Wow, what a difference a year makes! Comparing this time last year to now, active listings are down 44%, average month’s supply of inventory is down 47%, and multiple offers/escalation clauses are the norm rather than the exception (greater Seattle market). I don’t know that anyone anticipated the market we are in today. The question is has your value proposition changed?
Our client’s world certainly has changed. It’s no longer Sellers hoping to get a reasonable offer within 30-60 days. Now it is how to get multiple offers within a week, determine the best price and contract combinations, make sure the home appraises, and prevent the hordes of Buyers from trampling the rose bushes during the open house! What about Buyers? This market is especially difficult for Buyers. Not credit approved yet? Forget about your offer being considered. Just saw the perfect house but want to sleep on it? Yikes, good luck it will still be available in the morning. What about those Buyers who are losing bidding wars time and time again?
So has your business changed to match this crazy new environment we are in? How has your marketing plan/listing presentation changed over the last 12 months? With so few listings it is less about marketing (buyers have no problem finding well priced homes) and more about your strategy for encouraging and managing multiple offers. What are you doing differently to write/present winning offers for your Buyers? Do you have a strategy for identifying off market properties?
2013 will be a terrific year for those Brokers who have adapted their value proposition to the new market. Our Brokers are already ahead in sales and commissions over the same period last year and last year we were up double digits from the year before! If you haven’t changed your approach to the new market and would like some help, give me a call. I would be happy to share with you what is fueling our success.
You could feel the turn of the market in mid-summer of last year. While prices continued to be soft in many areas, the close-in markets in Seattle and the Eastside started to show signs of stabilizing as did affordable housing ($300,000 or less) in most of King County. We are now seeing multiple offers in many price ranges. First time home buyers moving out of rentals (or their parent’s basement) and investors who want rentals, are competing against each other in the low end. Move up buyers who have been sitting on the sidelines are now coming back in to the market before interest rates and prices rise. High end buyers have regained confidence in their stock portfolios and are coming back in with cash or huge down payments.
What does the market look like for 2012? With inventory down over 20% overall and down 32%+ in Snohomish County, it is a Seller’s market in most areas however the level of distressed properties (24% in King and 35% in Snohomish counties) will continue to put a damper on prices.
How does this impact our businesses? As always, well priced listings are key. Buyers do have fewer choices but are more informed than ever and won’t bother with overpriced properties. If a seller won’t price and prepare their home properly, don’t take the listing. Our brokers utilize a unique 16 step seller process that helps us only take listing that sell quickly. As for buyers, with fewer quality properties on the market, they need to be prepared to act quickly and decisively. Being pre- approved by a reputable lender is a given. Making sure your buyers are fully informed on the market so they have the confidence to write an offer when they see a good value is critical. We use a 10 step buyer process to clarify our buyer’s needs and educate them on the market so they can make a confident decision after viewing 5-8 homes rather than 20+ homes.
So what will your business results be in 2012? The brokers in our office increased their commissions 25% in 2011 using our proven processes even though the market was down. We should all have a plan in place to outperform the market. If you don’t and would like help to create one, please contact me. I would be happy to share with you our practices and help you make 2012 one of your best years ever.
I came across a recent poll of real estate brokers and their goals for 2012. When asked what their primary goals were:
o Increase my income
o Increase my time off
o Master technology
o Take the ups and downs out of my business
75% of the respondents chose “Increase My Income” as their primary goal (no surprise). When further asked how much they wanted to increase their income, the response was by 75%-100%. Wow! I know that even if last year was our best year ever, most of us want to do better in 2012 but so many brokers having a goal of doubling their business was a little bit of a surprise. Is it impossible to do? Absolutely not. Will it call for a dramatic change to one’s business? Emphatically yes.
To reach a goal of even a 50% increase in your business year over year requires not just getting better at what you have been doing but to materially change what you have been doing. There is a saying that “Your expectations must match your commitment.” If you expect to increase your income 50%, 75%, or more, you will have to commit to a revised business model. What that business model looks will vary from broker to broker but you can start with some basics:
– Set an annual goal for income, time off, and professional growth / education
– Develop a clearly defined action plan that supports goal achievement
– Create high-quality collateral materials such as buyer packages, seller packages, presentation boards
– Evaluate your technology strategy regarding websites, blogging, tweeting, social media
– Embrace accountability – whether that’s in the form of your broker, a colleague, a coach, or a mentor
If you have set an expectation for yourself in 2012 that you will increase your income by 50%+, will make the commitment necessary to reach that goal, and need help to do so, give me a call. Our office had an average increase in commissions of over 25% last year with some agents over 50%. We can help you do the same.
What’s the most important thing you can bring to your clients? Is it your knowledge of the local market? Is it your negotiation expertise? Is it your property marketing skills? While all of these skills are important for your clients, I would suggest they are not THE most important thing you can bring to your clients.
The single most important thing you can bring to your clients is clarity. Whether they are buyers or sellers, clients who are not clear have a difficult time making a decision. If a seller does not have a clear understanding of the current market and their property’s value, will they price their home to sell? Probably not. What about buyers? Do confused buyers make a decision? No, they want to “think about it”.
How do we provide clarity to our clients? Studies show that 60% of the population is primarily visual learners so we know that showing is better than telling for most clients. Simple charts and graphs are much better methods to communicate than text or single line MLS search outputs. So what to use? Trendgraphix charts are an option but can be busy and hard to decipher. We have a program that uses MLS data to show the client their odds of selling and illustrates the inventory flowing in and out of the market using the concept of water flowing in and out of a pond. Both are good/simple visuals for our clients and help them become clear about the state of the current market so they can make decisions.
