Market shifts are inevitable, and dwelling on the past—when mortgage rates were next to nothing or when multiple offers were the norm all across the country—won’t do much to change current circumstances, whatever they may be at the moment.
“The market is the market, whether it’s up, down, shifting or stable,” says Andrew Bell, broker-owner of NextHome Assurance Realty in Jacksonville, Fla. “We agents don’t dictate or control it.” Accepting this fact and preparing for any market will help brokers set their teams up for success. Here’s how.
Prepare for the Next Market
“Whatever market you’re in, always get ready for the next one,” says Bell, who oversees 17 agents. “Real estate agents are successful when they have the ability to work in any market,” he explains.
“Market shifts are part of the real estate industry, and it’s imperative that agents and brokers understand this ebb and flow, and plan accordingly,” agrees Mauricio Umansky, founder and CEO of The Agency and author of the book The Dealmaker: How to Succeed in Business and Life Through Dedication, Determination, and Disruption. “As we’ve experienced over the past several years with the pandemic, the 2008 recession, and the subsequent housing downturn, adaptability is critical to ensure agents weather any storm and come out on the other side with a thriving business,” he adds.
Preparing for the next market means readying yourself and your agents for a variety of scenarios—downturns, interest rate fluctuations, unforeseen circumstances that might affect you locally, etc. When you as the broker prepare and keep your agents informed, you create a strong foundation on which your agents can stand.
Be Honest With Agents
When Bell worked for a title company from 2005 to 2010, his company advised him to deny that the market was down. “We were trying to blow smoke, which wasn’t right,” he says. Instead, Bell urges brokers be upfront with their agents when the numbers are lower. Then, give them context and proof by sharing stats on the local market. To do this, Bell maintains a private Facebook page for his company, where he posts helpful data.
Stay in Touch With Clients
Even if agents are currently overwhelmed with business, they should never neglect maintaining their CRM, says Bell. A robust and consistent plan to create regular touch points with clients is important to long-term success.
Umansky agrees. “Cultivating trust in any market is paramount,” he says. The key takeaway: Agents shouldn’t forget about their existing clients, he explains.
In volatile markets, property owners often want even more communication and reassurance from their agents, he adds. Tell agents to be available, so their clients know they can easily pick up the phone or send an email, he advises. Encourage your agents to talk with their sellers about pricing strategies and to offer advice to their buyers on rate shifts and seasonality.
“In any market, my number one tip is: knowledge is power,” says Umansky. “It’s essential for agents to stay informed on market trends and what experts are predicting. Subscribe to publications like this one, closely follow economic factors like interest rates, know your neighborhoods like the back of your hand, take courses, and attend conferences as frequently as possible so you’re building your knowledge and your Rolodex,” he adds. To this end, his company regularly hosts educational sessions, which agents can access on his brokerage’s Agency University platform.
Don’t Catastrophize Downturns
In down markets, look at the numbers from a macro perspective, says Bell. The differences between the recent crazy hot market (with 6 million to 6.5 million transactions nationwide), an average market (about 5.5 million transactions), and the recent slowest markets (4 million to 4.5 million transactions) are not earth-shattering, he comments. Normalize the fact that the market tends to go from peaks to valleys, he advises.
Set Realistic Agent Expectations
When new agents come on board, Bell tells them that the business is a lot harder than they think. About 50% of agents leave the industry two years in, he explains. After six to nine months, he warns them, they’ll probably want to quit. When business doesn’t come to them, they might even get a part-time job. And, once they do that, they no longer invest the necessary time and effort into prospecting, which will prevent them from flourishing. To estimate what they might make the first year, they should figure out their take-home income from three or four transactions. But they should be prepared financially to make no money for the first year.
Budget Like You’re Always Broke
If you’re extra cautious when it comes to spending, you’ll have an easier time staying in business, says Bell, who teaches his agents this mindset. “A lot of brokers spend money before they get money,” he explains. For instance, they’ll invest in more office space if they’re growing their agent count. In contrast, he advises hitting target numbers before making these kinds of investments. “That is the mindset every broker should have: Less is more,” he adds.
Never Stop Marketing Yourself
“Even during the most challenging of times, don’t hold out on marketing yourself and your business,” says Umansky. “Failing to pursue new opportunities because you’re afraid of a downturn or hiccup will do nothing but paralyze you.” For example, during the 2008–2009 housing crisis, while most agents were cutting back on their marketing, Umansky was ramping his up. Among his efforts, he took out pages of ads in the Los Angeles Times’ property section. “Taking strategic risks is what will set you apart from your competition, and that’s ultimately what brokers should be advising their agents,” he says.
Spend Your Marketing Dollars Wisely, However
Help your agents understand how to make sound marketing decisions, advises Bell. If 60% of real estate business comes from an agent’s sphere of influence and only 10% comes from internet leads, agents should put their marketing dollars into the former, not the latter, says Bell. To make this easily understandable to his agents, he’ll review the numbers with them, explaining the low conversion rate of internet leads.
One way to help is to have agents make a list of their marketing channels, how much they invest in each—on an annual, monthly or quarterly basis, for example—and then figure out which sales were a result of which channel. They’ll be able to easily see where their return on investment is greatest and make an educated decision on what needs to be cut.
Spend Time on Social Media
Encourage your agents to use social media platforms to build their name recognition and showcase their strengths, personality and value, says Umansky. Many of his agents maintain a strong presence on Instagram and YouTube, offering content such as short videos that provide tangible and easily digestible real estate–related takeaways. Social media platforms are free to use, and they’re a great place to present content for the consumer.
Shift the Marketing Message
By emphasizing how his agents change lives rather than on how many transactions they’ve handled, Bell is confident his team will appeal to prospects in all markets. “If you don’t want agents to only make it about the money, then stop making it about the money yourself,” he says.
Bell suggests to his agents sharing a story about how an agent helped a client who was a single mother list her house so she could move near her daughter in another state. Brokers can also showcase their investment in the community through philanthropic efforts.
Invest in Company Culture
With the market returning to a more normal pace, many brokerages are scaling back—and agents are thinking of leaving, says Bell. Instead, build loyalty by scaling up your company’s culture in a cost-effective way. For instance, his company hosted its holiday party at someone’s home and included karaoke to max out the fun. Plus, his brokerage created two internal committees—one for community involvement and the other for agent involvement, such as breakfast get-togethers and football games.
Create a culture that supports agents, provides them with education and invests in them as human beings rather than producers, and agents are more apt to stay.