We’re now heading into an unpredictable real estate market. Inflation is hitting everyone hard, interest rates are higher than they’ve been in years, home prices have continued to escalate, and buyers have cooled on buying homes in the short term.
But there are some things you can do right now to not only survive but grow your business during the coming downturn. Savvy real estate agents are preparing for the slowdown and doing everything they can to pick up momentum and come out on the other side a leader in their market.
We put together some ideas to help you flourish through the recession. We also tapped a few top producers from across the country to get some of their best tips to recession-proof your business. So, strap in and let’s get into it.
1. Look for New Market Opportunities
When the housing market shifts, it rarely shifts all at once and all in the same direction. Typically, a cooling off in prices and demand for homes in one sector of the market means an increase in another. So if your local market is quiet, start by expanding your reach a little outside of your everyday transactions.
“When the market changes, real estate agents need to shift their business model. Expand your territory a little bit, look outside your normal geographic area and outside your normal price ranges, and find where people are still buying and selling.”
In tough times, consider those hit hardest and come up with ways you can help them. Think of preforeclosures, expired listings, and even rentals. The people you help during demanding times will remember your kindness and turn to you for their next transaction, essentially establishing you as their “Realtor for life.”
2. Don’t Stop Marketing Yourself Online (& Add Video)
Now is definitely not the time to become a secret agent. The last thing you want is to drop off the radar in your market. The longer you’re gone, the harder it will be to get back to where you are now, much less move ahead.
Focus your marketing efforts on brand awareness and social media marketing so that your prospects can learn who you are and what you stand for. That way, when they’re ready to pull the trigger on a purchase or sale, you’ll be the person they think of. And if you haven’t started using video in your marketing strategy, now is the time to get on board.
Want to turn up the volume on your efforts? Check out Coffee & Contracts to access hundreds of templates, guides, and a fully customizable marketing system to help you master your branding, stay top of mind with your existing sphere, and generate new leads.
At this time Coffee and Contracts has closed its membership until Fall 2023, however you can join the waiting list now and receive access to their free resource suite and get an exclusive discount when they open their doors again.
3. Set Up Your CRM to Quickly Build (& Manage) Your Database
As the saying goes, don’t get too busy to do the things that got you busy. Setting up your customer relationship management (CRM) to keep track of your prospects, clients, and leads in today’s real estate space is essential.
Focus your marketing efforts on people who will need your services three, six, or even 12 months from now. That will help fill your pipeline with clients and keep your business healthy.
The CRM will work as an assistant, reminding you of important facts about your clients, what you discussed in your last conversation, and when you need to follow up. We couldn’t manage our real estate business without our CRMs. They do a lot of heavy lifting.
If you don’t have a CRM yet, now is the time to get one. Luckily, you don’t have to break the bank to get a CRM. An affordable CRM like LionDesk CRM has plans starting at just $30 a month. And you can test drive it for 30 days—no credit card required.
4. Maintain (& Improve) Your Relationships With Existing Clients
When the economy changes due to uncertain conditions, changing your approach to servicing your buyers and sellers may be necessary. Your client relationships are key at this time of transition, so showing them that you can still help them in whatever market we find ourselves in is important.
Isaac Rosenberg, a real estate professional with over 200 transactions in the New York City market and an agent with Compass, shared this advice:
“Always maintain a relationship and continue to service clients no matter how the market is. Every market is an opportunity for someone. However, even when the market isn’t in your client’s favor at the moment, it’s important to continue to service them and maintain your relationship because the market will always change, and your clients will remember loyalty.”
5. Know the ROI on Your Lead Gen
Track everything you spend and note what drives a return on investment (ROI). When commissions aren’t flowing into the bank account as quickly as they were a few months ago, you’ve got to get a handle on the money going out and the ROI on your lead generation campaigns.
What are you getting in return for every dollar you spend in pursuit of your real estate goals? Is there a specific financial return? Is the return gained time? Convenience? If you can’t adequately justify what you get from the money spent, especially when times are lean, it’s time to cut that expense.
But if you’re genuinely getting quality leads from a lead gen source, you probably don’t need to cancel the service providing those leads. If you’re converting leads and closing deals, don’t fix what isn’t broken. Keep what’s working for your business.
If you are going to spend money on leads right now, definitely check out Market Leader. With an innovative lead generation product that guarantees leads each month (plus an integrated platform to help nurture those leads into clients), they are a great option for real estate agents looking to get the most bang for their lead gen buck.
6. Stay Informed About the Real Estate Market & Other Economic Conditions
If things in the real estate market go south for a little while, we likely won’t be alone. Many sectors of the economy will also contract, and it’s essential to understand the housing market in the context of the overall financial picture. Not all sectors of your market may slow down.
Katie Day, MBA, a member of the Move Me team from Coldwell Banker out of Houston, Texas, shared this insight:
“It’s important to understand how an economic downturn impacts housing. While housing demand may vary over time, housing prices may still increase in certain price points or sectors. In order to best serve your clients, understand how the different price points and types of homes are impacted in your area.”
