We expose the 5 biggest mistakes Real Estate Agents need to avoid during a downturn
Over the past week, I’ve spoken with approximately 25 agents and asked them, how they’re growing their sales business during these challenging times.
Some of these agents have only started their own operations this year, by moving away from big brand name agencies and establishing their own boutique structures, in an effort to retain more of their hard earned sales commissions, along with the opportunity to gain control and achieve financial freedom.
Now you might be thinking, that’s a brave decision in light of the current market circumstances. I, on the other hand, applaud their decision, as I think they’re smart.
These agents are willing to back themselves and choose to have a growth mindset, with the intention to thrive during a downturn in the market.
During my discussions, I did notice however, that there were some common mistakes being made, time and time again.
Here are the top 5 mistakes agents are consistently making and how to fix them, so you can achieve more during the downturn, than you ever dreamed possible.
1. Missing the ‘20% Market Share’ opportunity
Building an attraction business and becoming an attraction agent, must be the end game for every real estate agent.
What is an attraction business, you might ask? This is where you create an agency practice that relies less on the need to chase listings, because sellers call you directly and invite you in, to sell their home or investment property.
How do you do this, I hear you say? The way to become an attraction business or attraction agent, in part, rests heavily on having a 20 per cent or better, market share in your chosen suburb or niche speciality area. Anything less than 20 per cent market share and you will struggle to be on the lips of most property owners.
You need to become the dominant agent in your area, with For Sale and Sold signs and be seen everywhere by locals, including having a robust community presence.
With the recent downturn our industry has seen in some parts of Australia, for varying reasons, this has created a golden opportunity for agents to snare more market share and hit that magic 20 per cent target faster, just by holding firm and pushing forward in their market place, whilst other agents took their foot off the pedal.
What’s that old saying… “You should zig when others zag!” Sadly, most agents, did not see this easy opportunity and therefore missed it!
This might have some real estate agents scratching their heads and asking, why would it be easier to grow market share in a downturn?
Well, let’s take a look at the statistics shall we. Let’s assume there is normally 50 properties on the market For Sale in your area, and you have on average, 5 of these listings at any given time, then this would mean you have a 10 per cent market share.
If the number of listings fell by 50 per cent and there is now only 25 For Sale, however you maintain your average of 5 listings, then your market share has just doubled to the magic 20 per cent.
Now think about this, let’s say you proactively prospect and hustle, to secure more listings and you increase your average stock number to 8. Now…you’ve just hit 30 per cent market share and are now well on your way to building an attraction business.
Presence and exposure equal market share! When compared to your competition, in proportion, you now have more signboards with your name on them. This is turn will give you more Sold stickers and will have more people talking to their neighbours, family, friends, and work colleagues, about the positive and enjoyable experience it was selling through you.
So, don’t just bury your head in the sand, when the market experiences a downturn and hope for the best. Hope is not a strategy! Knuckle down, whilst listing numbers are low and build your Market share.
2. Failure to set clear and defined goals
One thing a downturn market normally delivers, is it will give you a little more time in your day, as you’re not so busy. We suggest spending a little of this time, reassessing and thinking about exactly what’s important to you and what you want from life.
As a Coach, I believe people who know what they want from life, with a clear set of goals, work better, as they know the result of their hard work will yield them the results they’re striving for. The areas to set goals in are – daily, weekly, monthly, quarterly and annually. These will help to keep you focused and energized, when reviewed regularly.
And to take it one step further, we also suggest you will benefit from breaking down your goals into the following 5 categories: (1) health and well-being (2) finances and wealth (3) education and growth (4) family and faith (5) contribution to society.
What you will notice during a downturn, is that there’s a natural pessimism that penetrates people’s thinking. And it’s easy to get caught up in this!
However, in reality, it’s the most ideal time to re-examine and solidify your goals and the things that are important to you; then double down.
Having a set of clearly defined goals is essential, as this is what will assist you to stay focused and motivated, on those really tough days – which we all experience from time to time.
3. Lack of daily focus on what’s important
What’s “the one thing”? What’s “the one thing” that you should focus on today? This is a question that I often ask my coaching and training clients.
Focusing on just “one over-arching thing” each day, helps to keep you glued to your goals. As it makes it very simple to make a judgement call on everything else that comes across your desk that day, as you can either say ‘Yes’ or ‘No’ to it!
