What advice would you give to an agent who is anxious about the state of the market?
There are always going to be great markets where it's easy to do business, and challenging markets where it takes more effort. Business is a cycle, and that’s not going to change.
Sometimes the challenges are related to world events, and sometimes they are local. Whether it’s a seller’s market, a buyer’s market or a balanced market, there are always people who need to buy and sell real estate. If you focus on your skills, your business and your area, you can make a plan to balance out the cycle to create better results for your clients and a more stable income for yourself.
Make a plan that sets out your financial goals for the year. If you have not done this at the beginning of the year, or your plan isn’t working out the way you thought it would, do it now. Figure out the income you need to earn in order to live – pay your bills, feed your family and earn the standard of living that you're hoping to achieve through selling real estate, then you focus on that plan.
What are some pointers you would give them along the way – maybe “focus on this, don't focus on this too much?” Do you have any sort of priorities list?
Creating your plan is the first priority. Your managing broker will provide a template for you to use to figure out your goals for the year, or you can find sample plans online. Keep good statistics on yourself and your success ratios. How many listing appointments do you need to do in order to earn a listing? How many buyers do you need to work with? How quickly do your listings sell? How many properties do you show your buyers before they buy? When do I need to take professional upgrading and mandatory relicensing courses? How much time do I need for exercise, family, hobbies, etc.?
If you haven’t got a clue about your stats, think back on what you have done, and then start trying to track things going forward. Or, take a look at overall market stats in your area. Then, take into account what is happening differently in the market this year. For example, if you were able to generate three listings for every five listing appointments, but you’re finding your ratio is dropping to two for every five presentations, you’ll need to do more listing presentations.
If your well-priced listings are taking longer to sell, you might need to reassess your advertising budget and campaign. In a more challenging market, it’s tempting to cut back on advertising, especially if you’re not feeling confident about when your next sale might be. But now is the time to allocate more funds to well-placed advertising.
In a challenging market, you also might need to add a few new activities and tools to your activities tool kit. Activities that worked well for you in the past might not give you the same results. You’ll need to work a little bit harder and try things that might not be your favourite activities. Let’s imagine you have six tools in your real estate tool kit: open houses, social media posts, networking with other agents, calling past clients, door knocking and mail campaigns, for example (there are a lot more choices!). But you’ve only been using two of them, because they feel comfortable and easy and get the job done.
Now is the time to pull out those unused tools, and ask colleagues what works for them. As the market changes, or your business changes, they might start working for you now. If it's something you don't enjoy doing, be brave, and give it a try. Like anything, you’ll get better with practice, and will have more tools to fall back on when you need them.
It seems that a lot of agents may be used to a lot of volume. How would you guide them through the shift in mindset – to focus on quality over quantity?
Get back to basics, and try out other activities and tools. When I started my career, I had a really great managing broker, and we had weekly mandatory training. Whatever training they told me to do – whether it was phoning people that I knew or door knocking or putting it out in the newspaper to promote myself – whatever it was, I just did it all.
During my career, some of my agents have asked me a question, something along the lines of – I'm going to paraphrase a little bit – “you know, Janet, you do a lot of business, but you don't really seem like a typical agent to me. How are you able to do so much business? What’s your secret?” My response is two-fold. First, when I started out, I didn't know any differently. Whatever activities I was told to do, I went out and did them.
Second, because I'd always had a job before, with set work hours, I thought, “if I'm gonna make a career out of it, then I'm going to need to work 35 or 40 hours a week.” But, in the beginning, and during challenging markets, I needed to work more hours a week to generate the same result in a challenging market.
Basically, I just saw my career as something that I needed to put the same kind of time and effort into as if somebody had hired me and expected me to show up and work. So it's just really simple stuff: get back to the basics and be prepared to work. If you work hard for about three years, you’ll start to receive referral business, and you may not need to work as many hours to reach your goals. But, keep doing the basics, and that will help out the business cycle for you.
There are always people that need to buy and sell property – whether their life situation changes, if they have to move for work or their house is too big for them and they want to downsize – whatever the reasons are, there's always a need for an agent. There's always some business out there; it's a matter of figuring out what you need to do to try to tap into it.
