Is Your Financial Situation Affecting The Way You Sell Real Estate?

By
Real Estate Agent with (512) 786-8300

Is your financial situation affecting how you run your real estate business? The answer, for most of us, is probably yes. It isn't necessarily a bad thing by the way. There are several ways a real estate professionals current financial status affects the way they conduct their real estate sales business. Some of those decisions may cause us to lose business, while some may make us more efficient.

Cutting Corners?

If you read or listen to opinion pieces regarding real estate sales, you would think each and every one of us, attempt to slam buyers into the most expensive houses, and tell sellers to slash prices; so that we can make a quick buck. Any of us who have been in this business, for any length of time, know that simply is not a fact. But we must be careful, not to fall in to little habits, that cause us to hurt our clients (if only a little) for our own financial gain. This could occur when we push buyers along, to overlook repair issues on an inspection. On the flip side of that, do we sometimes encourage our sellers to concede on ridiculous repairs to get the deal done? How about the agent speeds thru a walk thru, or doesn't suggest one altogether, so there is no risk to delaying that closing? After all, that car payment is looming, and we have to get that closing check.

Going In To Battle Unarmed

Let's face it, the real estate business requires some fairly expensive tools. A quick list would include: a nice automobile, a user friendly website, smart phone, mobile computing capability, pricey mls dues, business cards, decent clothing, and other miscellaneous costs. Sure, there are people who succeed with an old car that has been well taken care of. Or the agent that sees no need for a smart phone or computer of any type.  There are also athletes that don't run very fast or jump very high too, I just can't name too many. The fact is, there is a financial barrier to enter this business, and there is most certainly one to stay in it. Maintaining the requisite tools to be successful in this business is a financial investment we all have to make, even if it means cutting back on other things.

Financial Decisions Aren't Always Bad

When we ask how financial situations affect our business, there is a tendency to question our financial health. But the truth is, examining one's financial status is more likely to be a positive, if done correctly. A person who cannot afford to take on a client who will waste there time, is really deciding that their budget will not allow for such a cost. Some of us have arrived at the question of being able to afford an assistant. Upon further review, we may realize that we can't afford not to hire someone to help out. We may be literally losing thousands of dollars trying to not spend money.

 

We constantly seem to talk about dollars in regard to real estate. But rarely do we examine the state of our personal finances, and how it affects how we conduct business. Perhaps it should be a priority, as we prepare our business planning for 2012.

 

Posted by

Scott Hayes

Austin Real Estate Agency

Extraordinary Service, For Extraordinary People

Direct: 512-786-8300

www.austinrealestateagency.com

Comments (142)

Frank Iglesias
Working With Houses, LLC - Atlanta Real Estate Investments - Lawrenceville, GA
Atlanta, GA Real Estate Investor

ALways a delicate balancing act!

Dec 14, 2011 04:50 PM
Jacqueline Drake CRS
Jacqueline Drake Realty - Saint David, AZ
Southeast Arizona land, farms & horse properties

I haven't cut back on advertising though I do track the inquiries and won't hesitate to discontinue any advertising that does not work. I am fortunate that I am not pressured to sell so my business model has not changed. I believe in putting my clients needs first and treating them as I would want to be treated. There are many agents who have cut back on advertising which I think is a mistake.

Jacqueline Drake CRS

Cochise County AZ

Dec 14, 2011 05:11 PM
Jairo Arreola #SOLDBYVETERAN
PRG Real Estate - San Jose, CA
VA Home Loan Specialist - SF Bay Area

Taking care of my clients and putting them in the best situation is my priority. I am in this business for the long run, so if my clients see that I am looking out for them, hopefully they can recommend someone.

Dec 14, 2011 07:18 PM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

We do need to make decisions about whether to work with a client or not. Some clients are not serious, or ready to purchase a property, or on the flip side, some are not motivated to sell their home in this market. When I first got into the business, I would work with anyone, but now I prequalify first. Hiring an assistant was an expense I couldn't not afford and it makes my life so much easier!

Dec 15, 2011 12:10 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

Seems there are a lot of agents out there that will work with any property and any customer regardless of how marginal they are because the agent has no other business. 

Dec 15, 2011 12:58 AM
Jamie King
Hoty Enterprises, Inc. - Huron, OH
Sandusky, OH

Good post, Scott. I liked your analogy with the athlete. Made me think!!!

Dec 15, 2011 01:16 AM
Ken Anderson
Apex Results Realty Inc., Brokerage - Burlington, ON
Broker in Burlington, Ontario

This LEAN and MEAN!  Treating clients well first and foremost is the CHEAPEST  way to get new business!  Client referrals and good words about you are better than any tools or advertising you could use.  Having the best tools is a moot point, I think.  Being able to adroitly use the tools that you DO have is far, far more important and efficient in gaining new business.  Tracking mediums that you use, eliminating ineffective ones, augmenting ones that are working and inventing new slants to gain recognition are practices that you must perform continuously, no matter what the market is doing, or how well you are personally doing.  Remember, no advertising will get you better recognition than advertising your clients' products.  Some agents do these things when income is thin, and forget about it when things are rolling okay.  Bad business!  Pretty soon you'll be in a slump again.  Recognize what is right, use the tools you have effectively, seek venues where you can replace money with effort, knowledge, and/or time.  LEARN CONSTANTLY!  Plan your work, and work your plan!  Happy selling and Merry Christmas!

