Agents…This is YOUR real estate market!
Finally! A market where true sales, marketing, negotiation, and hard work actually matter again. Let me explain… Looking back over the last 10 years to 2004 thru 2014, we have experienced two completely different markets. 2004-2006 we had a huge run up in prices, easy financing, and every seller was happy with the price they got for their home, then from 2006-2013 we had a massive percentage of short sales and REO’s followed by some incredibly low inventory blips that made every agent look like a genius. If we look at the skill necessary to succeed in these markets, they strangely had one big thing in common… Sales skills, marketing, negotiation skills, all were not very necessary to succeed in real estate sales. From 2004-2006, agents really didn’t have to convince their sellers to price the home competitively since the easy financing and boom market caused the buyers to just pay outrageous prices for every home since they were buying payment and could get a large loan by simply fogging a mirror. Negotiating commission, listing period, contingencies, repair requests, etc. etc. were not very hard when the seller was making hundreds of thousands of dollars in profit in many cases. Sure, there was some negotiating here and there, but let’s compare it to the early to mid 90’s when many of us had to tell our sellers that their homes would be worth less every single month that their home sat on the market, and their equity was evaporating. If you cut your teeth in the 90’s like I did, then you know what I’m talking about. There were some amazing agents in the business that knew their scripts, dialogues, strategies, etc. and good skilled agents made a great living. Yes, there were lots of distressed sales, but very different market from 2006-2013. In the 90’s, the government didn’t pass short sale legislation and short sales meant a whole different thing to sellers, banks were still somewhat human and we were able to speak to a negotiator rather than upload documents into a website and receive an email back with their decision. If the bank rep said no to something, we could call and talk to them. We also had 6% commission HUD REO’s, Fannie and Freddie REO’s, VA REO’s, and we were almost always able to talk to a human being and negotiate for our clients. In 2006-2013 the average short sale client could care less what our commission was and advertising, marketing, negotiation skills, all were almost completely unnecessary. Price it right, reduce the price if it doesn’t sell, and open escrow. Unlike the 90’s, agents even hired “short sale negotiators” to do the hard part. Times are changing dramatically and it is my hope that it stays this way for a while!
So here we are, big shift in available inventory, short sales and REO’s are disappearing rapidly and represent a very small part of the market now in Orange County/Southern California. Prices ran up over the last 18 months due to inventory challenges kick starting the market, forcing us to a point of stabilization and leveling off of prices with us looking forward to very slow and sustainable price increases that are more based on legitimate supply and demand, economic conditions, employment numbers, etc. If you look at the recent graph covering the last 12 months, you can see that sales counts are close to resembling the 12 month ago numbers plus or minus a few hundred. But look at the active listing count… Rather than “hundreds” more, we are looking at “thousands” more homes on the market. This will make the market “feel” much slower than last year “felt”, but it’s only because now their are many more homes on the market. What does that mean? Well, it means that we will definitely have to see “List” price corrections, expired listings, sellers unhappy with their agents, for sale by owners, days on the market will increase, and buyers will become much tougher at negotiating now with thousands of more homes on the market.
Below, I am listing the things that WILL once again be important and the agents who sharpen their skills, and affiliate with full service firms that offer support in these areas.
1. Become a skilled salesperson again! Your clients are depending on YOU to sell their home or sell them a home. YOU will need to be able to properly articulate more than ever the reasons your clients need to take certain actions, and allow you to do your job. Over the years, the term salesperson has become a bad word, yet despite the overall negative connotations of sales people, we are the people who keep the economy moving! Every time a great salesperson is able to ethically make a sale, the economy gets better and someone gets something they want or need. Embrace your inner salesperson and learn your objection handlers, scripts, dialogues, strategies, tactics, and become a great communicator of information.
2. Sharpen your negotiation skills! You’re going to need them! Getting a transaction accepted will not be as easy as before. A great negotiator can NOW save their client thousands of dollars, and avoid huge headaches. Get back to presenting offers in person and show off your negotiation skills verses the co-ops agent and save your client money because they chose YOU! Or just fax over your offer and hope for the best like so many other agents will keep doing!
3. Better learn to fight for your fee! Sellers are smart and if you can’t even stand up for your fee/commission then how can you stand up for their equity???? Believe in your value based on your ability to deliver incredible results, service, and convenience! If you don’t then they won’t. Commissions are negotiable. Great negotiators will be paid more, and because they are great negotiators, they are worth more!
