I am hearing loads of real estate seminars that are touting the theme "Back to basics!" This is a quick ploy to separate you from what little money you have left! It is very easy to pitch this scenario scenario to so many new agents in our industry that will not know the difference! The problem with a back to basics approach is that it just won't work! Are you going to re-work your sphere of influence? Pick a new neighborhood for a real estate farm? Get more listings? Cold calling? Mass mailings? Knocking doors? Dream on! How juvenile! This is not a normal market and by the time it is over will surpass the downsides that I saw in real estate in the 70's and 80's. In fact it already has. The magnitude of the banking crisis has not been rivaled since the 1930's! The difference in this real estate market is there are several external components that are impacting our business. This downturn is not localized to a single segment of industry, but has permeated our entire economy at some level of loss. Our economy is dealing with many fires that need to be put out, and we are at a point where we are really still waiting for the fire trucks to arrive! Here's the reality We have a credit crunch that is locking out buyers, sellers do not have an equity stake or have a negative equity position! We also have as a direct result of this, sub-primes and Alt-A foreclosures, declining home prices, no relocation traffic, huge listing inventory both new and resale, and rising fuel costs to name just a few. So when you think about it, where we should be heading mentally is where are the niches that money can still be made! That requires a lot of research, interpreting data, and crunching numbers!
Since the biggest group of real estate agents are most likely to make the same choices, the profits in that sector are going to be more competitive, and even a frenzy. So back to basics will have us moving in a wrong direction. Do you really want a lot more listings in this market, or would it make sense to go after qualified buyers, or develop a referral base? If you list a home, marketing time to sell a listing can be 6 months or more. That translates into higher marketing costs, more maintenance, fliers, open houses, mailings, ads, postage, marketing materials, and negotiations and maybe a closing. It is not uncommon to go through all of this, and have the buyer lose a job, the home not appraise due to declining home values, or the area that the home is in has been designated as a declining market value area, and the lender won't lend! This could be the straw that broke the camel's back!
We must sit back an analyze our markets with a magnifying glass!
Work only with qualified and motivated buyers.
Cultivate international and out of state buyers.
Look for cash buyers. What would be a great source?
Identify real deals in the market and be able to demonstrate their hidden values!
Work only with motivated sellers that can pay you what you are worth!
Price listings - to or below market value to sell!
We must research what we list - if condos are dead - list only single family homes!
Analyze sales - are 4 bed room homes selling better than 3 bedroom homes...
Determine - What price ranges are moving, which are not!
What concessions are being made on home sold?
What are the current absorption rates?
What is the current List Price / Sales Price Ratios?
What do the homes that are selling have in common? Why?
Reevaluate expenses and budget - trim overhead!
Re-focus web marketing
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For a lot of agents, back to basics means going back to whatever they were doing before the lure of real estate made them leave their dayjobs. A return to basics for some of those in our profession that were never really real estate professionals could be a very welcome thing! =)