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The economy is like the weather: It constantly changes; It often proves unpredictable; and, We'll always be under its spell. When the market shifts by slowing down, it causes concern for agents and the public alike. At least from the agent's perspective, the concern may be unnecessary. This article explores some important strategies that a real estate agent can employ to manage market shifts and come out as a winner.
When it comes to managing market downturns and economic shifts, a real estate agent must be fully informed about what is transpiring. Tracking the latest trends and developments allows the agent to better understand market drivers and make beneficial business decisions.
Excellent (and reliable) sources of information for agents include; Trade publications of the Local, State, and National Association of REALTORS®; MLS publications and reports; real estate-related news services; and general news articles that provide objective and properly-sourced information. Trends can also be tracked using sources such as NAR's housing reports and those of the Federal Housing Finance Agency (FHFA).
A real estate agent who is current on market trends is in the best position to give his or her clients accurate information. As discussed in other articles on this Blog, serving as an advisor to homebuyers and sellers is one of the top three services that a real estate professional provides (along with client advocacy and negotiation).
Further, existing agents can stay abreast of market conditions by attending NCI’s industry-leading Continuing Education classes. All NCI Continuing Education classes are professionally researched and custom-written to give agents current, Michigan-specific information. Several thousand Michigan real estate professionals rely on NCI to keep them abreast of real estate industry developments.
As stated, market downturns can be unsettling. This is especially true when the market corrects after a sustained, strong seller’s market. In a strong seller’s market, multiple buyers compete for the attention of a limited number of properties. The low listing inventory results from the fact that properties sell so quickly.
Even though it is not factually correct, you often hear agents say that in a strong seller’s market, properties sell themselves. Agents who are not regular prospectors of business leads often do better in a strong seller’s market. Things change for these agents, however, when the market slows down. Consistently successful agents, on the other hand, are less likely to be affected by market shifts. So, what is their secret?
Successful agents understand that their commission income results, not from the market, but from their prospecting and lead-generation efforts. They know that prospecting is the fuel that ignites the engine of profitability. The most dollar-productive activity there is in the real estate profession is prospecting and lead generation. This is discussed in more detail in this article on the NCI Blog.
When the real estate business slows down, the proactive agent ramps up their prospecting efforts. Prospecting, simply stated, is the remedy to nearly every income-related issue that agents face. I have never encountered an agent for whom prospecting has failed to produce results. I have, however, encountered agents who have failed to prospect.
For those who need to refresh their prospecting skills in a slower market, here are some suggestions: (1) Dust off your post-license/sales training manual or acquire an updated one; (2) Start practicing your scripts and dialogs from the manual or download them from the web; (3) Read the above-referenced articles from the NCI Blog about the subject; and most importantly, (4) Set a schedule for daily prospecting including making calls to your contact database and door knocking in your geographic farm.
It is important to draw a distinction between prospecting and marketing. It is easy to confuse the two terms since many agents use them interchangeably. Technically, in real estate, prospecting is a direct activity in which the agent reaches out to prospective buyers and sellers. Marketing, on the other hand, is a passive activity in which the agent maintains a market presence.
With marketing efforts such as neighborhood mailers, social media postings, and other similar forms of advertising, the advertising agent hopes the consumer will call him or her. With prospecting, the agent proactively reaches out to the consumer. Looking at it from this perspective, it is easy to see which activity is more likely to produce better and more controllable results. Do not, however, look at prospecting and marketing as a binary decision, i.e., as an either/or proposition, because both are important.
Your marketing efforts should be viewed from multiple perspectives including print and electronic media. Maintaining a social media presence is decidedly more cost-effective than engaging in direct mailing campaigns. Therefore, it makes sense to focus on that first. Consider adding a video that can help you stand out online. Recording videos lets you showcase your personality, expertise, and listings more dynamically. Potential clients can see and hear you in action, boosting trust and credibility.
YouTube, Vimeo, and Instagram's IGTV are video platforms and tools that you can utilize in conjunction with your social media marketing. Create video tours of properties, share tips, or host Q&A sessions to connect with your audience. With regard to video tours of properties and other advertising, make sure you adhere to your company policies and required client practices.
Additionally, with social media, consider maintaining completely separate personal and business accounts. And, once you establish a separate business presence on social media, go back and review your personal accounts to make sure they do not contain any controversial or objectionable content. Remember, your personal social media accounts may be accessible to the public. Potential buyers and sellers often research agents before they decide to work with them.
Maintaining and improving relationships with existing clients is another important strategy to use when the market shifts. Past clients can provide referrals and repeat business, so make sure you stay in touch with them. Repeat and referral business is the mainstay of all successful real estate agents. Do not simply contact past customers and clients to ask them for new business. Instead, remind them of your availability to assist their family, friends, co-workers, and acquaintances.
As you keep in touch with past clients (whether via email, phone, or in-person meetings), be ready to provide them with updated information about the market in which their property is located. Give them something they find valuable. Everybody wants to know what their property is currently worth and what is happening in their neighborhood.
Finally, use client feedback to improve your services. This can build trust and show that you value their opinion and needs. Maintain and improve your relationships with existing clients during downturns and market shifts.
Joining an existing real estate team might be beneficial for real estate agents looking to manage downturns and market shifts. This is especially true for newer agents. By working with a team, you can leverage the skills and resources of other agents to help grow your business and overcome any market challenges. Teams are typically managed by an established top-producing agent. Different agent-members of the team may specialize whether focusing on prospecting efforts, going on listing appointments with prospective sellers, showing properties to buyers, or managing transactions.
There are several benefits to joining or establishing a team, including:
We have explored several strategies Michigan real estate agents can use to manage downturns and market shifts. By staying proactive and adapting to market changes, real estate agents can navigate downturns and market shifts and continue to build their businesses. Many agents actually discover that market shifts are a blessing in disguise. By employing these critical strategies, medium-producing agents can rise to become a top-producing agent.
NCI’s real estate continuing education classes contain valuable insights and relevant information for you to stay ahead of the game. Visit our website to learn more about our online self-paced, live webinar, and in-person real estate CE classes.
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However, fulfilling the promise of a successful real estate future requires the right choices at the right times. The most important decision to make right now? Where you’ll begin — or continue — your real estate training. NCI Associates, Ltd. remains your intelligent choice for Michigan Real Estate Classes.
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