COVID-19 has pushed us all into the next recession a bit earlier than expected. And now it’s time to make some recession-proofing changes to real estate business for many agents. Many agents are wondering if this recession will be like the last. And just how much changes will apply to this recession.
I get truly excited about well-organized non-fiction, so I appreciate that realtors business model is logically structured. The bulk is divided into 12 tactics for surviving a down market:
1. Get Real, Get Right – Mindset and Action
This is a quick intro about mentally preparing to make the necessary changes to your business. Nothing revolutionary, but a solid way to ease into the rest of the tactics.
2. Re-Margin Your Business – Expense Management
The main changestake on expense management during a slow market is to reduce your expenses as much as possible to protect your profit margins. And any dollars you do put to work should be tracked to make sure the expenditure is worth it. Good start, but I wish this section had been a bit more detailed.
For example, not everyone knows how to calculate and track the ROI of business expenses. That would be helpful. A discussion about the benefits of increasing marketing expenses would also have been useful. After all, when other agents panic and pull back their marketing budget, increasing your budget by just a bit can earn you a disproportionate market share in the advertising space since you have less competition.
3. Do More with Less – Leverage
Also, Realtors need to take note on leverage and is largely about leveraging your personnel. If you don’t have a team of buyer’s agents, admin, and transaction coordinators, there isn’t much here that will apply to you. But there are some important notes about leveraging loan officers, title reps, and escrow officers that apply to everyone.
4. Find the Motivated – Lead Generation
This is where realtors starts providing real value via detailed advice. There are lists of ways to prospect and market, tips about scheduling your lead-generation time, and strategies for making your message resonate with prospective buyers and sellers. My only issue with this chapter is that it isn’t recession-specific. New agents will be able to take a lot away from this chapter, but veteran agents should be well aware of these general lead-generation strategies.
5. Get to the Table – Lead Conversion
The 3 C’s of Lead Conversion: Capture, Connect, and Close. Realtors also need to take a deep dive on how to connect with prospects and how to close them, even getting into 10 classic closes you can choose from. Again, this is helpful information for new salespeople, but nothing new for experienced agents.
6. Catch People in Your Web – Internet Lead Conversion
Realtors must learn on Internet lead conversions holds up surprisingly well, given the tech advancements of the last decade. Good for realtors who are recognizing the importance of real estate agent websites way back then! Your broker’s site only promotes your brokerage; for effective Internet lead conversion, you need your own website. Luckily, getting a website of your own is now easier and more cost-effective than ever. With so many website-building tools available, even non-techies can build their own professional websites for a fraction of the cost of hiring a web designer.
Changes are also made into online consumer behavior, website elements, and lead funnels, all of which are still relevant today. The tools used to operate these functions of your website may have changed, but the functions themselves remain the same.
Of course it’s lacking modern specifics like social media marketing, blogging for organic Google traffic, and monetizing your website, but that’s to be expected.
7. Price Ahead of the Market – Seller Pricing Strategies
Seller pricing strategies are largely common sense, but it’s difficult to help your sellers see the logic when they’re so fueled by emotion. Realtors will need to learn specific tactics for working with the sellers to establish a listing price. And it’s full of figures and diagrams that make the complex financial models easy to understand at-a-glance.
8. Stand Out from the Competition – Seller Staging Strategies
Even new agents should know all of the information presented to learn about photos which are indication of staging quality, perhaps some agents should pay close attention to this chapter.
9. Create Urgency – Overcoming Buyer Reluctance
Realtors need to learn on creative financing because too few agents address financing head-on. Most simply refer clients to their lender and leave it at that. But savvy agents know that it’s their responsibility to understand real estate financing and be able to come up with creative financing solutions to get deals closed. Of course realtors always going to rely on the lender to advise your clients on financing. But realtors need to be able to answer financing questions and find opportunities for your clients to get deals done in a slow economy.
There is a lot of solid, practical advice about working through inspection, appraisal, and contingency issues. But unless you’re brand new to real estate, everything in this chapter should be business-as-usual to you. Having said that, the 2020 recession will likely be different from the 2008 recession. You’ll recall that recession started in the mortgage market, meaning real estate was essentially ground zero. This recession, on the other hand, started with a pandemic that closed small businesses and put millions of people out of work. So real estate will be slower to be impacted. And we likely won’t see as many foreclosures this time around since few people have over-leveraged their real estate holdings. Now, there will still be many more short sales and foreclosures than we’ve seen in the strong economy, just not as many as during the Great Recession. A recession is the perfect time to add a recession-friendly service to your real estate business (think credit repair, property management, or property tax appeals). Not only will this diversify …