Weathering a Market Downturn
by Bernice Ross, Ph.D. MCC
Owner, Teleclass4U.com, LLC and RealEstateCoach.com
Copyright © 2005
RealEstateCoach.com and Teleclass4U.com
All rights reserved in all media.
A buyer's market is the most difficult type of market in which to make money. Are you prepared if this downturn strikes your business?
For the last six months, I've been telling agents that a downturn is coming in many of the major markets. Recently, Alan Greenspan predicted a downturn in the real estate market that will result in a decline in prices and fewer sales. For example, what happens to your business and your profitability when gas is $4.00 or more per gallon? If you are already struggling to get by, here are seven strategies to help you weather the upcoming storm at the gas pumps as well as a potential market downturn.
1. Have buyers pre-approved, not just pre-qualified
Save gas, time, and effort by asking all buyers to be pre-approved, not just pre-qualified. Pre-approval means that the lender has looked at the buyers' credit and is willing to make a loan provided the property appraises and the title is clear. Do not work with buyers who cannot qualify to buy property. If buyers refuse to take the necessary steps to be qualified, stop spending your valuable time and your gas money on them. If you have shown more than 20 homes to a buyer who has not yet purchased, ask yourself whether you have done an adequate job of identifying what they really would like to purchase. If so, you must decide whether you will continue to waste time or spend your time prospecting for a more motivated client to take their place.
2. Shift to "virtual caravans"
Ask your manager or broker to put together a virtual caravan for your weekly office meeting. The listing agent takes at least ten digital pictures of the property. Each agent has 3 minutes at your office meeting to describe the listing and to show the digital pictures or virtual tour (if available.) These pictures and virtual tours are then posted on your company website as 24-7 open houses. Everyone saves on gasoline.
3. Motivate incoming ad and sign callers to give you their email address
When someone calls your 800 call capture system, motivate them to leave their email address by offering to send them a virtual tour of the property. Be sure to let the caller know that they will only receive the virtual tour and no spam from you. When you send the virtual tour, include a link back to your website that will allow them to see additional properties.
4. Change your approach to floor or "up" duty.
Incoming calls are easier to convert into leads when you can send the individual a link that allows them to see all the details of the property from the convenience of their computer. Instead of having the floor or "up" broker describe the property, offer to send the caller a copy of the virtual tour either at their email address or via a CD to their home address. Both ways you obtain valid contact information.
5. Go paperless
My office is drowning in paper. Tons of notes from meetings are in notebooks and even though my notes are dated with the topics at the top of each page, I still need to type them into my PC. Of course, I never do it. I spent today setting up my new tablet PC. It has been a battle since my technology IQ is about as low as it can be. When I began jotting notes on the tablet, however, I could see all of those files, all of the sticky notes, all of this paper magically disappearing. I LOVE the handwriting recognition feature that translated my handwriting perfectly into a Word file. How much time could you save (and how much gasoline), if you never had to copy notes on to multiple forms again or never had to drive back to the office to obtain a purchase contract or listing agreement? How many more clients could you serve if you could stop driving and handle everything on-line with a transaction tracking platform? One agent said she cut back her work by 75 percent. More importantly, my current laptop when packed for travel weighs about 15 pounds. The tablet, packed with the same equipment, weighs about the same as a medium sized shoulder bag (a little over 5 pounds). GOODBYE to arm, shoulder, and neck aches from lugging around that extra weight! (One CAVEAT: For those of us over 40, adjusting to new technology can be very challenging. To make the transition as painless as possible, set aside time for training.)
6. Stay home
Unless you have an unusually nice office, working from your home can increase your efficiency dramatically and provide you with a much better work environment. If it takes you 15 minutes to commute to the office, that's 2.5 hours per week or 125 hours per year. That's enough for a three week vacation! The virtual office concept does work. If you have space, set up a separate bedroom or your den as your office, provided you can shut yourself off from the rest of the activities in your home. Go to the office for meetings and to meet clients. Of course, you can cut down on showings by sending your buyers virtual tours first so they can identify the properties they most want to see.
7. Use video to be face-to-face
The cost of a web-cam is about $100 and you can obtain a service that will allow you to send video emails for as little as $9.95 per month. Do you really need to drive to see that seller when you could send a face-to-face message on video? Better yet, what a great way to be in direct communication at the end of a long day when it's too late to call a client you really wanted to contact.
Remember, small changes can result in big savings in both your time and money. Prepare today just in case you have to cope tomorrow.