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Finding those niche markets is important. A well-priced listing in a popular neighbourhood at the price range that more people can afford, is still selling well.
Janet Scotland
Managing Broker at REW Realty.
One of the things that we should unpack a little further for our agents is the pricing conversation, because they might meet clients who are expecting a price that was realistic maybe five years ago, but it's not anymore. Do you have any advice for that conversation?
Correct pricing is always important. It can be a difficult conversation, for sure, but preparation and practice helps. Sometimes, when prices are in a downturn, an agent may go for a listing presentation and present accurate information to the seller about the pricing. Then the seller has another agent come in, who will accept whatever pricing the seller wants, even if it is too high. The property sells a while later, maybe there are several price reductions, and the property finally sells at the original agent’s price recommendation, or perhaps even lower. The first agent thinks they did the groundwork of being realistic about the price, and may be tempted to take overpriced listings in the future.
But, it's always better to be honest with the sellers. Once you show them the comparables, if they think your price range is too low, do a second market analysis based on their expectations. If you don’t know their expectations beforehand, do the second analysis right then. Most sellers are able to see the differences between their own property and the ones that have sold for higher prices. They can see that their house does not have the same features as the higher-priced comparables, and has more in common with your recommendations. You might change your mind based on their feedback. In the end, you'd never need to disrespect their property; just show them the facts. In my experience, sellers appreciate that you've gone that extra step – that you are listening to them and that you have the knowledge and the expertise they'd be looking for.
If you’re nervous about dealing with price resistance, you can practice with a colleague or a friend or family member. Role playing can be really valuable. Ask someone you feel comfortable with if you can do a practice market analysis and listing presentation with them, and ask them for their honest feedback.
What advice do you have for agents on handling their finances in markets like these?
Again, a lot of it comes down to planning as much as possible. For agents who've been in the business for around five years, they’ve likely had some pretty good years and hopefully they’ve put aside some savings.
Part of the planning I talked about earlier involves saving. Set aside a percentage of every sale with the goal of building up your savings to cover at least six months of your expenses. Not just your own personal living expenses, but your business related expenses, too. When the market shifts, you don’t want to be forced to cut back on your living expenses, or your investment in your business, such as advertising or your plans to promote yourself.
Some agents may be tempted to take on a second job. That takes away your focus and takes away your time from concentrating on your real estate business. To do the very best job for your clients, whether buyers or sellers, you need to be focused on getting the best result for them. It's not just about you and your income and your career, you also have your fiduciary duties to your sellers to try to do whatever you can to get their place sold, and to your buyers, to be able to help them find the right property. Talk to your managing broker if you’re considering a second job. They’ll likely have some good strategies to help you stay focused on your real estate career.
Much of Greater Vancouver has entered into buyer's market territory. Do you have advice for agents in this scenario?
The funny thing about the market right now, while most are saying it's a buyer's market, there are still a lot of properties that are selling with multiple offers. This market seems to be more hyper-focused. Finding those niche markets is important. A well-priced listing in a popular neighbourhood at the price range that more people can afford, is still selling well. For example, a one-bedroom condo under $600,000 in Downtown Vancouver is probably going to get a lot of people looking at it, even though condo sales overall have gone down.
Here on Vancouver Island, I was talking to an agent the other day, and she wanted to show a new listing for a $2.4 million oceanfront property – that's a high-end property for the North Island. But it was already sold. Her client wasn't the only one waiting for that perfect oceanfront $2.4 million property.
Even though there are a lot of listings out there, there are a few types and price ranges that are more popular. Buyers are watching and waiting for those listings, and they are selling strongly. It's quite different from the buyer’s market of 2012. Back then there could be 20 or 30 properties that met your buyer's criteria, and you could show them 20 or 30 places, and they could have their pick. But now it seems like there may only be a half-dozen properties that your buyer and a whole bunch of other buyers are interested in.
Look for listings in those niche areas that are still very active, and help your buyers to reassess their needs and maybe consider properties that might not be perfect, but will help them to enter the market and take advantage of the expanded available listings.
