Even in today’s uncertain market, there are many things smart agents are doing to weather the storm.
That’s right—the best real estate agents aren’t passively waiting for the storm to pass; they’re preparing for a possible recession and doing everything they can to pick up momentum and come out on the other side a leader in their market.
We talked to top producers from across the country to hear their advice for other real estate professionals looking to recession-proof their business. Here’s what they had to say.
1. Set Up Your CRM to Stay Top of Mind With Your Clients
The real estate industry is full of smart, successful people, but there are a handful of them that make us drop what we’re doing and listen if they’re speaking. Robert Reffkin, CEO and founder of Compass, is one of those people.
Reffkin recently took to Twitter to talk about how important a customer relationship management (CRM) tool is to a successful real estate business, especially in times of uncertainty.
“What’s the #1 thing real estate agents can do right now to get ready for the rebound? Set up their CRM to stay front of mind with their sphere of influence.” pic.twitter.com/wvILoMAm8r
— Robert Reffkin (@RobReffkin) March 25, 2020
If you don’t have a CRM yet, now is the time to get one. Agents who don’t are going to be at a huge disadvantage very soon. Luckily, you don’t have to break the bank to get a CRM. An affordable CRM like Freshworks CRM has plans that start at just $12 a month.
2. Make Sure Your Contacts Know You as a Person First & a Real Estate Agent Second
Recessions are challenging for everyone. There are only so many corporate communications a person can receive before that impersonal, unemotional message is completely tuned out. That’s why, especially in times of stress, it’s important that your clients know you as a human being who cares about them, and not just a businessman or woman 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 from a humanitarian perspective as well as a business perspective that agents focus their prospecting and marketing efforts primarily on human connection. There should be little to no direct outreach for new business, little to no listing or property promotion, and business in many cases should not be mentioned at all. Rather, we should all do our best to seek human connection and support our society at large.”
Just a phone call or a text checking in, asking if there’s anything you can do to help, can mean the world to clients who are having a hard time.
3. Use Slower Times to Organize & Prepare
In most U.S. real estate markets, there is a high season and a low season. When snow starts flying and the holidays approach, a lot of real estate activities naturally start slowing as prospects and clients are busy with other things, which gives real estate agents a chance to catch up on much-needed organization and preparation tasks. If you can think about a possible industry slowdown as a chance to prepare yourself for the inevitable bounce back, you’ll get a lot done and feel better about it too.
Jamie Safler, luxury real estate specialist with Douglas Elliman in New York City, told us:
“This is a great time to start organizing and filing all of your contacts. Sometimes this is hard to do when you’re working full time, but organization is a big key to success, and you may even find some folks you forgot about going through old emails and business cards. Sort, file, and prepare so that when offices are running at full speed, you’ll be ready to reach out to these people and be the first to make contact. Plus, staying active mentally is a great way to keep your spirits up too.”
4. Focus Your Marketing Attention on Your Sphere of Influence
When buyers and sellers are uncertain about the market, they’re less likely to respond to paid lead generation efforts. This means real estate agents who invest heavily in paid leads are going to see a lower return on investment—a challenging circumstance when you’re already seeing fewer deals come across your desk.
You can fight this trend by focusing more on your personal sphere of influence and developing 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 kid’s 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.”
5. Cut & Track Your Expenses
This is something you should be doing in the best of times, but it’s even more important during the worst of times. When commissions aren’t flowing into the bank account the way they used to, you’ve got to make sure that you’ve got a handle on the money going out.
A great way to think about this is ROI, or return on investment. For every dollar you spend in pursuit of your real estate goals, what are you getting in return? Is there a specific financial return? Is the return gained time? Convenience? If you can’t adequately justify to yourself what you get from the money spent, especially when times are lean, it is time to cut that expense.
If you are going to spend money on leads right now, definitely check out BoldLeads. With a proven lead generation method and a very competitive cost per lead, they are a great option for real estate agents who are looking to get fresh leads and mix up their approach.
6. Make the Switch to a Nearly All-digital Operation
If you haven’t done so already, a financial crunch is a great time to get your business out of the old world and into the digital realm. Client meetings can be replaced with Zoom or Skype calls, property tours can be replaced with Matterport or Asteroom tours, and closing can be conducted digitally. In a time of uncertainty, finding ways to conduct business as usual without things being business as usual is crucial.
Aleksandra Scepanovic, Managing Director of Ideal Properties Group in New York City, told us:
“The first order of business, in the day and age of the coronavirus, is to take your business confidently online so that you are as close as humanly possible to an all-encompassing ability to conduct business as usual in a highly unusual and uncertain time.
“Brush up on your ability to actively listen to your instincts, but more importantly, your live streaming 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.”