Companies like Keeping Current Matters provide graphics, charts, and infographics that you can add to your branding and post online. Posting relevant market insights positions you as an expert to your sphere and helps inform your community about current market conditions.
7. Connect With Your Contacts as a Person First & a Real Estate Agent Second
Recessions are challenging for everyone. That’s why it’s important to connect with your clients as a human who cares about them (and not just a real estate agent who wants to help with a transaction).
Ari Harkov, real estate professional and associate broker with Halstead in New York City, gave us this advice:
“It’s extremely important for agents to focus their prospecting and marketing efforts primarily on human connection. We should all do our best to seek human connection and support our society at large.”
Inflation is high, gas prices are astronomical, and the world seems unstable right now. A phone call or a text checking in can go a long way. Plus, you’ll stay top of mind when those market questions come up.
8. Focus Your Attention on Your Sphere of Influence
Turn your marketing efforts to your personal sphere of influence and develop a stronger referral base. These are people who already know and trust you; you don’t have to win them over for business—all you have to do is be present at the right time.
Anne Dubray, a Coldwell Banker real estate broker who has survived several recessions in the Chicago area market, gave us these insights:
“With 33 years of experience as a Realtor, I’ve lived through a lot of markets, and there are things that I do consistently that help my business stay afloat during a recession.
“I always rely on my sphere of influence and past clients. I spend lots of time talking to them, reaching out to them, and supporting their endeavors, such as advertising for their kids’ sports programs and sponsoring events. They are at the heart of my business, and those relationships are key when there is a recession, and it’s going to be a bit slower.
“Also, when there is a recession, I get to spend more time on the things I am involved with and see more people in a social atmosphere, which is a great way to connect with your sphere.”
Using a company like Parkbench can help you stay connected to your sphere and enhance your farming efforts. Parkbench establishes you as the hyperlocal leader of your community, allowing you to give back in a positive and productive way.
9. Make the Switch to a Nearly All-digital Operation
If you haven’t done so already, an economic slowdown is a great time to get your business caught up to the 21st century. Use the slower time to get things set up to run without you having to be at the helm constantly.
Aleksandra Scepanovic, Managing Director of Ideal Properties Group in New York City, told us:
“The first order of business is to take your business confidently online so that you are able to conduct business in a highly digital space.
“Brush up on your livestreaming and virtual tour skills. If you’re lacking in the area, sign up for some accelerated courses to acquire these skills quickly, or talk to a colleague in your office who you know may be comfortable with these technologies and have them help you get on your way.”
If you’re ready to ramp up your online presence with flair, consider getting a pro website from AgentFire. Not only will the designers at AgentFire help you put together an elegant website with tons of customization options to show off your high-quality brand, but AgentFire also offers plenty of marketing tools to boost your online prowess. Book a demo to learn more.
10. Build a Financial Safety Net
As times get tight, you may need a little extra financial security. The majority of real estate agents are homeowners, which means many of us have equity in our properties that may be unleveraged.
Adam Kruse, broker/owner with the Hermann London Group out of Maplewood, Missouri, shared:
“Getting a HELOC (home equity line of credit) in place on any property you own can provide you with a backup in the event closings aren’t happening as regularly as they used to.
“And remember, you aren’t limited to the equity of your primary residence. Owners of rental properties can leverage the equity in those properties to improve their cash position too.”
11. Market Your Current Listings More Aggressively
If you’ve got listings on the market when a recession hits, the race is on to move those properties before buyers retreat. With unrealistic expectations over the past several months, it’s even more important to price homes to move quickly. The Close’s Managing Editor Emile L’Eplattenier, a licensed agent in New York with a background in marketing and branding, told us this:
“Be upfront with your sellers about the possible ramifications of a recession on their ability to sell their home, then ramp up your marketing with new social postings, new agent-to-agent announcements, and even some buyer incentives like a home warranty.
“Your pricing strategy is going to need to change too: prioritize speed to close over the final sale price.
“Of course, you still want to get the most you can for your sellers, but the longer a property sits on the market during lean times, the harder it becomes to sell at any price. Get your sellers the best deal possible now so they can use their proceeds to get into their next place sooner.”
12. Join a Team
As a solo agent, you reap all the benefits of your hard work. On the other hand, you also shoulder all the risks if things in the business go quiet. Joining a real estate team can provide you with a source of leads, some useful tech, a greater sphere of influence, and the financial support you may need to make it through particularly tough patches.
Yes, there is usually a financial sacrifice for this stability in the long run, but staying in the business and making a little bit less is much better than leaving the business altogether.
Over to You
Come out on the other side of the recession ahead of the game. Savvy recession-proofing strategies can set proactive real estate agents up for major success.
A financial recession and its negative consequences can have some unexpected benefits for upstart real estate agents.
Your job now is to find creative ways to demonstrate value to your sphere. Keep communicating with people, create conversations, be as visible as possible, and stay authentically human. We have faith in you. We know you can do this.
What other ways are you recession-proofing your real estate business? Let us know in the comments, and let’s keep the conversation going.