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There’s always something to howl about

Mindset

I was talking to a friend of mine who is a broker with a small “boutique” brokerage about the business recently and he told me that since it was pointless to list property in this market, he has focused his efforts on rental properties. He is “hanging in there”, waiting for the market to turn around. I was surprised by his position. He defended it vigorously. I get this all the time from friends who ask me how am I doing, fully expecting me to tell a sad tale.

Let me tell you a secret. People get used to everything. Even a recession, you ask? Yes, people  even get used to a recession. The secret is that there are still people who are securely employed, who have decided that with the interest at all-time lows and the prices down, now is a perfect time to buy. They barely even know that there is a recession. There are grandparents who want to get closer to their grandchildren ready to pay cash for a house. There are rich kids who just got married who are ready to spend Granddad’s money. There are people getting divorced, people inheriting homes they don’t want to live in, people letting their underwater homes go to foreclosure and then cashing out of their 401K and buying homes for cash at ½ the price of the one they let go. There are people buying homes in areas where the prevailing idea is that the market is dead. There are investors getting out of the stock market and into real estate. There are landlords increasing their holdings.

The other side of the secret is there are way less agents in the market competing for the buyers or the sellers.  The worst thing an agent can do is to buy the sad story. The fastest route to the poorhouse is to think it’s pointless to try. Yeah, there may be a lot of reasons to be depressed, but nothing will turn a buyer or a seller off more than an agent who seems depressed.

Well how do you find these buyers and sellers? Well the first step is to know that they are out there.  You can approach either side of the market (Buyer or Seller) or both.  Buyers are online. Get to the first page of Google for a competitive search term and you will know what I mean.

Buyers aren’t searching for an agent to represent them, they don’t think they need us. It may come as a shock but most people don’t think we bring anything to the transaction. Give them a way to search for property and they will let you know when they find something they want to look at.

Sellers are doing what they always did. They are looking for the neighborhood expert who is breaking into their consciousness. It could be the one mailing them every month. It could be the one with a neighborhood blog, or the one who comes to the community association meetings every month and who gets involved. A lot of folks have quit doing these things, so the ones still in that game are getting the prospects.  Those who can’t afford to mail, have to come up with another approach. Door knocking, cold calling, networking, calling SOI…. all of the tried and true methods still work and homes priced correctly still sell.

If you don’t believe me, go to your MLS and look at the solds for the last 12 months. I am willing to bet that there are more than you thought.

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  • 12 comments

    12 Comments so far

    1. Dylan Darling January 23rd, 2012 6:14 pm

      Agreed! Sales are up in Bend. And we’re seeeing lots of traditional sales again. The agents that mope around claiming that there isn’t any business out there need to get out now. The business is out there. Sure, our checks may not be as big, but there are plenty of sales out there. Those agents trying to break in, start blogging daily and give your buyers a place to search the MLS. Business will follow.

    2. Ken Brand January 23rd, 2012 6:59 pm

      Well said. Forget the past, step on the pedal. Cheers.

    3. Teri Lussier January 24th, 2012 6:03 am

      >go to your MLS and look at the solds for the last 12 months. I am willing to bet that there are more than you thought.

      I did that about 3 years ago and it straightened my attitude right up! :-)

      Having said that, I do think things have shifted and changed and it is important to adjust. Foreclosures, short sales, property management, seller financing, this is the Dayton market so I’d better know my stuff. I’m grateful to have a broker who is old school, has been in the business for decades, and has seen this before. To us newer Realtors the rug got yanked, but to him it’s just part of the cycle, so we learn how to expand our skill set and roll with it, it’s part of what makes this business so exciting!

    4. John January 24th, 2012 4:10 pm

      Great post Dan!

      We have focused our efforts to the internet to try and capture some of the plentiful buyers looking online. A great lesson learned from the military is to always adapt and overcome…

    5. Geordie Romer January 24th, 2012 6:36 pm

      I’m on the hunt for new listings that are interested in selling at today’s prices. In our market, probably someone who bought prior to 2005. We had our best year in 2011 and 2012 has been amazing so far.

      I like John’s comment about “adapting” – I think I might try and hire a few ex-Marines to help me grow my business this year.

    6. Dan Connolly January 24th, 2012 8:52 pm

      Part of my post was about adapting. There isn’t any question in my mind whatsoever that if you don’t adapt you will die. But the other message I was trying to convey is that you shouldn’t abandon everything you used to do and go full tilt into…lets say the foreclosure/short sale market only, because you will be missing valuable clients and opportunities that still exist in the regular ongoing eternal market that hasn’t changed at all.

      The idea some people have is that the only listing you want is the severely discounted distressed sale. That is not always true. There are still some sales at the top of the market, and that segment has been abandoned by most agents. The competition for foreclosures is fierce, and the competition for the top of the market is not. Believe it or not there are some buyers who don’t want to look at foreclosures or short sales because the don’t want to buy homes with “bad vibes”.

      Of course the sellers at the top of the market need to know that they have to be patient and understand that they may not be successful, but the secret is that some are. So I wouldn’t limit myself to only pre 2005 homes, I would be also looking at high quality, well maintained, beautifully decorated, solid, clean listings. Even if the “market” might think they are priced too high, there may be a buyer out there who doesn’t agree.

    7. Minerva January 26th, 2012 6:26 am

      I must agree, most people who are planning to buy a house are not really aware what a great thing it is to work with an agent first before jumping into a quick decision. :)And yes, a depressed agent who is selling a house or the one who is particularly negative considering the economy today can turn off a buyer easily.

    8. Jon Karlen January 26th, 2012 12:35 pm

      Love and support your position, Dan. No matter the market, there are going to be persons that need or want to buy/sell a home. Wish your friend the best of luck. Who knows – maybe he will become very successful with the niche. But operating from a position of fear, to abandon entire segments of the market, doesn’t generally bode well in the long run.

    9. Jim Wagoner January 28th, 2012 3:25 pm

      Great article. All of us in the industry long for ‘the good old days”, but they are gone and won’t return for a long time, if ever. We all have to adjust to the real world and make the most of it.

    10. Dave Barnes January 30th, 2012 10:43 am

      1. “there are way less agents in the market” which should be “…fewer agents…” unless you are chopping up agents into body parts.

      2. As someone who bought a house in the last few months, I see no reason for an agent on the buy side. Mine did a lot on the sell side and I paid her for that effort via commissions on both sides. But, on the buy side, she did nothing.

    11. Greg Swann January 30th, 2012 11:26 am

      Hey, Dave. Nice to see you.

      > But, on the buy side, she did nothing.

      Either you hired the wrong buyer’s agent or you negotiated the wrong compensation deal with her. Divorcing the sales commissions would have solved both problems. Since buyer representation is “free,” buyers tend not to read the fine print.

    12. Shondra Caldwell March 1st, 2012 11:45 am

      Great post Dan! Although we all would like to go back the pre-recession days, the fact is that the real estate business looks like it will stay this way for the foreseeable future. I believe that if you can adapt your business model to what customers are looking for and you are diligent in your efforts you can still make it in the real estate world. Just look in the right places- there are definitely people out there that still are interested in agents.