Dec 15, 2011 01:42 AM
Charlotte East Window Treatments Shutters Shades Drapery Blinds
Green Country Shutters - Big Cabin, OK

Great article!  We could all use a little self exam as we go into the new year.

Dec 15, 2011 06:11 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Good topic, Scott. For me the focus is keeping a good handle on expenses and managing that aspect. I don't push clients regarding their buying decisions so that's never an issue for me.

Dec 15, 2011 11:01 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Scott, yes it was until this year.  And interesting once it no longer drove it my business took off!

Dec 15, 2011 11:34 AM
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

Great overall advice but realtors are really suckers for the next shiny metal object that comes along! I really don't think that it's 100% necessary to have access to anything in your car. I make appointments & rarely do I ever have to immediately have to get on the computer for anything. If I was 'just driving around' my buyers like a chauffeur I can see popping up a few homes on the computer so I can act like I'm playing taxi ......  Doesn't make much business sense to me.

Dec 15, 2011 11:37 AM
Judi Monday
RE/MAX Valley Properties - Green Valley, AZ
CRS-Green Valley AZ Expert, Green Valley Arizona R

A wise person told me a long time ago to do the right thing and the money will follow.  That has been my mantra since I entered this business and so it shall be for 2012.

Dec 15, 2011 12:04 PM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Sure we all need money and there is no question about that. But letting that "need" be the driving force of our sales at the buyer or seller's peril is unconscionable.  Over the years, I've only had one agent to say to me "I really need to get that check."  I remember thinking at the time:  does she really think it's okay to say that?"  I guess she thought I felt the same way. We had several issues to resolve during that transaction, but I wasn't willing to roll my buyer under the bus to get it done.

You posed a question Scott that we really need to periodically ask ourselves and evaluate our motives.

Dec 15, 2011 10:23 PM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Scott, I come from a management position and corporate background. We always spent money on training and personal development for our staff. Our sales goals were based on a marketing budget. I understand that you must spend money to make money, and I'm glad I knew that coming into the business 9 years ago.

Dec 16, 2011 04:48 AM
Jamie R. Bell
Bell Realty Group at Berkshire Hathaway HomeServices NEP - Glastonbury, CT
Your Central CT Realtor

Scott, nice post and so very true! I agree we sometime cut costs but it can also be called working effectively & efficiently.

Here's to a great 2012!

Dec 16, 2011 10:47 AM
Nina Rogoff
RE/MAX Executive Realty - Medfield, MA
Sells Real Estate!

You're right, Scott. Having to look at the financials can help us with planning and with making better business decisions. Some of those decisions may be about what we spend our money on and some may be about which clients we accept. Pretty much the same in any business, but as real estate agents we have to remember there are no shareholders pressuring us for good results. We have to do that job, too!

 

Dec 17, 2011 08:15 PM
Dave Miller
RE/MAX Integrity, Dumont, NJ 201-385-8100 - Dumont, NJ
RE/MAX Real Estate Dumont,NJ - Bergen County, New Jersey Homes for Sale

 

I think the more successful we are, the better advise we can give.

'He has that lean & hungry look, I trust him not'  Shakespeare

Dec 18, 2011 01:59 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Scott, I came from the reblog by Winston. Excellent blog. I was thinking of "suggesting" it, but I was a bit slow (lol). Very good points. I am fighting with the assistant idea and I am going through it right now.

Thanks

Dec 22, 2011 05:05 PM
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

I think there is a lot to know when running your own business. This is not a sales job but a sales business. We need to act like it.

Dec 22, 2011 05:05 PM
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

Scott, well written post, and an intriguing topic.  I can tell you that back in 2007, when I hit bottom, I made a commitment to never let my desperation for money affect negotiations or my representation.  Even though I had lost just about everything, and was on my last time (oftentimes literally), I negotiated HARD for my clients, never gave a "wink and nudge" to the other Realtor to just get a deal done, and always represented my clients best interests.  I had to advise clients to walk away from deals, though I desperately needed the money, because it was just the right thing to do.

However, one way I did let my desperation affect me was in the hours I worked.  I knuckled down, buckled down, and did what I had to do to survive, and eventually thrive.  Thankfully today I am on pace for my best volume sales in a decade, and I'm back fixing and flipping houses again, something that was way off the radar 4-5 years ago.  Today, I'm smarter, leaner, and more conservative with my investments...in an attempt to avoid the disaster that was 2007 (and part of '08). 

So, yes, I agree. In some ways, we should let our financial situation affect us, but it should never spill over into pressuring clients into doing a deal because we desperately need a commission.  I know all realtors would SAY that, but I know far too many who operate their businesses contrary to that principle.  Woops, sorry for the long comment.

Jul 12, 2012 06:28 AM

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