It’s listing season, and the word on the street — Main Street — is that inventory is down, and business is bubble-worthy. But are we really in a bubble? What does the data say?
Each market is different, and while we listen to the national news, our real estate market is, by and large, local. As real estate professionals, we must know, understand and be able to speak about the local market and how it may or may not be impacted by the national trends.
To better understand this, real estate agents should be able to answer the following questions:
- How much inventory is available? And how does that compare to 2019 and 2020?
- How many new listings taken have entered the market this year, as compared to 2019 and 2020?
- How many properties are pending? And what does that mean?
- How many properties have closed this year compared to 2019 and 2020?
- How does that look when you compare local versus national? (For example, in our Coldwell Banker Distinctive Properties’ traditional markets, new listings are down 19 percent, but up 37 percent in high-end resort properties. Although second homeowners typically also own a traditional property, they need to know about the local market in which their second home or resort property are located as well.)
- Can you answer the question: Why does that matter?
People move for a variety of reasons. What I have seen is that many agents are allowing their limiting beliefs to get in the way of serving the needs of their friends, families and communities. Are you buying what Main Street is selling? Or are you focused on what your consumers’ challenges are?
Let me give you an example. There are many reasons a family would move — job-related relocation, life stages, new needs, economic changes, family makeup, etc. When was the last time you called everyone on your list and asked them if they had any changes that would require them to buy or sell?
Let’s presume that 90 percent of the sales are being done by 50 percent of the Realtors (because we all know that there are some agents who rise to the top, and some who hang onto their licenses for that one or two deals a year). That means that the other 50 percent of the agents are doing 10 percent of the business. Wow!
With our current Realtor count at the highest level ever, 1.5 million Realtors, let’s do some math.
For example, there are 6.5 million homes sold by 1.5 million agents. Fifty percent of Realtors (750,000) do 90 percent of business (90 percent of 6.5 million is 5,850,000). If we divide 5,850,000 by 750,000 Realtors, the result is 7.8 sales per year.
An average home sale price of $350,000 multiplied by 7.8 sales would result in $2,730,000. A 2.5 percent commission on $2,730,000 would be $68,250.
In other words, to make $68,250 per year as a real estate professional, you must be at the top of your profession. I’m guessing you don’t work as hard as you do to make $68,000 a year?
So, how can you be at the top? How can you be the extraordinary, not the ordinary?
You need to start doing “the job.” You need to do the ordinary, extra, extra well. You need to put in extra effort and extra time. And because it’s listing season, here are six tips to help you be at the top of your industry.
1. Grab your phone
I know, you have a customer relationship management solution (CRM), but humor me. Grab your phone, and go to the bottom. What does it say? How many contacts do you have? Divide that by 44. That’s your daily number for the next 60 days. Yes, you can do the same for your CRM.
2. Start at the bottom
Start at the bottom, from Z to A. If you are like most people, you always start at the top, get distracted with all the business that you create, and rarely get past the letter M. Let’s change that.
3. Call them
Pick up the phone, and call them. Don’t email, text or send a video. Just call them, and say, “I know you’ve heard about the real estate market. I have to ask: Do you have any real estate sales or purchase plans this year?”
4. Then text
Once you go through that list, text them. Say something like, “Wow, the market is going crazy! Would you like to know what the new value of your home is?”
5. Use BombBomb
Once you go through the list, BombBomb them. Here’s what you can say: “Hey there, just checking in. I know you’ve been seeing what’s going on in the real estate market. I have to ask, if someone offered you the perfect price for your home, what would you do?”
6. Send a recorded CMA
Once you go through the list, send them a recorded CMA. I love this strategy. Use a program, such as BombBomb or Loom, and record your screen as you scroll through the assessors’ tax value, the current listings in the neighborhood, the recent sales, and yes, the CMA.
If you are really aggressive, you will do the math to show them what their net would be if they sold.
This is a contact sport, folks. Don’t find ways not to speak to them. Seek out ways and reasons to speak with them. Stop listening to Main Street, and start paying attention to your local numbers — and serve more clients.
Todd Conklin is the Chief Executive Officer at Coldwell Banker Distinctive Properties and CB Commercial Prime Properties with offices in Idaho, Montana, and Colorado. You can connect with Todd on LinkedIn, Istangram, or Facebook.