7. Develop Short-term Goals
Market conditions during a recession or leading up to a financial recession can vary wildly, so setting year-long or even quarterly goals can be an exercise in frustration.
Agents can relieve this frustration by focusing on short-term, weekly goals. Make your measures of success about work done rather than results. When people aren’t buying and selling as much, the resulting fruit of all your labor is delayed, which makes it a poor measure of your success.
Instead, focus on accomplishing the work you set out to do week-by-week. The reward for that success will come a little later.
8. Maintain (& Improve) Your Relationships With Existing Clients
When the economy is changing thanks to uncertain conditions, it may be necessary to change your approach to servicing your buyers and sellers, but you should still continue to service them. 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 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.”
9. Build a Financial Safety Net
With the real possibility of fewer commissions on the horizon, it’s important that real estate agents build out a financial support structure so they can keep themselves afloat even without closings happening regularly.
One way to do this is with home equity. 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 also leverage the equity in those properties to improve their cash position too.”
10. Stay Informed About the Real Estate Market & Other Economic Conditions
If things in the real estate market do go south for a little while, we likely won’t be alone. Lots of sectors of the economy are going to contract, and it’s important 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.”
11. Don’t Stop Marketing
Now is definitely not the time to become a secret agent. The last thing you want is to drop off the radar completely 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.
Try turning down your active lead generation campaigns, and even some of your more involved (and expensive) property marketing efforts. Instead, focus your 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 first person they think of.
12. Push Pocket Listings
The real estate agents who thrive in challenging conditions are the ones who can leverage their unique advantages. If you’ve got pocket listings, this is one of those advantages.
For those pocket sellers who’ve said, “Find me a buyer and I’ll consider it, otherwise I am not putting the house on the market,” it’s an all-out search. Start hitting up your sphere of influence looking for the right match. Reach out to fellow real estate agents to see if anyone has the right buyer.
If you’ve got sellers who have given you the “I’d only move if I got an ungodly amount of money” line, sometimes the best approach to take is actually treat them like buyers. Think about it: They’ve indicated to you that they’re open to moving if the right sale price came along, but what if you found them the home of their dreams, thus motivating them and knocking down that sale price requirement a little bit?
13. Look for New Market Opportunities
When the housing market shifts, it very rarely shifts all at one time and all in the same direction. Typically, a downturn in prices and demand for homes in one sector of the market, say, luxury property, means an uptick in prices in demand in another. If your area of the market is quiet, start by expanding your reach a little outside of your normal transactions.
Ashley Baskin, a real estate agent with Vantis Capital Advisors, told us this:
“If a market change does occur, 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.”
14. Become an Expert in Your Brokerage-specific Tools
Many of us work for big-name brokerages that provide us with some powerful tools for running our real estate business. However, most agents don’t take full advantage of these tools, usually because they aren’t totally sure how to best use them.
In times when business is slower, set aside time to learn the ins and outs of your brokerage-provided toolkit. These tools may be the difference between simply surviving and really thriving in a tight market.
Philip Scheinfeld, a luxury broker with Compass in New York City, told us how he plans to leverage the tools Compass provides their agents:
“We are very fortunate to have access to incredible apps through Compass, one of which is ‘Compass Collections,’ which is their tool for gathering listings to have at a glance and where we can quickly put together lists of brokers to email and send categorized blasts. I’ve been using this app nonstop since working from home. Once I hear back from the brokers, I can then determine who may have motivated sellers for my buyers who are looking to invest in the New York market.”
15. Adjust Your Current Listings’ Marketing More Aggressively
If you’ve got listings on the market when a recession hits, the race is on to move those properties before buyers really get spooked. 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.”
16. Consider Teaming Up
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, 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.
17. Negotiate a Temporary Change in Your Split
If you’ve done the math on the commissions coming in and it just doesn’t add up the way you need it to, approach your broker and see if there is an option to negotiate a temporary split agreement that is more advantageous.
For instance, if you currently have no desk fee, a split of 75/25, and a cap of $25,000, perhaps offer a cap increase to $35,000 but a split of 90/10. Your broker will likely know you won’t make cap this year, but remember—they’re better off in the long term if you stay an agent and keep closing deals, so they may be willing to be flexible with your split on a temporary basis if it keeps you working.
Over to You
Come out on the other side of recession ahead of the game.
Savvy recession-proofing strategies can set real estate agents up for major success. A financial recession, along with all its negative consequences, can have some unexpected benefits for upstart real estate agents. For one, a recession eliminates many of the advantages that legacy brands carry.
During a time when money is tight, clients care more about value than about brand and gravitas, so the agent playing field wins. Your job now is to find creative ways to demonstrate that value to your sphere. 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.