Be Prepared for Changes in the Real Estate Market
As a new real estate agent, you know to expect the unexpected. The only consistent aspect of the real estate industry is that you are bound to experience ups and downs in the housing market. The market is volatile, and its whims impact how you do your job. For example, the current lumber shortage, the 2020 coronavirus pandemic, and the 2008 housing crisis each changed how active real estate agents practiced - in fact, the commercial real estate market is still trying to recover after last year’s popularization of working from home changed how businesses purchase (and use) office space. Understandably then, it’s important to grasp how the ups and downs of the market can affect you as a real estate agent. This guide will give you tips on how to stay afloat through market changes, especially downtimes.
Prepare for a Down Market By Saving Money Ahead of Time
The best and easiest way to prepare for downturns in the real estate market is to make saving money a habit. The last thing you want is to be unprepared when home prices dip and interest rates increase. After all, the high income potential of real estate comes with its risks, including a lack of revenue in slower months. If the rainy day you prepare for never comes, great! But don’t take the risk of not being able to pay your bills because you overspent (and undersaved) when things were going well.
When business is going well, put away capital for expenses during down times. Obviously you cannot control the market, but you can control your spending and liquidity. If you’re prepared and stick to a budget, you’ll have the confidence to survive whatever the market throws at you.
Continue Marketing and Networking With Real Estate Professionals
Even when the real estate market takes a downturn, people still need to buy and sell homes. Home sales may dip, the property market may not reach typical levels, but that doesn't mean you stop the grind. The quest for homeownership never stops, regardless of what the mortgage rates look like, and first-time homebuyers can be especially determined, even in a tumultuous market. So don’t turn into a hermit and stop establishing your name by cutting off your real estate marketing or networking strategies, even if the going gets rough.
One of the best ways to survive a dip in the housing market is to continue to put your name out there. Think of utilizing low-cost marketing strategies like cold calls, flyers, and social media. Consider hosting cost-effective professional events, like a REALTORS® Day at the Park, to continue your networking efforts without carving a hole in your wallet. Remember: A slow market is the same as a “normal” market if you remain hungry and continue to work hard for new listings as they become available.
Reach Out to Past Clients for Referrals
The other way to stay above water, so to speak, is prior clients; they may have leads for you during slow times. This real estate marketing strategy is more long term, and not one you simply whip out when it’s needed. Instead, you must provide exceptional customer service and nurture your relationships with your clients so that they’re not only excited about how you helped them find their new home, but also eager to share your name with anyone in their circle who could benefit from your services.
When clients talk about you to their friends and family, it’s called “word-of-mouth marketing”, and it’s one of the most effective long-term ways to bolster your organic leads over a period of time. With this strategy in mind, keep in regular contact with your clients over the years. After all, you played a massive role in either helping them find their new home or selling their old one and taking that next step in their life - so you can reach out when big events occur in their life. Just remember to keep your correspondence professional, friendly, and respectful. There are definitely do’s and don’ts for maintaining client relationships, but if you nurture these relationships and create a rapport with past clients, you’ll reap the benefits. One piece of advice: Don’t just blatantly ask for listings or referrals. It’s better to lean into the human aspect of your relationship (asking how their family has settled into their new home, wishing them a happy holiday, etc.) than to make your client feel like you view your relationship as transactional by focusing on business only.
Tap Into Different Markets
If the times get really tough, you can always stray from your typical market. If you aren’t securing the listings that you usually do, this is a good strategy to consider. One way to do that is to tap into the rental market in your area. Whether you’re dipping your toes into flipping houses and working with real estate investors in real estate investment, assisting in rent-to-own arrangements, or trying your hand at a different geographic area, there are options for new real estate niches to grow your listings if you’re struggling to get them.
Stay Up to Date With Real Estate Market Industry News
Although your workflow may be slow, it is important to stay engaged with industry news. Here are some of the best real estate resources to follow:
- Agent Essentials Industry News
- CNBC Real Estate News
- Realtor.com’s Real Estate News and Insights
- Forbes’ Real Estate Section
Did You Know?
Those who lived through the 2008 market crash will never forget it. An unprecedented growth of the subprime mortgage market enabled borrowers to take out adjustable-rate mortgages, which started out with low monthly payments that would grow much larger after a few years. Unfortunately, these borrowers were largely defaulting on their loans in the fall of 2008, causing the collapse of the stock market - which, of course, negatively impacted real estate along with the entire global economy. If you’re tempted to stray away from saving, networking, and staying up to date with industry news, remember this example of market volatility to get back on track.
Complete Your CE or Take Relevant Classes
During market lows, real estate agents may have some extra time on their hands. Think about completing your Continuing Education early or taking additional courses to earn new designations and certifications. It’s never a bad thing to stay ahead of your CE and expand your knowledge base. Just as you budget to prepare for downturns in the market, use this time as a way to remove potential future hurdles from your career trajectory.
Whether the market is floundering or flourishing, The CE Shop will be with you every step of the way to keep you informed on all things real estate. So get out there, build a reasonable budget that allows you to save for slow times, network with your past clients along with your professional scene, and keep your finger on the pulse of the industry. After all, each downturn opens the door for a market rebound, and we want you to be ready for the highs, too!