Where do I start? Let’s talk about the big picture– the state of the real estate industry. Last week it was reported that sales of existing homes was at the lowest point in 14 years. Then two days later we learned that sales of new homes was at a 10 year low. It’s been less than a month since the National Association of REALTORS(R) said that their membership suffered the first year of negative growth in over a decade, down 7% from last year.
It seems that nearly every day we hear of another large national mortgage lender at the brink of failure or suffering a huge financial setback. Foreclosures are at an all time high and lenders are tightening requirements for borrowers. Those higher standards, of course, cause many would-be home buyers to either not qualify at all or to qualify for less, and that has a trickle down effect. Many institutional investors buy and sell mortgages and the high foreclosure rate has caused a crisis in the wholesale lending segment. Even the Federal Reserve board of governors just last week surprised the stock market by lowering the discount rate a half point instead of the expected quarter point. And that move prompted a growing number of professional investors to wonder what the Fed knows that we don’t know. Simply put, this year has been challenging for many agents.
We wanted to know exactly how widespread this problem is so we surveyed over 90,000 agents in our network and learned that the number one obstacle facing agents today (nearly three to one more than the next response) was economic factors ( 38.1%). Clearly it’s a tough time to be in the real estate business– or is it? I say it’s a GREAT time to be in the business of selling homes! “But hold on,” you’re no doubt asking yourself, “how can it be a great time to be in this business when the economy is clearly not cooperating? When agents are dropping like flies? When there are less and less people qualifying to purchase homes? When everything seems to be the bleakest?” I’ll tell you why. This is a natural pruning of our industry. Call it Darwin’s “natural selection” at work in the real estate world. And it’s a good thing. Let me explain it like this.
Every morning before dawn I endure a very slow six-mile run. One morning as I was running through a very nice area of town, I heard a dog bark. It wasn’t one of those “little dog” barks, but rather one of those bear-like dog barks. I turned to see a huge white chow that looked like a wolf running right at us. To say I was afraid is an understatement. I turned to my running partner and said whatever you do, don’t break stride and don’t look the dog in the eye. The dog ran up beside us so close we could feel his breath, barking ferociously. We never slowed down or even acknowledged the dog’s presence as we ran. After what seemed like an eternity, the dog eventually lost interest, turned around, and went back home.
We both breathed a huge sigh of relief that we were alive. Now I ask you a question: Suppose that dog had been intent on having having us for breakfast? Would I have had to out run the dog to survive? The answer is no. I would have only had to out run my friend! And so it is in this business. When times are tough, you don’t have to be the very best agent in town to survive. You don’t have to be better than the economy. You only have to be better than the weakest agents. Many of them will quickly drop by the wayside, leaving more and more market share to be enjoyed by those that are tough enough or smart enough to hang in there.
And how can you be sure you are one of those survivors? By having more customers than you can possibly handle. And at a time when many agents are struggling, they panic and do exactly the wrong thing. They quit marketing at the time they need their marketing the most. The winners are marketing more than ever before, but they’re doing it wisely. Survival of the fittest means working smarter, not working harder. Over the next few weeks I’ll be posting some marketing ideas that could make a real difference in your ability to weather the storm. If you have any questions, don’t hesitate to send me a quick email and I’ll gladly respond. I may actually quote your email and the response (not naming you if you prefer) so that it can benefit other agents who may be having the same question. Thank you for being a part of our FavoriteAgent.com community.
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Matt Jones is the founder and CEO of FavoriteAgent.com, nationally syndicated columnist, broker, and best selling author of LCM: The Secret to Success in the New Age of Real Estate, The Ultimate Listing Presentation, Traffic: How to Sell Fast and Net More, Becoming a Mega-Producer, The Science of Online Marketing, 10 Steps to Real Estate Success, 20 Questions: Everything You Always Wanted to Know about Real Estate but Were Afraid to Ask, The Virtual Office Model, Max-Bang!, and The NEW Ultimate Listing Presentation. Jones' North Carolina-based company has been profiled by major media outlets as an innovator and a pioneer in the industry, and CNN's Pulse on America claimed FavoriteAgent.com is "changing the way real estate is being done in America." This article is syndicated in the following locations: iTunes, YouTube, Stitcher Radio, BlogMattBlog.com, RealBlogging.com, NewsGeni.us, TheCommissionCheck.com, RevampedAgent.com, and now Amazon Kindle.