I've been thinking (and writing) a lot lately about the realities of today's real estate market. While I'd love to be all Rah-Rah and Positive and Enthusiastic and Optimistic, I just don't think such emotions are necessarily warranted in many parts of the country. I'm lucky to work in a market (Denver) where real estate IS moving - there ARE buyers; there ARE sellers and there IS money to be made by the real estate community. In fact, I've even played in a few bidding war games the last several months for retail properties (that is, not underpriced REO's).
But that doesn't mean I'm not worried or stressed, and so is everyone else I know whose livelihood depends on real estate closings. And I can't even imagine what it must be like to work in markets like Detroit, Tampa or Phoenix. Or, for that matter, to be a brand new, green bean rookie agent.
Fact is, it's tough out there. Not impossible, but tough.
Don't get me wrong, I think this will pass and that there will be a tremendous backlog of business unleashed upon the agents who are still around. The Good Old Days will very likely return to some degree, hopefully sooner than later. But the challenge is to still BE around six months, a year, two years from now when those days are here again.
So, in my own self-interest, I've been examining some of my pet teachings to see if they still apply "as written" in this less-than-vibrant economy. I'm willing to make some changes to my business model in response to changing market conditions. But what changes exactly?
That'll be the theme of this week's blogs! Stay tuned and Happy Monday!
Just Released!
The Seduction of Your SOI Starter Kit
In this business, which I have been in for 28 years, it is a given that the cycles of up and down occurs. The strong agents survive, others fall off. The survivors have several things in common: work harder and accept it isn't an easy market, keep positive and never be negative to clients/others. Be honest to clients about value, time on market, challenges but end with a positive outlook and thoughts. Stick with it and build a strong foundation for when the market recovers you will be a mile ahead of the others. Keep your chin up and writing does help!
I understand how you feel, the first decision to make is the self belief that you will not just be surviving but you will adapt and find a way to thrive in this market. Less deals going around is tough on everybody, but somebody is making it happen. In NYC the market is going down really quick and lots of agents are freaking out, but keeping an even keel is the only way to go about your business.
JA - will look foward to your updated blog posts ! I agree - I think it is critical for agents to adjust and adapt to what is working in their local markets and focus on that. Lead generation is key. Some great comments here. I like what Connie said - it all begins with hard work, a strong work ethic to keep moving foward, to market and lead generate.
Hi Jennifer, thanks for an honest but still a very positive post. When things are tough and problems exist, having a positive attitude doesn't solve the problems or make tough times dissappear. It does however give you the strength to go on and enables you to see the big picture rather than focusing on the "ills at hand." I look forward to reading your future posts.
Randy
I'll also be looking forward to your updates. I'm not an official rookie anymore, but I still haven't been around for the 'up times'. However...I WILL be, as I'm not a quitter!
Jennifer - Thank you for understanding. I am not in the Detroit market, thank you Lord, but I am in Michigan. Last month 65% of the homes sold on our MLS were short sales or foreclosures. It is tuff. I am not ready to throw in the towel but I am struggling. Hopping blogging will help me keep my head above water!
Hi JA. That is why I was surprised you wrote against new agents working a part time job.
I think survival is key to success.
Ken
Ken - funny, that IS something I will address later this week! Although my tune hasn't changed much...
Tami - Oooooooh.... that's painful!
Sue- I know you aren't! And please do know that the UP times in this business are a heck of a lot of fun!
Randy - I do wonder if I just convinced myself that everything is peachy it would be... but over the weekend I decided that I'm gonna be positive AND realistic!
Chris/Stephanie - "Lead generation is key" - Another topic I'll cover later this week!
Morgan - For some, survival may be a respectable goal. I do believe those of us who do WILL be rewarded.
Connie - Great points!!!!! Thanks for being the first to comment!
Yea! I agree with you all. Like Tami Vroma I'm in Michigan but not in the Detroit area. Ann Arbor has it's difficulties but I'm getting through it. I believe looking at what's working or looking at unnecessary expenses and revising your business plan. I'm just like some of the others that's feeling the pinch but managed. I look forward to a good 2009.
Looking forward to your updates
I am also thankful to be in a good real estate market, but there is not doubt it is tougher. I will look forward to you upcoming posts!
Hi Jennifer, I am still pretty new in the buissines but working for a company everybody knows helps. We have buyers looking for the good deals and selling those is better than nothing right now. Plus I really liked coming into the buissines now, that way I learn all the hard stuff first and will have more fun once it turns around that is what keeps me motivated!!!
