On April 24, 2019, we hosted our monthly YPN Breakfast. Here, we got actionable advice on how to navigate a changing market. Watch, listen and read below to learn about preparing yourself and your business for the shifting nature of real estate. You can check out photos from the event on the YPN Facebook page!
This month’s presenter was:
Listen to what we learned:
Watch quick tips from our speaker:
Read key takeaways:
Real estate is a roller coaster.
And we should be watching the first car.
“If you think about real estate, it’s very much like a roller coaster. Let’s say there’re ten cars,” Phil said. He went on to draw a parallel with the first car representing contracts, the second car as closings and so on. As the rollercoaster climbs up the top of the hill and then starts to “fall” down the slope of the other side, the cars follow each other. As the number of contracts goes down, the number of closings go down, etc. We can see it in the data.
When asked about what tools he uses to track contracts, closings and other market data, Phil said, “We have this really useful tool called the MLS. And I get asked all the time, what about InfoSparks, what about Faststats, and, yes, those are really great tools for rolling up [too].”
The MLS is as much a tool for real estate brokers as the others, where you can look at closings, contracts and sales within certain time periods, within certain neighborhoods, and however you want. When you’re watching the roller coaster, use the tools in your arsenal: CAR’s annual Market Outlook event, MRED MLS and InfoSparks, REALTORS® Property Resource (RPR) and CAR’s FastStats.
Ask yourself, “What skills am I missing?”
When the real estate market hit a downturn in 2008, Phil began to reflect on what he could do to remain successful. In this time, he realized the best way we can build a steady and reliable business is to look within ourselves and identify the skills or competencies we may be lacking. For him, it was pricing. He doubled down on everything pricing, and now, it’s a strength he’s frequently complimented on.
“As agents, we believe we’re perfect. We believe we’ll know how it works,” Phil said. But, as the market showed in 2008, this mentality was furthest from the truth. “What I realized was I was just wrong about price all the time. That’s when I got this reputation for being Mr. Market Guy, because I got really, really real about what does the market do, how does it work, how do I watch it, how do I see the future.”
As you reflect on your own strengths and weaknesses, take advantage of educational resources and, of course, stay well-versed on your data.
Our expertise cannot be taken away from us.
“People always say to me, ‘Phil, you seem to know some stuff.’ You’ll learn really quickly I don’t. But I’ll share with you what I do know,” Phil said. “What your clients really want is knowledge and expertise. The one thing that cannot be taken away from us is our expertise.”
As real estate brokers, we take our knowledge and translate it to our clients to help them make informed decisions. We all have the same job: to show our value. Your expertise is your value proposition, so when everything else seems to be failing, you have something few others have.
Make it specific, not anecdotal.
As Phil reminded us, you can be busy and the market could still be changing. People are answering the question “how’s the market” in very vague ways— “It’s great! Now’s the time to buy. I’m busy all the time.” —and that’s not the way to add value or to build an honest, trusted relationship with your clients.
Phil tells his clients what he knows. “I expect your home value to drop 2-3 percent this year.” He then waits for their response and figures out what they need from him. It may not be a seller’s market, but your clients may still want to sell for reasons other than to get top dollar for their home.
There’s no such thing as a good or bad market. There’s a seller’s market and a buyer’s market.
“How many of us wish we bought in 2009?” Phil asked. Hands raised.
There’s always opportunity; it’s simply a matter of for who. In a buyer’s market, those who have capital have the opportunity to get good deals on properties. Even sellers in a buyer’s market who may sell their home for less than they wanted, may in turn get a chance to purchase their next home higher up in the market for a good deal.
Phil spoke about the importance of forming trust in your relationships with your clients, especially by giving them real, honest information and letting them make an informed decision. “I don’t think there ever is a good or bad time to sell. I think it’s going to fit in their lives and their goals long-term,” he said.
There are three things you can do to prepare your business for any market.
#1: Focus on the fundamentals.
Maintain your relationships, because that’s what this business rests upon. If 74% of home buyers and sellers say they would definitely use or recommend their agent again, but only 17% actually do [NAR 2018 Profile of Home Buyers & Sellers], what does that say about our ability to keep our relationships with our clients? Stay in touch with strategies like the 33 Touch plan. Also, build a routine. It doesn’t have to be push-ups and a run at 5 AM. What motivates you to get up?
#2: Pay attention.
Case-Shiller is one of the most anticipated reports for the housing market. “What astounds me is, it has a 90 day lag! Using the MLS, I could tell you about the market yesterday,” Phil said. So, pay attention to the market and know your neighborhoods.
#3: Add value.
It is your fiduciary responsibility as a REALTOR® to provide expertise to your clients. Add value to your relationships and your business services, and reinforce how your knowledge makes you worth working with. You exist in a diverse market of value propositions, and if a buyer goes with another broker, that means they saw greater value in that relationship. To keep your business thriving in any market, focus on identifying and communicating your unique value proposition to build relationships with prospective buyers.