Not every market recession makes headline news and shakes the economy for years like the 2008 crash, but that doesn’t mean you shouldn’t be prepared for recessions big and small. Housing market fluctuations both positive and negative impact the way people buy and sell houses, and should therefore impact the way you do business as a real estate agent. Below are five ways you can set yourself up for success no matter what the market decides to do.
1. Commit to a Professional Mindset
It is possible to be successful in real estate without establishing a professional business as a Realtor and running it like a major company. However, in order to maintain success that will resist market fluctuations, you need to start treating and thinking of your real estate business like a Fortune 500 company. Gather statistical data to make logical, informed decisions, keep records, embrace the practices and mentalities of professionalism and you will be on your way to ensuring your preparedness for all and any market changes.
2. Find New and Varied Ways to Gain Leads
Leads are really the crux of your business. It’s easy to get comfortable when the market is good: you rely on your contacts or referrals to generate leads, and don’t put much time or energy into marketing and pursuing new ways to find leads. But, when the market slows, you will need as many methods of lead generation as you can think of, and if you wait until the market is slow, it will be too late. Get creative now and start gathering new leads from as many sources as possible, so that when the market turns you are prepared.
3. Customer Relationship Management
While lead generation is essential for business management, maintaining relationships is the key component to the success of your business. That means keeping in contact with all and any contacts on a consistent basis with quality communication. Ten years ago maintaining relationships might have meant calling your clients occasionally to check in with them, but now that is simply not enough. Technology has made it simultaneously harder and easier to keep in touch with people by making us more busy but also giving us tools to organize our busyness. Utilize CRM software to maintain your professional relationships. Use this technology to group clients, record their information, and keep track of how often you contact them to make sure that no one gets ignored.
4. Expand your Market Options
It is a good idea in general to have a specific or niche market that you specialize in or cater to in your business. However, in a slowing market, that specialization could cost you closings. Consider broadening your knowledge and focus to a wider range of potential clients. If you normally work with high end, expensive properties, think about working with some smaller residential homes. Increase the breadth of your local market knowledge. While the commission might not be as high, not limiting your range of potential clients in a slowing market could be the key to your success.
5. Save When you Can
If you are enjoying great success in a good market, that is fantastic! Enjoy that success, but remember also that the market can change at any time. Use some of the proceeds of your success to prepare for those dips in the market. Put away money specifically for a potential recession big or small. That way, even if you are doing less business, you will still be able to maintain expenses, including marketing. People tend to tighten corners and cut marketing costs when the economy slows, but if you have the cash to continue marketing, any advertising that you do will have a greater impact. Save now to save yourself later.
It might seem pessimistic to be preparing for a market recession before it happens, but really these are just good business practices. The best part is, if the market doesn’t take a turn for the worse in the near future, you will still improve and increase your business by utilizing some or all of these methods.