Perhaps you’re new to the real estate business, or maybe you’re battling a bout of the two-year blues, and here comes the coronavirus. What does it mean for your business? What can you do to mitigate the consequences?
Phase one: Survival
You’re probably not immune from the virus and neither are your loved ones. If you’re continuing to perform real estate activities in the presence of others, you should take all necessary precautions. If you’re at higher risk for severe illness or under a stay-at-home order, you may have little choice.
Downtime is at a premium in the real estate business. Most of us are used to working almost every day. But there’s also a tendency to fall into old routines and habits over time — ones that no longer serve us well. Now is the time to reevaluate your plan or come up with a new one.
Phase two: Improve operations
The virus will pass, but the challenges to the real estate industry will remain for years to come. If you accept that and redirect your business activities accordingly, you will do well as the market shifts.
The real estate industry has reached a stage where most practitioners have already adopted all of the tools necessary to function almost entirely in virtual reality. The technology we have been implementing in residential real estate is ready for prime time just when it’s needed most.
Yesterday we “FaceTimed” two out-of-state buyers of new construction so they could see the progress made on their homes. It was fun for all of us. DocuSign solves the problem of electronic document delivery and execution.
Phase three: Relaunch
It has been said that “old real estate brokers never die, they just grow listless.” For most of the past decade, the biggest impediment to residential real estate profitability has been the lack of inventory. That’s about to change. Once the virus has abated, we will have a better idea of its effect on the economy. It will not be as simple as everyone just going back to work.
The stock market declines we’ve witnessed are not due to the virus, but failed monetary policy. If the fed stops intervening, the market will self-correct, but substantially south of where it is today.
The easy money that flowed into commercial real estate development to build retail space that will never be occupied is endemic to the perils of entire financial industries. Big retailers were on the ropes, and mom and pop shops were getting by month to month. Many will never return, and neither will those jobs.
Over the last few years, the restaurant industry was the bright spot in job creation. Many of those restaurants will not reopen, and those jobs will need to be replaced.
Many financial investments are highly leveraged and over-subscribed. There could be a great financial reset. Down the road, I expect that many manufacturing jobs will return to the U.S. now that we have watched the global “just-in-time” supply change seize up.
Most families have very little money reserved for emergencies and were getting by paycheck to paycheck before the crisis.
Focus on listings
We’re about to witness the exponential growth of residential real estate listings at a time when the pool of potential buyers will be shrinking. This might suggest that your efforts should be spent finding capable buyers.
I strongly disagree. Now is the time to take your business to the next level by building a listing portfolio. In good times or bad times, listings always sell if they’re priced to the market. Initially, many of the listings will come to market over-priced, and this is your window of opportunity.
I started real estate in 1978 and quickly realized that the key difference between the few who earn a good living and those who never get traction is a focus on listings. The more listings you have, the more money you will make.
Listings are your security in an insecure world. Build and maintain an inventory of five to 10 listings and you will never worry about money again. Listings create marketing opportunities. Listings attract other listings. Listings sell whether you are working or on lockdown.
While we’re in this period of change from a seller’s market to a buyer’s market, you need to be reaching out to homeowners. Provide valuable information about what to do when they can’t make their payment and what their options are.
Research tells us that there can be a considerable length of time between when they seek this information and when they act upon it, but according to NAR, 75 percent of sellers list with the first agent they meet. Call everyone you know, and ask how they are doing. This will open the door for future referrals as well as listings.
Ask the phrase that pays: “Who do you know who might be thinking about selling their house?” The more often you ask this question, the more listing referrals you will receive.
In times like these, it’s important to remember that we are in the people business. Many people are uncertain and apprehensive. They will always remember that you called to see how they were doing and reassured them that you were available for any questions they might have about available options or programs to assist them.
We’re on the precipice of extraordinary change. Change is inevitable; cooperation is optional. It isn’t about what happens, it’s about how we respond to it. A good response would be outreach and a shift in business focus. This is a crisis — or is it an opportunity riding a dangerous wind?
George W. Mantor is an author, writer, speaker, real estate professional and founder of the Associates Financial Group. Connect with him on LinkedIn.