Heraclitus, a Greek philosopher, is best known for his assertion that change is the only constant. However, Ralph Masengill, a former real estate broker who has written two books on change from a business perspective, points out that whether the change is good or bad, it can cause some pain.
Real estate professionals today undoubtedly understand these two sentiments better than most. The industry has been experiencing incredible disruption in recent years in multitudes of ways—from technology breakthroughs and new business models to market woes and new forms of competition—and it hasn’t been easy.
“Change can leave you with a feeling of loss, remorse, or that pit-of-the-stomach feeling you get when things aren’t going just right,” says Masengill, author of Conquer Change and Win (CreateSpace, 2016). “That feeling of loss creates some form of anxiety, anger, or fear.” But once you have a solid understanding of the disruption that’s causing you pain and anxiety, you can figure out the best way to control those emotions.
One disruptive force is that real estate markets are in constant flux. This year, as housing inventory has plummeted across the country and competition for homes has grown more fierce, an increasing number of sales are being done outside the MLS. According to the National Association of REALTORS® 2017 Profile of Buyers and Sellers, about 10 percent of homes sold last year were pocket listings—meaning they weren’t listed on the MLS—a slight uptick from years prior. And in some markets, even more deals are being kept in the pocket.
“There are buyers right now who say, ‘I can find information on what’s on the market, but what else do you know?’” says Sally Forster Jones, a long-time real estate broker and executive director of luxury estates at Compass in Los Angeles. Navigating the entire issue of off-market sales is complicated, and the practice can be ethically problematic, Forster Jones says. “How do you protect that private information that you don’t fully have control over?” she adds.
In her Southern California market, some brokers have more listings off-market than they do on the MLS, but she’s helping her agents navigate the dilemmas by encouraging open dialogue. “It goes back to knowing your value statement as an agent and what you have to offer, and maintaining your own integrity in the end will win,” she says. The team structure also offers support for her group. “They’ll come to me and our sales manager, and we talk about the best, most ethical ways to handle problems,” says Forster Jones, who has owned her own real estate companies and worked in residential, commercial, and property management. “You can’t have the same results by sending a text or email or communicating through a device as you do speaking to someone in person. You have to understand what their needs are and what’s driving their responses to get the best result for your clients.”
On the opposite side of the country, the Charlotte, N.C., market is also dealing with similar inventory issues. According to the North Carolina Association of REALTORS®, the Charlotte area was down to a 2.4-month housing supply as of July. Julie Tambussi, director of marketing at Savvy + Co, which has two offices and 60 agents, says the company decided to create a class on “missed marketing opportunities” to give agents more tools to compete. “We want to stay ahead and teach our agents to make the most of the low-inventory market,” she says.
They’ve found that agents often list a home on a Thursday, with plans to hold an open house on the weekend, but the house goes under contract Friday. “We’ve told them they still need to go forward with the open house to get in front of buyers with transparency that the house is under contract,” Tambussi says. “We never miss an opportunity for promotion.”
Indeed, Masengill says the most successful agents learn to adapt. “If you want to sell like you’ve sold in the past, there’s nothing wrong with that, but you need to accept what’s necessary,” he says. “You must be ready to eliminate as much of the pain as you can, and you do that through knowledge.”
Gretchen Pearson, CRB, broker-owner of Berkshire Hathaway HomeServices Drysdale in San Ramon, Calif., says there’s a lot of spotlight on new business models, which can deflate agents’ confidence. She reminds her agents that it’s not what consumers care about. “My job is to keep the blinders on my agents and make sure they’re creating raving fans and ensure the transition goes easily and smoothly,” she says.
To mitigate the new tech challenges and risks facing real estate practitioners today, Pearson is adding cyber and data security systems and learning how to do transactions using blockchain. “Blockchain is going to speed up the transaction significantly, and we have to accommodate that,” she says. With close to 1,200 agents in 42 offices serving Northern California and Nevada, Pearson says getting in front of change makes it easier in the long run. “Getting mortgages, which take forever now, we’ll be able to do much quicker. We’re talking about a three- or four-day close and considerable savings for the customer on closing costs,” she says.
There are concerns that blockchain could hurt commissions, but Pearson says that will be offset with the ability to do more transactions. Her goal is to improve her agents’ ability to deliver service, which she says transcends any changes effecting the industry.
From the agent standpoint it’s more important to be mobile today than ever before, so Pearson is trying to ease that transition for her agents. She has already invested in SkySlope, a transactional software, and Disclosures.io, software that manages disclosure packages. “We’re doing a lot of custom work with tech providers,” she says.
While brokers and office leaders may do their best to get ahead of real estate disruption, some agents will inevitably still feel the pressures of change. If agents are having a difficult time, Masengill offers four steps for “change management” to help overcome the stress and anxiety that it brings.
- Accept that change is going to happen. Change comes in various ways, but no matter what change is at hand, accept that it’s there, Masengill says. “Once you know you’re going through change, you can anticipate your feelings, which is almost freeing,” he says.
- Set specific goals. Agents can do this individually or brokers can work with their agents to set goals for their business. “Once you decide what your goals are, then you can make changes to your business plan or outreach to clients,” Masengill says.
- Recognize your current reality. In order to get through change and reach your set goals, you have to evaluate where you are now and what you need to do to get through the disruption. “If you want X to happen, and you know for X to happen, Y has to occur, then figure out what your Y’s are,” he says. Outline the best ways for those to happen with the least friction.
- Mindset is everything. Think of change as an investment in your business’s future. “You can’t get in a car race and use a classic car, as souped up as it can be. You’re not going to win,” Masengill says. Whether it be through training, staying abreast of technology, or taking your business in a new direction, look at it as an investment in you.