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Crises can arise seemingly quickly in real estate. Economic downturns, regulatory changes, natural disasters, wars, social unrest — these unforeseen events have the potential to disrupt markets, affect your day-to-day operations and challenge the stability of your real estate business.
The current market panic is over commission after the National Association of Realtors’ announced its proposed settlement to most of its commission cases, which involves decoupling commissions, removing commissions from the multiple listing service (MLS) and requiring buyer-broker agreements in advance of showing homes to buyers, thus changing the way real estate has transacted for decades.
Effective crisis management can make the critical difference between survival and downfall in turbulent times. Here are six key strategies for crisis management.
1. Remain calm and focus on the facts
When navigating turbulent real estate times, it’s imperative to remain calm and focus on the facts to effectively manage the situation. Avoid panicking or making impulsive decisions based on fear.
Instead, gather all relevant information, and focus on understanding the root causes of the crisis.
Knowledge is power, and understanding the broader context and identifying the facts of the situation can help mitigate panic. By staying composed and basing decisions on factual information, you can better navigate the challenges and work toward finding viable solutions.
2. Establish open and transparent communication channels
Open communication channels with all parties involved, including clients, employees and stakeholders, during times of crisis.
Keeping them informed about the situation, any potential impacts on real estate transactions, and the steps being taken to address challenges ensures transparency and collaboration. Transparency fosters trust and helps mitigate rumors or misinformation that can exacerbate the issue.
3. Lean on your trusted network
Leaning on your trusted network can be invaluable for support and guidance. Your network, comprised of colleagues, mentors and industry peers, offers a wealth of experience and diverse perspectives to draw upon.
By reaching out to individuals within your network, you can gain insights into market trends, navigate challenging situations, and explore innovative strategies to adapt to changing conditions.
Furthermore, your trusted network can provide emotional support and encouragement that fosters a sense of camaraderie and solidarity within the real estate community, ultimately strengthening your ability to overcome challenges and thrive in the face of adversity.
4. Have proactive risk management procedures
Develop a robust risk management strategy to identify and mitigate potential risks to the brokerage’s operations and financial stability.
This may involve conducting regular risk assessments, implementing contingency plans for various scenarios, securing adequate insurance coverage to protect against liabilities and establishing business continuity plans that ensure that essential functions can continue during any crisis.
By maintaining operational resilience, real estate brokerages can minimize disruptions and maintain client trust.
5. Establish written policies and procedures
It is crucial for real estate brokerages to have and implement written policies and procedures to ensure consistency and compliance within their operations.
Clear policies provide guidance to agents and staff, reducing misunderstandings and minimizing the risk of errors or misconduct.
Additionally, documented procedures help maintain professionalism, enhance accountability and establish a framework for effective problem-solving when faced with complex situations.
6. Create and implement flexible business models
Real estate professionals must remain agile and adaptable in response to evolving crises. Flexibility in decision-making and the ability to pivot strategies based on changing market dynamics are critical for navigating turbulent times.
Implementing flexible business models that allow for adaptation to changing market conditions could include adjusting commission structures or exploring alternative revenue streams, such as referral partnerships or affiliate programs.
Embracing adaptability, remaining patient, and reframing challenges as opportunities for growth can ultimately help individuals navigate through volatile real estate markets with confidence and resilience.
7. Invest in technology and training
Leverage technology to streamline processes, enhance client engagement, and improve operational efficiency. Invest in training programs to upskill employees and ensure they are equipped to effectively navigate challenging market conditions. Staying ahead of industry trends can position the brokerage for long-term success despite short-term crises.
In the unpredictable landscape of real estate, crises are inevitable. However, by adopting proactive measures and implementing robust crisis management strategies, industry stakeholders can mitigate risks, safeguard assets and preserve long-term value.
Preparedness, resilience and adaptability are key principles that underpin effective crisis management in real estate, ensuring that organizations can weather the storm and emerge stronger in the face of adversity.
As the head of inclusion and belonging for Keller Williams Realty International, Julia Lashay Israel advises, trains and coaches leaders, team members and agents to recognize and address diversity, equity and inclusion opportunities and challenges across the organization.
