Coaching Corner

By Amy Lessinger, CRB, CRS, Real Estate Business Magazine, October/November 2007

Shut Out the Noise: Capitalize on Opportunities in Today's Market

The chatter is deafening! "The market is awful! The bubble is bursting! We're going to be replaced by dot-com companies!"

If you believe it, open yourself to an adjustment. Put on your earplugs, shut out the chatter and let's have a candid talk about reality.

The level of noise in our industry is taking its toll in areas where it need not. This chatter is breeding fear and retreat. But for the professionals who are the best, the brightest, I see this chatter as nothing more than a distraction.

As a broker/manager, you have a job to do during these "tough times." (I cringe to even say that.) I don't believe these are tough times. I believe they are different. It's a new game with new rules, and we have to figure out how to play and win. Doing that requires an open mind, the ability to adapt and change. The result is that you get to capitalize on the opportunities in today's market.

Above anything else, you must lead. You must set the tone, the example and the path of how you will lead your agents through this different game.

Let's begin with a few statistics. According to a recent article from the National Association of REALTORS® (NAR), "Existing home sales are forecast at 6.04 million in 2007, and 6.38 million next year, below the 6.48 million recorded in 2006." Yes, there has been a decline, but if you listen to the chatter it's as if that decline has been a windfall. If there are 6 million opportunities, your agents may as well be the ones to sell them.

The market is what the market is. We can only control how we adapt and respond. Incidentally, in most parts of the country the market has been this way for the last two years! Your focus must shift, and you must seek out what is possible, today, right now. The focus on past numbers and the endless chatter needs to stop. Look at the present and the future.

Now that we know there are 6 million opportunities, we can examine an interesting statistic. NAR states that 24% of REALTORS® have been in the business for less than one year and only 8% renew their license after one year — which means there is a 92% failure rate for new licensees. Why is this important?

NAR profiles show that 59% of all sales are generated as some type of referral, which is problematic for new agents. They lack one of the greatest sources of income — repeat business and referrals. If you are not constantly educating your agents, both new and experienced, on the value of working by referral, you are missing a huge opportunity.

Experienced agents are in the driver's seat. One quarter of an experienced agent's competition is facing a 92% failure rate. Experienced agents have the greatest opportunity to capitalize on the bulk of business. Experienced agents have a greater pool of past clients, a larger sphere of influence and most of all, they have experience. An experienced agent understands what is needed to get results for their clients during a change in market conditions. They have the resources, as well.

As a broker/manager, remind your experienced agents about this power. Make sure you are educating your new agents on what they can expect. They will have to work three times as hard to produce a similar result. An honest discussion with all of your agents is important, because you are the person on the hook financially to sustain a low-producing agent.

In a changing market, a knee-jerk reaction is to cut back on services to save on the bottom line. I have heard over and over again that companies all over the country are cutting back on their services. This is a big mistake. Your agents need your support and drive to push forward with agent-centered services now more than ever. If you cut back on services, it makes a very loud statement that pulling back in times of change is the answer. Soon, your agents will cut back, too, on their advertising and on their services to their clients. The trickle down effect is a lack of productivity. If you want to cut back, cut back on your number of non-producing agents. Set them free to build a higher quality company with greater results.

One of the most obvious opportunities in today's market is that interest rates are still historically low. Matched with a buyers' market and we're seeing two stars that rarely align at the same time. It's a great time for buyers, and we must be diligent with that message. In our area, prices have fallen to levels they were at more than two years ago. That is a huge opportunity.

The biggest change is that the market has moved into the hands of the consumer. When you first hear that, you might groan and be very afraid. But if you dissect it a little further, you will understand that you, as a CRB, are more equipped than anyone to handle this change. This is a remarkable time to build a real estate business, a career and a thriving practice that is consumer-centered. It is a dangerous time for the hobbyist agent and the uncommitted. By developing a tone with your agents that their focus must revolve around providing an exceptional client experience, you are equipping them to handle what the consumer demands today.

Our clients and customers are more savvy and educated than ever before. They are also overloaded with too much information. They are seeking more time to simply enjoy their lives. Chatter exists about whether Web sites such as Zillow and Trulia may "replace" us.

If you believe that, then listen closely…

According to the 2006 NAR Profile of Home Buyers & Sellers, consumers' use of the Internet for real estate information has increased to an all time high of 87%. However, the amount of consumers who use the services of a REALTOR® has increased during the Internet boom. In 1999, only 77% of sellers used an agent. Today that number stands at 87%.

A professional REALTOR® will always be needed. The consumer craves a competent person to be in the middle of one of the largest financial transactions of his or her life. Many buyers and sellers don't want to take the time to understand the technicalities and the legalities of a real estate transaction, and they certainly don't want to negotiate on their own behalf. They don't want to hire inspectors, schedule repairs and prepare their homes for sale. They want a competent professional to handle everything for them. The Internet and technology can't deliver that. Technology by itself can't meet the needs of the consumer and a non-committed, unprofessional agent can't either. That is why we, as brokers, must lead the shift in our industry and weed out the numbers of non-productive agents we carry in our offices.

Lead your agents. Educate your agents and equip them with the tools, resources, scripts and dialogues they might need to play their best in this new game. Take a close look at your team and figure out if you have players who are committed to winning. If you look at your office and see you have non-committed team members, you have a decision to make. Will you continue to gamble with your future by allowing them to have a position on the team, or will you set them free and allow them to find a team that is more in line with their goals and aspirations?

Amy Lessinger, CRB, CRS, is broker/co-owner of RE/MAX Realty Affiliates in Reno, Nev.