Market Shift - What’s your next move?

Strong-proofing your real estate business

Do you hear the sound of silence?

Quiet, isn’t it? Silence except for the sounds your sellers and buyers are making with their cries of frustration.

Sellers: “Why didn’t I list earlier this year?” or worse “Why didn’t you tell me to list earlier?”

Buyers: “Interest rates were in the 3% range and now over 7% - how can I afford a home? ”

These are the sounds of our business, as we have known it, coming to a screeching halt!

Let’s face it, the last three years have been good to many of us who work in real estate production. Production is defined as representing buyers and sellers in their real estate transactions and it is the main source income most real estate agents will ever have. There are three other sources, not including opening your own brokerage. I’ll discuss each of those in an upcoming blog piece.

For those of us in real estate as our full time profession, production is the wheel that makes it happen. So what happens when production slows down or even stops as when a broker retires or when we have a significant market shift coupled with rising interest rates and historic high home prices.

It’s simple, the strong and the smart will survive! In most businesses, there is the 80/20 rule, 80% of the business is done by 20% of the sales force. So strong brokers will continue to list properties and close transaction for their buyer and seller clients.

And the smart agents have been reading industry news, anticipated the market signals and are now prepared for what looks to be a long cold winter and perhaps a timid spring.

And as commission-based small business owners, we all experience the ups and downs of income flow needed to meet our personal monthly expenditures.

If you haven’t prepared for this downturn, then your life is about to get very stressful.

However, a market shift is time to start good habits that will prepare you for the next shift in the market.

When times are good, we buy things. And in real estate, there is no end to places you can put your money from apps that promise to enhance productivity, to advertising, client management solutions and lead generation.

Now is the time to take a hard look at those monthly/quarterly business obligations that need to be met (car payments, gasoline (ouch!), MLS dues etc) and trimming or cutting out others that you won’t miss but you may have forgotten about.

Once you have done that, do the same for your personal and household expenses. How many streaming apps does your household really use? One client told me she found three Youtube TV subscriptions on her credit card, all added by various members of her family.

Are you receiving enough of your commission?

Market shifts are also a good time to evaluate if your arrangement with your brokerage is still a fit.

It’s not always about the commission split or fees. So only you can answer what’s best for you. If you have a thriving business and don’t need to leads from your brokerage or a desk or someone to greet your clients, you may be paying too much in commission and fees.

Is it loyalty or is it comfortable?

Without change, we cannot grow. If you’re comfortable at your current brokerage but not feeling the love or want to seek new challenges, it’s time to talk with your designated broker. Are there things your current brokerage can implement to better aid your growth? If the answer is no, change is your best option.

Don’t let loyalty cost you money and growth. But, as in all important relationships, leave on good terms. One thing we know about real estate, you will do business with that broker or firm again, so being honest and professional is the only way to handle it.

As agents, we evolve, and as we do, we must continually reevaluate and seek offerings and challenges that take us to the next level.

My wish for all of you is that you maximize your potential and strong proof both your real estate career and personal wealth in the years ahead.

If I can assist or answer any questions, please reach out!

For more info on your real estate career with eXp Realty

11/10/2022

Michele Rennie is a WA Managing Broker and an OR Principal Broker and heads up blue & vine group | eXp Realty in Walla Walla WA.