Working with a client in today's market is extremely challenging for a real estate broker. In many market areas we are experiencing depreciating home values, homes with little or no equity, and clients that struggle to understand a home's true "market value". Challenging times like these demand leadership from us as sales professionals. While there is nothing wrong with acknowledging the reality of the situation we find ourselves in, there are serious consequences to doing nothing while complaining and bringing others down with a poor attitude. One of my favorite concepts from the book Good to Great by Jim Collins, is the Stockdale Paradox. The Stockdale Paradox says, "Retain faith that you will prevail in the end, regardless of the difficulties. And at the same time…Confront the most brutal facts of your current reality, whatever they might be."
When we confront the brutal facts of this reality but fail to offer guidance and hope to our clients, we fail as leaders in our industry. I believe that many of the industry problems we face today stem from a lack of leadership on our part. How many overpriced listings are in our market? How many homes are priced right, yet the marketing and presentation of the home is so poor that buyers will not consider a showing? How many transactions fall apart in negotiation because of a client's unrealistic expectations concerning pricing, seller concessions, and repair costs? The market, our clients, and our entire industry call out for leadership at all levels. And we must answer that call!
You might be thinking: leadership is something only my branch manager or the owner of my company should be worried about. Absolutely not! We all need to be thinking and acting leaders right now. Understanding this need and responding by demonstrating your leadership will differentiate you during challenging economic times and will bring your team closer together. Imagine yourself surrounded by peers that view themselves as "leaders" in the real estate industry. How different the overall culture of your office would be! It would be amazingly different and result in greater success for everyone on the team.
There are many areas where we can demonstrate our leadership; right now clients need us to focus on four key areas. Let's quickly look at each one.
If someone asked you today what the average time on the market is for a home, would you be able to answer? How about current absorption rates, inventory levels, and the average sale price in different communities … do you know those stats? Your clients will expect you to know this information. They need to have that information presented to them when you start the process and consistently throughout the transaction or listing. The importance of good communication cannot be overstated in this market.
Make sure your initial consultation covers market trends nationally, regionally, locally, and at the neighborhood level. Go on property tours weekly to view new homes on the market. Use your technology tools and be updated within minutes when a new listing hits the market, price changes occur and when your competition goes pending. Finally, commit to becoming the expert in your office when it comes to market stats.
In our team meetings, I breakdown the market stats by price ranges in our local cities. I don't do this because I'm a big numbers guy. I do it because I want my sales leaders to understand and be able to explain to their clients how each price range is performing throughout the city and how it will affect the future purchase or sale of their home. We must to be the experts in this area.
If you have not already done so, stop using print advertising as your primary means to get the word out about your listings. There is a new medium out there called the Internet and I think it may catch on! According to NAR, over 85% of home buyers start their search to buy a home on the internet. Make sure your listings are posted on as many sites nationally and locally as possible. Use virtual tours that allow you to track viewer statistics. Have a clear plan that addresses print, internet, and social marketing activities that you will use to market your client's property. Create a web presence that invites consumers to engage with you while respecting their need for privacy. The Internet Empowered Consumer (IEC) is very different than the consumers we worked with three to five years ago. Tailor your marketing to both buyers and sellers with a full understanding of the IEC and how they operate. (For more information on the IEC, please drop me a line).
At your first consultation with a new buyer or seller, take the time to go over current market trends on buyer perceptions, pricing, seller concessions for closing costs and repairs, earnest money deposits, and closing time frames. If you are working with sellers, do not "give away the farm" without your client's permission. I am amazed when I go on a property tour and hear an agent tell an entire group of cooperating brokers that their seller is in dire straits, going through a divorce, has no money and has to sell the house as soon as possible. And then proceeds to tell everyone to make an offer at any price! I sit there and wonder did the seller give the agent permission to say these things??? If they did, was there a conversation concerning whether or not those were the best things to disclose to potential buyers prior to negotiating a sale? Another tip on negotiations in this market is to only speak when you have to, ask lots of questions and let other brokers spill their guts on the motivation level and economic standing of their client.
I know none of us signed up to be Dr. Phil, the real estate broker, but in these challenging times we will often be asked to fill that role. To meet that expectation, I highly recommend that you read books on communication and how to deal with different personality types. One of the greatest skills a sales leader can develop is the ability to identify personality types and then adapt their behavior to mirror that personality type. It helps with communication and understanding the overall expectations of your client.
Most of the clients we work with are normal everyday folks. But when they get into a real estate transaction something very strange happens and no one seems to recognize them anymore. They become more emotional and don't always think rationally. Their demands and expectations are often out of this world. But guess what? We are getting paid to work with them and we need to lead them during this stressful time. The heart of leader is one that desires to serve people with humility. By stepping up and learning new skills in these areas and then demonstrating leadership; we set the stage to be seen as a trusted advisor for all things related to real estate.
I challenge you to start viewing yourself not just as a sales person or real estate broker, but also as a sales leader. Your clients, peers, and team will all be the better for it!
Make it a great day!