The biggest wins in our life and careers often come after the most meaningful challenges. If you are a real estate agent that has been licensed for less than 10 years then this article is for you, and if you are a real estate agent that has made it through the 80's then this is still for you.
Our industry has and will continue to change and experience changes in the market place. Those who are in the business for the long haul, through the good times and the dry times know that there will always be a need for housing. The skill as an agent depends on ones ability to adapt, educate your clients, and continue soliciting business and continue marketing.
The formula for successful marketing is in the continuum and consistency not in the bank rolling of extravagant themes during the peak seasons of your career.
- Continue basic marketing - A real estate agent's sphere of influence is still the best source of business. If an agent has only 100 people in their sphere, they then have 100 additional spheres to tap into. The key to having access to this layered sphere is by never being absent for even a month. Your sphere must never be left to wonder if you are still in the business. Simply put, a monthly mailer campaign through a service provider will never miss a beat for a minimal cost of less than $600 annually for approximately 100 people. In addition to the mailer campaign, agents should now more than ever utilize the personal hand written notes, birthday cards, and other notices of important dates and events in their sphere's lives. Agents can review marketing products and services at quantumdigital.com.
- Whether it's a buyers market or seller's market, educate your clients - Educate yourself and your clients on not only the comp's but the area absorption rates for their subdivision and per price point in their subdivision. Doing so will give clear direction to seller's as to the price points with the highest number of transactions on a monthly basis as a means to prevent over pricing. The absorption formula can be calculated on a 6-month or 12-month basis to uncover the average number of sales per month and the remaining months of inventory. Example: 30 solds divided by 6 months is equal to 5 solds per month. If there are 40 active listings then divide it by 5 solds per month to find that there are 8 months of inventory. Out of a 12 month possibility, 6 to 7 is normal. Even 8 is not the worst it can get. That means to a seller if they put their home on the market today in an 8-month market, on average it will take 8 months for it to sell. Constant weekly communication with sellers about price changes and increases in inventory will continue to prepare them for the offer they will receive. Agents must watch the market for subtle shifts such as a slowing in sale pendings and continued showings without producing an offer of sale. This could be a sign to shift the price to remain competitive. Add more into your seller education than the three comps in the CMA. Conduct a regression study to show the trends of the neighborhood for the past 2 to 3 years and buying trends in regards to swimming pools, bedroom and other characteristics about your seller's home that are unchangeable and may require a price adjustment.
- Buyer education - Stay on top of the latest lending packages made available in your area. For those who take the step, 2009 will be a time to purchase homes at an affordable rate with very affordable lending percentage rates. On February 4, 2009, the Senate signed a bill that will allow a 10% value tax deduction up to $15,000 on new and pre-owned homes. Previously it was a $7,500 tax deduction on new homes only. Continue to have buyer's prequalified, and ask some of the seasoned agents around you about all of the contingent offers they wrote in the late 80's and early 90's. Many agents practicing today have only been trained to pre-qualify their buyer, have the buyer representation agreement signed, and get them to the closing in a relatively short period of time because the market has lingered around a 5 months inventory. Just as a buyer rep agent must prepare his buyer to write a well-priced offer with a pre-qualification letter in a 4 or 5-month market, a buyer rep needs to be equally diligent with their buyer as they would a seller. Meaning, showing data reflecting market value in a particular area by price point distribution and absorption rates will prevent low ball offers.
- Preview properties! - Agents tend to listen to other agents and so on. At the same time potential buyer's and seller's are listening to the news and their social network of friends. Agents should begin their career by studying relevant data and taking the time to preview available properties in their market areas. What better way to coach your seller's and guide your buyer's than to have first hand knowledge of other competing homes in the area.
By Cynthia Perkins, MAP ABR, GRI, A-REP, Real Estate Coach