As a broker/owner and leader in my industry, I talk to agents in terms of reality, in terms of perception and in near future terms. This has been a tough 3 years for our industry, everything has changed and nothing that we know of our industry will be the same. The rules and the playing field have changed for the serious real estate agent. The foreclosure market, the unemployment market, the lending market is in turmoil. No one knows for sure were we are at. NAR states that we have hit the bottom and we are on our way to recovery. The Government states that we are recovering and that all figures are improving. Both of them are trying to paint a perception of recovery.
Yet, as I write this today, 14% of the nation homeownership is in default status, the highest ever. Prime loans have surpassed Sub-prime loans in default (no income, no jobs.) An official who heads one of the Short sale and REO divisions of Wells Fargo said that only 18% of modifications are approved. 70% of those approved return to default status again. They are getting a lot of pressure from the Government to keep people in their homes and prevent foreclosure. But what are you going to do when they have no income? We all agree their will be more foreclosures coming next year, possibly in the first part of next year....how soon and how much is the big mystery. That's the reality of it all. The recovery will not happen until we put people back on jobs and we sell all of the foreclosed, short sale and default non performing properties. And there is a lot of it. How much? A lot!
Short Sales will be a big factor in the next 2 years. Some areas have a shortage of inventory...especially below the $300,000 price range. What a strange market..., sellers do not what to sell...they are waiting for the values to go up.....and they also don't want to sell when they are unsure about their employment status....buyers to don't want to buy for the same reasons.....But at the same time, a lot of real estate sold this year...buyers bought and sellers sold....what type of transactions? For the most part, it was all first-time buyers. What did they buy....REO's and short sale properties? Being an REO Broker...I get multiple offers on all of my REO listings. A lot of real estate agents made more money this year than last year. I know, I have some of those agents in my office.
Agents ask themselves... What can I do, what can I focus on and what shall I do next year? Will I stay in business? The agents, brokers, owners and mangers who are left (I call them serious professionals who try to make a living as real estate agents in this market) have had a real challenge to be successful in this market that has never been faced in this magnitude before. We need to focus on the reality of the market and the reality of how we prospect and generate business in this changed market. Making sure we spent our time, money and resources in the areas that will make the biggest impact in our business.
Listings. For the most part a listing agent will always control their business and control their income. As a listing agent, if you have the inventory in any market you will be more in control of your business. By now, we all know focus on Short Sale listings right? Get a list of homeowners in default and make a commitment to visit homeowners about there options (this is still, and always will be, a contact sport). Banks are making the processing of short sales more streamline. Bond a strong business relationship with one of the major banks loan officers. They will be in control of a lot of short sale and REO business.
Social Networking. Join an organization, get involved in the community, it will probably do you good to get your mind off of this frustrating business and just enjoy yourself in organization or club of your choice. People in default are everywhere. Join a social network, become an expert of a neighborhood, association, city, etc. Talk to them about the default market, about options and tell them that you are just like them and you can help. People will start to open up to you if they know you as a person. Social networks like facebook for example work very well.
Open houses. It's a great to find leads and business....nosy neighbors are sometimes homeowners in default and just want to talk to someone about their options and they become seller leads. This helps you stock up on your qualified buyers, so that when the inventory starts to hit the market again....your ready.
Real Estate office. Be associated with an office that has a leadership that leads from the front and is looking to help their agents and the office by associating themselves with a stream of leads for this type of market. Is the leadership of your office optimistic about this market? Are they providing training and leadership and paving the way to succeed in this changed market. Are they giving the agents valuable "know how" and "valuable training" for this market. Are they providing "value added" training and sales meetings that will help you earn more business. Or are they wasting your time on house keeping topics. Does the office have the short sale and REO inventory that provides opportunities for open houses that will generate buyer and seller leads for the rest of the agents. Does your office have experienced and seasoned agents that you can learn from and who provide a positive atmosphere.
Invest in your profession. The business as we knew it is gone. We need to learn how to be a better consultant. Specialize and become an expert in a chosen field, like short sales, the senior market, probate sales, etc. Find a niche and a prospecting market. I have one very successful agent in my office that specializes it short sales. I have another that focus on homeowners with a lot of equity and "free & clear" properties. I have another that does nothing but open houses, like every other day. I have a team of two agents that specialize in the senior market. I have another who works her sphere of influences and gets a lot of referrals.
None of these suggestions are a quick fix. But if you focus on them...you will be in place to make contact with more people and close some deals. As little as they are, you will be one of the few closing deals. The volume and income levels will not be like they use to be.....but you will earn a good living. This market is for the agent that has chosen to be a real estate professional, earn a living helping people sellers and buyers. This is a profession that takes the stress out from their hands and into yours. The result, is a happy client for life....that's not an easy job. But that's why they pay you the big commissions. Not everyone can do this type of career. Unlike, the last waive of people who got their license for the sole purpose of making big commission and selling and buying homes for their family members and friends. If you have adjusted your expenses and standard of living....and are focusing on productive activities and being proactive...you will be ok. Remember, what ever prospecting system you chose to focus on now...will result in a positive outcome two to three months from now. If you are doing nothing, if your are waiting for the next waive of REO's to hit the market, waiting for financing to get easier or waiting for the government to drop a magic pill in the economy......then you will not have such a good outcome three months from now. I can guarantee you one thing; there will be a lot of properties selling next year and agents making a good income next year doing it. Do you want to be a part of it?
It's back to the old fashion reason to stay in real estate, the love of helping people in the most stressful part of their life. And for that, you get paid the big bucks and make a good living.