Many of my colleagues are experiencing justified concern. However, some of us have been here before and are proof that you can survive severe market shocks. I started my career in the 1980s when mortgage rates were in the double-digits. As I was discussing the current conditions with my friend Charlotte Lipscomb, she noted that, “If we can feed our family in the ’80s selling real estate, we can do anything.”
She’s right. But you must know how to adapt and survive. Successful agents know that each downturn’s duration has been shorter and, therefore, easier to survive.
Market efficiencies have paved the way. The most obvious one being our client’s access to more massive amounts of reliable information. It’s an unstoppable industry that has taken real estate from an inefficient market to an efficient one. Efficient markets correct faster than inefficient markets.
The observation leads me to this: Every period of disruption accelerates market trends in our industry. Successful Realtors identify the trends, aggressively adapt their business models and get out in front. Here are some industry trends that will likely increase and become even more dominant.
Aggressively educating sellers
- The growing gap between homes that are in move-in condition and homes that need work has never been more pronounced. Homes that need work will not move as fast. We’re going through a stressful time, and nobody wants any extra stress.
- Unfortunately, motivated sellers will be in good company. Sellers needing to address difficult financial situations want empathy. The last thing they could control was a global pandemic. They’re not failures or extraordinary risk-takers. They are a symptom of a historical event no one saw coming. Empathize, and connect them with resources that might help.
- Initially, send your sellers only the “sold” comparables. Then a few days later, send the “active” comparables. Agents are not genies. Sellers need to embrace the reality that their home is only worth what a buyer will pay.
- Listing periods will go back to 12 months, so don’t waste your time with unrealistic sellers.
Focusing on buyers
- Shift your marketing dollars to acquiring buyers more than listings. Buyers are money in the bank. Appeal to the buyer’s ego. Potential buyers want to be thought of as insightful. Change your presentation to “Making Money 101.” Let them know they’re smart for buying right now, no matter what the conditions are. Learn to sell good news, and learn how to sell bad news.
- Start turning your attention to the younger generation. Millennials are finally going to start buying rather than renting. They have been self-quarantined in apartments or with their parents. They’re going through a 10-week course on loneliness and boredom in an apartment the size of a box.
- Have an excellent lender in your arsenal that gets things done — someone you would want in your foxhole. When buyers have trouble getting a loan, they begin to second-guess the purchasing decision.
The new ‘normal’ in marketing
- Agents will soon become their own marketing departments. If you work for a mega-firm, say goodbye to the person who used to help you create attractive Instagram posts or buy targeted Facebook ads. If you work for a small firm or yourself, you need to acquire those skills and get highly trained on social media quickly.
- Get used to helping people without any expectation of a return for your time and effort. People want empathy and the feeling that they can count on you. Position yourself as the neighborhood expert. Someone in your neighborhood is the information hub — be that person.
- People want leadership, and nobody wants to do business with a naysayer. This is a people-focused business with a low barrier to entry. You are going to have to improve your game every single day if you want to be successful.
- The future mandates that you are available 24/7. Get your home office to look like a studio on a business channel. Invest in technology that sets your communications apart from everyone else in your client’s life.
The knowledge gap for real estate used to be enormous, and the inefficient market provided opportunities to risk-takers. The market becomes more efficient every year, thanks to technologies that increase transparency. Websites such as Zillow and Redfin freely educate anyone on home values or on buying a home.
For this reason, real estate prices rebound quicker with every downturn. Let me repeat this — because of the increase in transparency, real estate prices rebound quicker with every downturn.
Deals will be harder to do than ever, which will lead to more stressful periods in your life. Make sure to earmark something special for yourself with each deal — a new purse, a spa day, weekend trip, etc. You deserve it.
And do away with office rankings. Surviving is going to be a significant win for most. This is not the year to measure your growth and brag about it.
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