. “Quite frankly I think the current environment is too fluid to predict whether there will be a recession or not,” he said. “We know the US economy was on strong footing prior to the onslaught of the COVID-19 virus, and we know that interest rates continue to be at all time lows.”
“I believe that once we find that solid footing, we’ll see a recovery, but the period of uncertainty will continue for a while,” he added. “I think Realtors, as well as the general public, need to keep fully informed via reputable sources like the CDC, follow suggested guidelines as they are updated, and don’t panic.”
Christy Murdock Edgar is a realtor, freelance writer, coach and consultant with Writing Real Estate. She is also a Florida Realtors faculty member. Follow Writing Real Estate on Facebook, Twitter, Instagr