Compare these charts to a single line MLS report which many brokers use in their CMAs. Which do you think is easier to read, understand, and provides more clarity for a client? Think about what you use to educate your clients on the market. Does it provide clarity or confusion?
All the best,
As we approach the holidays and market activity slows, it makes for the perfect time to plan for next year. Here are a couple ideas on approaches you might take:
For those that are a little ADD (and who in real estate isn’t), this is the short and sweet version. Set aside one full day for your
planning and start with the following three questions:
– What worked for you in 2011?
– What didn’t work for you in 2011?
– What will you continue to do and what will you add to your business in 2012?
Spend the morning noting the answers to these questions and then grab your accountability partner, manager, or skills group member and
share each other’s answers. It makes the planning more fun/ interesting and you may each pick up new ideas to incorporate into your own plans. Work individually in the afternoon creating an execution roadmap and calendar for your plan. What will you do? What can your staff or assistant do? What can you automate? Be sure to record the dates these activities are to be completed each month. I find getting my “to do’s” logged on my calendar significantly increases the odds the task actually gets done on time.
For those of you with a little longer attention span and who like details, a spreadsheet is a great place to start. Expect to spend two to
three days analyzing numbers (income goal, average sale price, average commission, expenses, projected number of leads/prospects, conversion rates) and creating your marketing and contact plan with a calendar of events that will generate the contacts you need. Don’t forget to incorporate your personal and family goals into your plan as well.
If 2011 was not the year you hoped for and you need a better result in 2012, then now is the time to take action. Call me and let’s create a
customized plan (short or detailed) for your success in 2012 and beyond.
Staying “Top of Mind” with your current and prospective clients is the single most important thing you can do for the success of your
business. How to do that on a regular basis and not be perceived as spamming your contacts is the challenge. Postcards, personal notes, eNewsletters and snail mail Newsletters are all good options as long as there is content of value. Another terrific option is to hold a community event and invite your sphere to participate. Your office parking lot can be a great location for a paper shredding or electronic recycling day. We have used Datasite (http://www.datasitenw.com/) for shredding and 1 Green Planet (http://1greenplanet.org/) for recycling and had a packed parking lot with 50 – 75 cars coming through for each event. Think of the awareness you can build for yourself and your brand with such events. Even better than the added community awareness you will create is that this is the perfect reason to pick up the phone and call your sphere. They will appreciate you thinking of them and offering this valuable service. Whether they take advantage of the opportunity or not, you get kudos for your effort and thoughtfulness. How great is that??
I just scheduled a free health screening day at our office and can’t wait to see the response from the community and the impact on the
business. Our Brokers have closed over $3M in incremental sales over the last six months as result of these activities. I encourage you to start scheduling your own community events so that you can achieve similar results!
Many of your clients have an annual meeting with their CPA, financial advisor, insurance agent, and attorney, however few of them think to do the same with their real estate broker even though their home may be one of the largest assets they own. A great way to stay “Top of Mind” with your clients is to prepare an annual real estate review for them and invite them to discuss it over lunch or coffee. The content of the review should give them a good understanding of what has happened over the last year in the market at the county, city and neighborhood levels in terms of sales activity and property values however it is not at the detail level of a comparable market analysis (CMA). You are not trying to tell them specifically what their house is worth as you would in a listing presentation but rather educate them on the trends in the marketplace so they have a general idea on any change in their property value over the last year. If they want more detail then sure provide it, otherwise keep it somewhat high level so the reviews are easy to prepare and discuss.
Here is the content we prepare for our Broker’s reviews:
* Property Profile from Realist
* 18 Month Trendgraphix Charts at the County and City level
* Neighborhood Market Trend Report from the title company
* Neighborhood Pricing Reports including;
– Odds of Selling Chart
– 90 day Activity Chart
– Competitive Price Point Chart
It takes the staff about 30 minutes to create this package once a Broker gives us their client name and address. It should take you about the same and it gives you a great reason to call your database and set up a brief meeting. Our clients really appreciate the information and it helps keep us “Top of Mind”! A hard copy sample is available if you would like to see our format in its final form. Just give me a call at 206 412 1118 or drop me an email at email@example.com
Success in real estate is all about the ability to stay “Top of Mind” with clients. Statistics show the average person knows 10.3 Realtors and that clients often call the Realtor that contacted them last even if that is not the agent that worked with them on their last transaction. Analysis further shows that you need to connect with your clients three times a month to stay “Top of Mind”. So how do you effectively (and efficiently) do that? One good contact vehicle is a monthly eNewsletter with information of real value. Not a “Time to Spring Forward” message but something with real content that shows the client you put some thought into the message and it’s not just an obvious automated
service. Content such as local neighborhood statistics, reminders of property tax appeal dates, listing of up-coming local events, and year end
market reviews are all good subjects that clients find of interest and can set you apart from the crowd. The key is delivering content of value and executing your contact strategy consistently on a month in, month out basis.
If your office has a system in place for eNewsletters that you can customize, take advantage of it. We create our own customized monthly eNewsletter for our Brokers and use a service by MailChimp to distribute and track the results. Try it. It’s free and effective.
All the best on staying “Top of Mind” with your clients!