The ones that will survive in real estate are the ones that get it. It is that simple. Sources of real estate business and leads that provided income and a livelihood a few years ago, no longer applies to today's real estate business and may not apply again for some time to come. I remember in the 90's I had software for cold-calling, head sets and stayed on the phone 6 hours a day! There was a lot of rejection, but I still made great money in a town I had just moved to! It was a great way to learn the business, and how to handle objections and rejection. I also knocked doors in neighborhoods, that was a great experience and a way to find out what people are really thinking. Then there were the classified ads, and targeted mailings. That worked well in the mid 90's and there was definitely a bang for the buck until everyone got involved in it. Opportunity time in most real estate markets these days is not an opportunity at all. Walk-ins are almost non existent, and since the Internet, there are fewer phone calls that are real inquiries. Last but not least are corporate relocations. There aren't any! It is like the ad, "Help I've fallen and can't get up!" So where are the sources of business these days? Unless you have a relative at the bank that is handing you the foreclosures, you may be out of luck! The real money these days are in cultivating Internet leads.
A good friend of mine that is a broker shares an interesting story recently. He has 3 buyers' agents. One is great at converting leads. For a 1000 leads, she converts 15 sales. That is an incredible number given today's quality! His second buyer's agent converts about 7 closed deals for every 1000 leads. That in my opinion is above average! He has a 3rd buyer's agent that if he gives him 2000 leads he says, "They are all junk!" This guy is totally off base, and should not be in real estate. He doesn't get it, and will never succeed in real estate! He has missed the boat! Warm leads in this market are not the norm any longer! Each lead has to be worked, and followed up several times just to identify the real nuggets! That is what we refer to as "Prospecting!"
Real estate agents got too used to easy money and now they're too lazy to recognize they have to earn it. In our society no one is reading the newspapers, and classifieds anymore that is why most newspapers and real estate magazines are bankrupt! Another big source of our real estate business... relocations...it dead! Who would be stupid enough to move a mass amount of employees in this economy? The fact is that corporations are not relocating employees; they are closing plants and instead are laying people off to protect their bottom line! They will dismiss an employee in one city and hire someone else across the nation for half the wages. Think about it...no moving expenses, commissions or temp housing have to be paid to an employee! The company does not have to take a massive hit on a home equity in one soft market, nor do they have to pay benefits for that buyer to buy a home in another city!
So what does that leave? Internet and online business! This is a business that no one seems to understand, but it is a real money maker! It works 24-7-365 and is global! It is very cost effective. There is no postage to pay for, no address lables, no shelf life on the ads! You just have to work each and every lead that is generated. Yesterday, I had one agent contact 5 person and 3 turned out to be very good leads. Over the years in business I've chose not to have a team but to refer out the business. Some agents on our list made over 150K a year for over 10 years, and one agent I refer to earned over 250K a year just from leads I handed them The difference is that these agents are experienced real estate professionals that know what questions to ask, and then follow up, follow up and follow up! They are not afraid to ask questions, and have learned how to deal with the rejection. They have embraced the new reality of real estate while others just belly ache about how bad things are. Face it, this market is not going to return to the way it was for maybe decades!
The reality is we now deal with a new generation of home buyers. They did not grow up with newspaper ink on their hands, and they do not wait until the new hits the newspaper stands to read the news. This new generation, grew up totally online. They use the Internet to play, learn and gather information. It is the older generations that are dismissing their needs, but most of us are the ones that do not get it. The average real estate agent is in the mid 50's, the brokers are late 50's to early 60's and the buyers are in their 20's!
Their Time Has Passed!
- Cold Calling
- Opportunity Time or Desk Duty
- Open Houses
- Door Knocking
- Classified Ads
- Farming a Neighborhood
- Real Estate Publications
- Corporate Relocations
- Walk Ins
- Yellow Pages
If your listing is sitting and sitting, are you minding your P's and Q's - Price, Quality, and Service? In this sensitive market, price must be at or below market level. Price is now the arrow in real estate for trying to hit a moving target! Now is not the time to try and see if you can attract someone who might be willing to pay for your overpriced listing. Even if someone does make an offer, be careful that the agreed sales price will indeed appraise. Hand in hand is the quality of your listing. Gone are the days of buyers paying top dollar for peeling paint and original carpeting. If your buyer is using an FHA loan or a VA loan, you won't be able to appraise or sell the house without first making certain repairs. While the government list of acceptable cosmetic and structural repairs has softened from former years, the buyer will not be given the loan if the siding is delaminating or you simply refuse to fix that leak because you feel you've done enough. What about service? Mediocrity, and apathy aren't solutions to selling a home! It is imperative that an agent is doing all they can to promote your listing. Some agents just do the 3 Ps - (1) Put the listing in the multilist, (2)Put the sign in the yard, and (3) Pray. The sad thing is that they do not have a plan. In the past these agents sold homes by luck or market demand. They were order takers. They cannot tell you what really triggered the sale, not can they duplicate it! Everything works and nothing doesn't. With 85%+ of all home searches beginning on the Internet, most especially with first time home-buyers, is your home and it's attributes getting the best Internet and web exposure possible? It is critical in this market before you list to make sure the listing agent you choose has the experience to get the job done!