Hi Jennifer, I'm a green bean rookie, You introduced me to AR, and I am really looking forward to your next posts. It is a difficult market right now, but for me it's a good time to learn everything I can. The seasoned agents in my office have had extra time to help me - I can't imagine what it would be like to jump in when everyone was so busy they didn't have the time. ( Several of those agents have part time jobs that are helping them stay afloat) I've only had 2 closings so far - but I will be ready when the market heats up. Again, I'm looking forward to your next words of wisdom! Thank you!
Good morning to you Jennifer! i am looking forward to reading some of your insights to this market we are in. I am sure things could be worse.... but i would rather not find out!
Michael (the eternal optimist)
I am a new agent with only 2 closings myself. I have a part time job to pay the bills but i am realy enjoying working in this tough market, i love the challenge its almost like a hunt! I feel like it is only going to make me a better agent. The way i look at it is if can grin and bear it through this i will reap the rewards in the end! I am new to AR and look forward to more of your blogs.
JT Toupin
A very realistic "appraisal" of the current state of the market. I look forward to reading your upcoming blogs, too, to see what it is that you'll "delete" and what it is that you'll keep and will try.
Jennifer - markets change. basic concepts of developing a sound sphere do not. i do not think it is necessary to revise marketing. I do think that one of the problems inherent in the downturn is the mad rush that occurs to change anything and everything.
Each market is unique. Each person in your sphere is unique. Stay focused. Stay involved. Stay busy.
It is a great time to be an agent. Only those that really want to be an agent are going to remain.
I wrote a blog awhile back called something like 'Why I love this market!' which echoed some of these sentiments about overcoming the challenges of, well, a challenging market! I do believe that rookies who start out now will be much better equipped to succeed - assuming they make it through. But I guess that's why they call it a "challenge!"
JMac - I agree that what has always worked in the past will continue to work in the future and believe me, I'm all over my beloved (and effective) SOI model. However, I believe there is some room for improvement, which may be nothing more than, as you say, "Stay Focused, Stay involved, Stay busy!" STAY tuned!
Striking a balance between being positive and being realistic is very important for our clients. It goes back to the theory of not over promising and under delivering. If it is going to most likely take 4 months to sell a clients home I am not going to tell them I can do it in two.
Hi Jennifer, Like the Denver area, the Seattle market is slow but not devastated like some markets. Most of the agents I know and deal with will probably be around when the market improves because of their experience and dedication. Most career fatalities occurred to those individuals that became agents when the going was easy. Put a sign in the yard, sell a house. Now that's it's real work, they are starting to disappear, and that's a good thing. I like working with competent people and I know clients will ultimately benefit by the winnowing.
Amen Jennifer, and good comments by all.
Hi Jennifer, The market has a way of thinning the herd doesn't it ? This cycle was severe enough that mang good agents have been forced out. Good selling to you !
I agree with your blog about business is still out there it just takes a little more of an effort to educate the buyer and sellers on current market conditions...I have astarted to blog because the phone isn"t ringing as much...I hope that is a change that will benifit in the future...from
Yes, we have to adapt and change our business models if necessary. The strongest will survive.
It's just find for everyone to say "just be postive". By state of mind doesn't pay the bills! Many agents have even had to face foreclosure of their own homes! I heard today that our MLS did an analysis and 80% of all members of the NNEREN MLS system, had not had even 1 transaction this year!
Jennifer, I believe we have to be realistic but positive and that is very hard right now. I am struggling just to pay my bills because I agree with Connie, I'M NOT A QUITTER! And furthermore, I love this job. So any suggestions for staying in business without starving would be appreciated. I will take a part time job if I must but have you noticed that there's just as much work to do when you're not having closings? So if I take a part time job, I don't know what I'll give up. Sleep?
I agree with Marian -- what do you give up?? I seem to be doing more marketing and blog-reading and CE class-taking when it's slower. So to add a part-time job on top of that?? Besides, I just finally quit the part-time job that used to be a full-time job for 18 years. I was so busy the first half of this year, and now that I've got 7 days a week to fully dedicate to real estate...well...you know the rest of the story. Argh. Thank God my husband's company is strong.
Well said Jennifer. I've just discovered your blog and look forward to your thoughts this week...
Jennifer, Congratulations on the feature!