4. Marketing matters more than ever! If your company doesn’t provide any marketing support, then you need to do it yourself. If you have to do it yourself, then you will have a huge challenge keeping up with huge national real estate company’s advertising and marketing offerings. While your company may have told you that “print is dead”, “marketing doesn’t matter, just price it right”, “brand doesn’t matter, you’re the brand”, etc. this was almost believable the last 10 years, but now, no one in their right mind believes those statements anymore. A massive print strategy, combined with a massive online strategy, with professional photography, high quality marketing materials, social media, video, international advertising, and a legitimate budget dedicated to each listing, orchestrated by a skilled and experienced marketing person (not most real estate agents) will not only get listings sold for top dollar, but will get you more listings! Does your company have a marketing department, marketing director, marketing coordinator, etc.? Or do they still keep telling you it doesn’t matter? “But I’m on a 100% split!”, try telling your listing prospect that they should list with you because of your split. 🙂 What is your marketing strategy, budget, timeline, for each listing? Can you articulate it to a seller prospect? Or is your strategy just to work them over on their price?
5. Must embrace technology! Most got away with not embracing technology this last 10 years. The sellers didn’t care if you knew how to use an iPad when they were in foreclosure and just wanted you to get them out of their debt. But now when one agent shows up with a full multimedia presentation and can show how this will make their transaction easier, and how they will be able to use cutting edge tools and strategies to expose their home to the market, and another shows up with a huge folder with papers falling out all over the place, all other things being equal, the high tech agent is going to win! You need to know how Zillow, Trulia, Realtor.com, and others, work and be able to show them how you will maximize the use of these sites. You need to show them that you have a legitimate social media marketing strategy as well.
6. Know your company value propositions and HAVE a strong company/BRAND! While brand may not have mattered when the clients were in short sales, or prices were escalating by 20,30,40,50+% overnight, sellers will, as they always have, choose the company they trust and feel the safest with when their equity is at stake. When a seller can get a large, reputable, well known, financially stable firm, for the same price or maybe a tad more than a small unknown firm, if presented properly, they’re going to likely choose the well known BRAND. Brand does matter despite some company’s saying it doesn’t. If brand didn’t matter, then no one would ever buy a Mercedes, BMW, Lexus, Bentley, Rolls Royce, when they could by a similar car in size and shape for a tenth of the price. To believe that brand does not matter, requires someone to take a complete departure and vacation from common sense. 🙂
7. LEADERSHIP! Finally, leadership is going to matter more than ever. Great leadership that is! The best athletes in the world excel with great leadership, and so will you as a real estate agent. Your manager, your broker, your legal team, training, executive team, all need to be fully engaged in your business in one way or another. When you have a transaction going sideways and need help, you need to know that you have the best of the best on your team. Time in the business is not the only thing that matters, it’s experience and success in the business that matters more. Great leadership will help you close transactions that would otherwise fall out. Great leadership will help you grow as a business person and do more business with less effort, work smarter, and grow in your profession. Is your leadership team engaged or distracted constantly? Are they still teaching 20 year old strategies or are they bringing new and challenging strategies, tactics, and ideas to you consistently that keep you ahead of your competition? Are you inspired and motivated by your manager/broker? This is one of the most critical components of success in real estate, and one of the most overlooked.
In closing, remember, this is an “agents” market! This will be a market where focus, skill, and a thorough marketing strategy will set you apart from so many agents who will still use last years strategies this year. Inventory is UP, sales are level or very slightly down yet increasing. There is more opportunity to build a phenomenal business and career that will transcend any market. Finally, we will get to deal with real homeowners at the dining room table again and showcase our true value to them. When another agent fails there will be opportunity for the skilled agent/salesperson to come to the rescue! So watch those expired listings this year!
Get back to sharpening your skills, attend great training programs, attend great sales meetings, get a coach, and take advantage of this phenomenal market that we have before us! Your clients need you to be the best you’ve ever been!
As always, I am here to help and am known for my strategic mind and ability to use cutting edge tools and tactics to impact agents in a way that helps them grow and succeed. Don’t hesitate to reach out to me whether you are already a Coldwell Banker agent, or not, as I am always open to sharing why my team and I have been so successful over so many years!
I can be reached via email at Brad.Pearson@camoves.com or via cell/txt at 714-782-2723.
Posted on April 14, 2014, in Education/Coaching, Motivation, Uncategorized and tagged agents market realtors market shift change marketing skills brand matters coldwell banker residential brokerage previews international north orange county brad pearson yorba linda anaheim hills sales . Bookmark the permalink. 4 Comments.
Wow! Just what I needed to fuel my day! Brad you inspire me to stretch my abilities and liberate me from self-imposed limitations that hold me back… thank you! Trish Schmidt
Thanks so much Trish!!!
Great stuff Brad…every reason why I switched firms and to follow in your leadership. Scott