Put practically for Real Estate Agents, this means all you need to identify is “the one thing” that is going to have the biggest impact on your business that day.
Now, given that you’re in the business of selling real estate, this should ordinarily relate to a dollar productive activity!
One of the best dollar productive activities I know, is to prospect! Because without prospecting, their can be no listings and without listings, there can be no sales. Hence, the need to prospect!
So, if I were to ask you a question… what’s “the one thing” agents must do every day, would your answer be – prospecting?
We recommend to our clients as a bare minimum, they should be prospecting for at least 2 – 3 hours every day, 5 days per week. Connecting with property owners in your area, with the goal of booking one appraisal or one face-to-face meeting every day, 5 days per week.
As an agent, if you do this and nothing else, on a given day, then you’ve done the most important thing you can do that day.
Remember to stay focused and knuckle down with this basic activity and watch the benefits that flow from it, in every area of your business and personal life. You’ll be so glad you did!
4. Growing an active, clean, and healthy client list
No matter what the state of the market, real estate agents should always be growing an active, clean and healthy client list. However, none more so, than when the market hits turbulent times, this becomes increasingly more important. Why? Because people will list with their most trusted agent!
When conducting your 2 – 3 hours of prospecting per day, you should be making one call, then immediately doing one data entry, into the clients file in your CRM, with whom you have just spoken.
This way, you’ll remember all the details of your conversation and you won’t be left with pieces of paper scattered across your desk, or left in a pile, to be entered into the database or CRM at a later date.
You can then set reminders for your next point of connection and send any follow-up materials you may have promised, during the call.
In my opinion, connection is far more important than the number of contacts you have in your list, or the number of calls you make in a day. So, don’t just rush your calls to get them done.
Having a relationship and a true connection with your client list, by taking a little longer to make the calls and enter the information, will see you benefit from a better relationship with the client, which in turn, will also see you establish yourself, as an attraction agent.
When you truly connect with someone and they feel this, you leave them on an emotional high, as people will often forget what you say, however, they will never forget how you made them feel.
Keeping your client list clean, active and healthy, means your immediately 10 steps ahead of most of your competitors.
5. Being realistic on price with Vendors
Being realistic and honest with your vendors (sellers), is paramount for success in our industry, especially in times of a downturn when there is a negative pressure on property prices.
Recently, we’ve also seen Australia’s GDP take a huge hit, whilst unemployment has sky-rocketed and it’s thought will hit 10 per cent. Which in turn, has made obtaining finance a little harder to secure, as banks are asking for a larger deposit and more collateral up front.
The government imposed responsible lending practices, haven’t helped either, as the banks have been hiding behind this and using it as an excuse not to lend. We’ve seen record low interest rates, yet we’ve also seen a reduction in the number of loans being issued.
When giving advice to both your current and future sellers, all this should be factored into the equation. Sadly, too many agents get caught up and portray blind optimism and set unrealistic list prices, because they’re concerned if they don’t, they’ll lose the listing to a more zealous competitor.
In my opinion, if an agent is not being totally honest and up front with their sellers when it comes to price, they are doing themselves and their client a massive disservice. Not to mention, making their own job so much harder to achieve a sale.
Why, you might ask? Well, there is always the very real chance that prices may soften even further. What would happen then? What do you say to your sellers in this instance?
The very real truth is, no one can accurately predict when the market has hit rock-bottom, except when you can visibly see prices rising and market sentiment improving.
When you’re totally honest with your sellers and lay the cards out on the table, by providing realistic advice, that is ‘Market Current’, your client can then decide what action they wish to take. And due to the honest advice you provide, their decision might just be to sell now, rather than risk an even larger price drop in the coming months.
This is all about maximising the result for your client. It’s not about talking down the market. By having the hard conversation now, you will be putting the sellers in the best possible position, to get the best dollars straight away. It’s a Win for the client and a Win for you!
In summary
I implore you: Don’t make these 5 biggest mistakes Real Estate Agents make during a downturn in the market.
Take the opportunity to modify your approach and achieve the best possible outcome for your clients, whilst building an envied ‘attraction agent’ business in your area, for yourself.
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Did you know that Real Estate Coaching Hub are specialists in providing Real Estate Coaching services?
If you are considering growing your real estate business or organisation and would like some assistance, then please reach out to our resident Real Estate Growth Consultant, Darren Giles.