We certainly do go through cycles in this business, and being able to adjust to them and continue to do "what is right" is such a big part of being in the business for the long term, as a Career!
Being realistic is more important than being "all Rah-Rah and Positive and Enthusiastic and Optimistic" for all the reasons you mentioned. While many would like to see the return of the "Good Old Days" I think we are unlikely to see the markets we saw in 2003, 2004 and 2005 ever again. The "Good Old Days" was fueled in large part by bad lending practices...and hopefully those mistakes won't be repeated in the future. What we can hope for is the return to a normal, balanced market. Not quite as sexy, but at least stable!
Kelly - I agree. Funny thing though - the boom years in Denver were in the mid-to-late 1990's and lending practices were somewhat similar to today's - maybe not quite as stringent, but as I recall, there weren't all that many options available and you did have to qualify. So, I have hope that it's possible to have a robust market without giving money away to people who can't afford it...
I too, am in a great real estate market (Dallas/Fort Worth). I think regardless of the market, agents should remain positive. :) Great post.
Jennifer, I'm looking forward to your "new" theories, or maybe revised theories? Still love your Sell with Soul book, but it's tough out there. Here in the Raliegh area we're not devasted, but our market over the last few years has larger grown because of the migration of the NY, CA, FL and other over appreicating areas. Now that they can't sell, a lot of our buyers have dried up. I'm interested in seeing from you what else we can do besides hang in there.
Good for you Jennifer. The best we can do is keep our feet on the ground and be realistic about our market.
I've changed my business model 3 times in the past 2 years as our market has changed.
It's worked and the agents in my network are still in business.
So am I.
Im looking forward to the next post! Thanks for sharing that with us.
Jennifer -
Here in Chicago, the RE Market is tough - but not universally. High-end Chicago Neighborhoods like The Chicago Loop, The Gold Coast, Lincoln Park and Bucktown are still holding their own, even as business has dragged in other Chicago Neighborhoods and many suburbs.
You have to re-tool, to a certain degree. Cut expenses. Commit to continued training and education. Seek motivated sellers and buyers, while not spending time with those smply "testing the waters." Not doing so would simply represent denial.
But you never compromise your business integriry, and you should never lose your faith that the business will, indeed, turnaround. As you said - hopefully, this happens sooner, rather than later.
Let's hang in there, and try to keep the faith, and keep positive.
DEAN & DEAN'S TEAM CHICAGO
Jennifer, You know I love ya and I loved your book. How about this for your next title "From SOI to REO. How to evolve in today's market" Just a thought:)
HA! Wouldn't that be a switch! Although I disagree that REO is the way to go at this point - too many people on that bandwagon! But speaking of SOI, these days are great days to nurture your SOI in anticipation of future better times. I really do think that those of us who hang in there will get a HUGE reward at the end!
Dean - some great stuff in your comment! When you talk about not spending time with water-testers - are you referring to buyers or sellers?
Linda - yeah, it's tough and I can't fix that - no one can. I've been thinking about this topic all day and am coming up with some interesting (in my mind anyway) ideas...
Jennifer,
Survival is the key. I'm in a fairly hard hit market in St George Utah, and we've got agents dropping like flies. Lots of second jobs, and lots of agents who are losing their homes. I really hope to see a Southern Calif / Las Vegas recovery, as those are major feeder markets for people relocating to St George.
If more agents leave the business, the rest should work to capture that market share!
Jennifer...
I'm sorry but I don't agree that things will go back to the good old days. Should that happen it would mean no one learned diddlee from this mess. Changing the business models is exactly what needs to happen. What once worked, doesn't anymore. There is so much room for change in this business it's amazing. Those of us who are willing to make the changes will be the ones still here next year selling you a book :)
TLW...ROAR!
LOL...
Now see BB had a book remark for you too. That's kinda why he and I have been together all our adult lives. We think alike :)
TLW...ROAR!
TLW - Maybe the good old days won't return, but the good new days will... with different rules, customs and expectations. And hopefully, VASTLY different training methods! I'm so fed up with the focus on PROSPECT PROSPECT PROSPECT with barely a nod given to being exceptional managers of a real estate transaction - I'm hoping a refocus in this direction will be one of the fall-outs of the shake-up. Because frankly, if more real estate agents were actually trying to sell houses instead of get new business, houses would be selling. The inventory in my neighborhood is abysmal. I have REAL buyers and nothing decent to sell them. I blame the real estate community for that. But that's a different soapbox...
