Success in Real Estate Requires More Than HOPE
I have watched many struggle through this latest recession and real estate downturn, and I am reminded of what has always followed downturns in the past…upturns. I have heard many real estate professionals over my 35 years in this industry; as a broker, office manager, investor and educator, pray to be granted "one more boom." So many agents and brokers in the industry fail to take advantage of the "good times" and only come to the realization that they missed those good times after they are over. So have faith, the market will turn. That is not in question. What is in question is will you be ready to take advantage of the next swing up, for yourself and for your clients?
What makes me so confident that the good times are coming? History. Historically, real estate downturns lead recessions and lag behind in recovery (Real Estate and Business Cycles by Fred E. FoldVary). I have personally experienced this a number of times as a real estate broker. One of the most memorable was in the early 1980's. We had a "Savings and Loan Crisis," The government created the RTC (Resolution Trust Corporation), and folded one Savings and Loan into another…taking over massive amounts of properties and managing (or mismanaging) and disposing of them.
The conventional wisdom at the time was that interest rates would never go below 10% again and that real estate was grossly overpriced and only fools would dare to buy. Most people now wish that they had purchased more real estate in the 1980s and held on to it through a few up turns since then. While we may not be at the bottom of the market yet, we are more likely than not, close to the bottom…taking into account geographic differences, in some areas, we may be at the bottom. Now is the time for many to buy…low prices, motivated (desperate) sellers, historically low long term interest rates, and for first time homebuyers, an $8,000 bonus from "Uncle Sam."
Not convinced? Let's examine the record. Tracking of business cycles began in the 1800s and there have been close to 30 measured cycles since the measuring and recording began. As sure as I have lived through downturns in the economy, I expect an upturn. I can't tell you when, but I am confident it will happen. Will you be ready for it?
Success requires planning. Old news. "Not having a plan is planning to fail." Do you have a business plan for your real estate business? Does it contain the essential elements such as a Sales Plan, a Technology Plan, a Marketing Plan, a Website Plan and a Budget? If not, your plan for success is, not uncommon unfortunately in this business, HOPE.
HOPE is not a conscious choice, but absent real planning, it is the default choice…the choice you made by not planning. For many real estate professionals, they:
HOPE they will succeed
HOPE they'll get a listing
HOPE the buyer will make an offer
HOPE their sales skills will improve
HOPE their website is visited and generates leads
HOPE they close enough sales to pay the bills this month
While HOPE has its place, it is too passive a way to approach an aggressive, competitive business. Deliberate planning, discipline and commitment are essential elements for anyone who wants more out of a real estate career than a few sales a year…and yet many whom you meet in the business cannot articulate anything close to a systematic approach to selling.
Real estate is a sales business, and sales is all about numbers, ratios, and percentages. What systems and methods do you have in place that will allow you to improve your efforts and your results, week after week, month after month, year after year?
Here are a few HOPEFULLY helpful hints:
1. Create a business plan that is specific…specificity is the key to execution. Begin with your annual goals and break it down into the daily tasks required to get you to where you want to be at the end of the year.
2. Create a Sales Plan - How many contacts are required for each closing? If you are unaware of this personal statistic, you should begin to determine just what it is for you, and then, what you can do to improve on it. "Contacts Create Contracts," so set about creating a plan that will maximize the number of contacts and the number of communications with each.
3. Create a Technology Plan that is consistent with your Business Plan. Be sure to establish a budget and a timeline for the integration of the technology into your daily practice.
4. Create a comprehensive, integrated Marketing Plan that includes conventional marketing and is tied to your internet marketing.
5. Create a Website Plan that takes advantage of the marketing power of your listings. A listing is a marketing asset and can be used to bring you buyers as well as other listings.
6. Create Budgets - for your business in general and for each listing.
7. Be Found. Create profiles on social networking sites such as Facebook and MySpace. Use the power of the Internet to connect and reconnect you with people…"Contacts Create Contracts."
8. Take the new NAR Web 2.0 & Social Media Course for REALTORS® online course and begin the transition to a consumer population of Gen X and Gen Y buyers and sellers.
9. Differentiate yourself from the competition. Your choice is "Be Different or Charge Less."
10. Become an e-PRO® and join a resource and referral network 40,000 strong.
11. Take advantage of NAR's Program Right Tools/Right Now. Amazing tools and values offered at discounts and in many cases, for free. Check it out.
I HOPE this has been helpful.
Saul Klein ePRO/GRI/CFP