Your post and the following comments I found to be very interesting. Personally I am positive this is a great market to make money in if you are working with buyers, and sellers if you are pricing property correctly. With so much inventory and prices the way they are, I am all but jumping up and down when I am in front of someone.
Having done this since 1978, I can't remember anyone who was not looking for a deal. It is no different now, only the deals are better and there are more of them. I think the work ethic and habits of a good agent work in a market like this or any market. However, you have see where the business is and focus on that. Who in your area is making any money? Where are their deals coming from? It is not just luck. They may be working harder, smarter, whatever, but they know where the money is being made and they have positioned themselves right in the middle of it. If it is a listing agent, you can bet they know that price is king and their listings are the best priced values around, and they are the ones that are selling. These folks know all the marketing dollars in the world will not sell an over priced listing and if it does not sell they do not get paid. If it is a selling agent, they see all the deals out there and they have zeroed in on the best ones and they are telling everyone they know about them. When this market turns, and I agree with you it will, they will be heroes to the people they got involved in something now.
Is my attitude one of finding something positive in others misfortune? I don't see it that way. I see myself as realistic with my sellers that the market sucks from their standpoint and if they want to sell they are going to have to be price sensitive or else they will own the house 6 months from now and the odds are very good the price will be even lower. If I am working with a buyer, I am a screaming lunatic of excitement on why they should take advantange of this market. Like I said earlier, in a couple of years when the market turns, I will be a hero to people I help pick something up now.
Someone in an earler post mentioned re-tooling. I think you have to re-tool occasionally, but don't change the things that got you here. Don't re-tool the service, follow up, attention to detail, etc., but do re-tool your thinking as to where the business is and jump in feet first. It's not like you have anything to lose.
Good post, look forward to more.
Jennifer, here in Western Kentucky I specialize in waterfront property on Kentucky Lake and back in October I kept hearing from buyers, "we're going to wait to see what happens with the election". Then the bailouts started and I heard, "we're holding off", and now I'm hearing, "we're going to wait until the new President takes office".
As far as dollar sales are concerned I've have the best year of my real estate career, but as far as numbers of closings it's not so good. I think that indicates that vacation and retirement waterfront property holds it's value. And although we didn't get *hot* like other areas of the country as this market is more conservative, I'm also worried as to how far this is adjustment is going. I think waterfront property is always a good investment and I'm staying optimistic! Better now than ever!
Jennifer, good post, great comments! I too believe that we will come back with new lots of things. And that's ok. I, personally, am learning here at AR and am looking to expand my knowledge of internet marketing, SEO, twitter etc.
It's starting to pick up here in the North Carolina area, but a lot of real estate agents are going out of business. I see a lot of inventory and I am ready, willing, and able to take any buyers that want to move here!!! I am ready for the "backlash"!! bring it on!! :-)
Jennifer, it is true the market isn't what it once was. But this IS a time to remain positive if you really love this industry and what you do. Find other means of income, cut your expenses and when the market comes back you'll be ready and better then before.
I sure hope that you are right1 I am ready for a tremendous backlog to fall on my shoulders!
Debbie
Jennifer stressing only makes things worst. Enjoy what you have and don't buy into the doom and gloom that the media keeps on reporting.
I am here in Detroit and I am surviving! It's very tough but homes are selling and being bought.
I know how you feel Jennifer. It is tough to be positive when things are bad. Perserverence is the name of the game today.
Thanks for sharing, and more importantly thanks for being REAL! Looking forward to your next post!
Read Shift by Gary Keller. You will see that there is a direct correlation of the amount of potential commissions on the market and the number of agents at any given time......at the top of the market and at the bottom of the market. That is why it is actually easier to gain more market share at the bottom of the market. i.e. This is your time to shine to dominate the market when all turns around.....as your fellow competitors are dropping like flies.
Jennifer- I too, like TLW, hope the good old days in that same way don't return. Too much falsehood, too many bloated transactions, I saw them come right thru my door and to the closing table. I shook my head, sometimes I turned the business away, in the end, I wondered if I really did enough.
Now we are all learning. What I take away is that it is good that everyone is waking up. It hurts but it's a big step in the right direction. I choose to be positive, but that is what propels me to work smarter. The alternative stinks.
I think it will continue to be difficult for agents who depend on this business for their sole income but it is possible to make it through this tough time. Looking forward to your posts...