The real estate industry was on fire in 2020. Record low mortgage rates and relocations due to the new work-from-anywhere climate led to more buyer demand, which brought home prices even higher.
Sounds like good for business, right? Well, it was.
But listing inventory remains low, with less than 500,000 homes for sale, according to Todd Teta, chief product officer at Attom Data Solutions. The supply-and-demand factor will increase home prices even more, which is great for sellers, and at the same time, could price many buyers out of the market.
The name of the game in 2021 is going to be inventory — a conversation that shouldn’t be new to any of us in the real estate industry. Those who control the inventory, control the market.
Our company is coming at this challenge from three angles:
- Focusing the conversation on listings
- The three pillars of prospecting success
- Building our own inventory
If listings are the focus for your business, then everything needs to be about listings. Our team is eating, breathing and dreaming about listings. Every conversation, every additional training and every script practice is about listings.
Rally around a common goal
We are all rallied around this common goal. Make it fun and interactive, from partnering up agents to get listings together to creating friendly competition and prizes for the agent with the most listings, bragging rights for the most expensive listing, or a trophy for the agent who landed the smallest listing.
In addition to creating a ton of energy, focus and conversations around listings, create your sprint goal. For the next 90 days, get crystal clear on the number of listings you want to land, the geographic area you want to target, etc. Track your results daily, and weekly and make sure to share those numbers with your team.
Every day our operations team sends out a scorecard that lists who secured a listing, along with the listing price. It definitely fosters friendly competition and keeps the listing conversation top-of-mind.
Prospect the right way
Next, let’s break down the three pillars of prospecting success: frequency, skill and number of contacts.
How often are you lead generating and prospecting for new business? Do you have a daily lead generation routine? Our team employs a 15-3-1 strategy. We start with 15 minutes of script practice, followed by 3 hours of lead generation, with the goal of at least one appointment a day. What will your number of hours be?
Real estate is an ever-evolving industry, and you must take your training into your own hands and go beyond the required continuing education credits.
Are you practicing scripts? Learning about the latest technology tools to help with lead follow-up? Jumping onto the newest social media platform to provide value to your potential clients where they are hanging out? Are you learning negotiation tactics? Keeping up to date on real estate trends, market statistics, and the economy to share that knowledge with your prospects?
This is where the great real estate agents start to pull away from the pack. Your output is only as good as your input. How many hours a week will you commit to honing your skills?
3. Number of contacts
Prospecting is a long game. Contacts (people you actually make contact with) are how you build your database and pipeline for future business. These are the people you connect with today, who, if nurtured correctly, will be your clients in the future.
Focusing on the number of contacts isn’t always gratifying — it’s not an appointment or contract. But our team likes to track this number on a per agent basis, as it is a leading indicator for potential agent income, as well as projected company profit.
You can make contacts through a lot of different avenues — FSBOs, expireds, SOI, referrals, internet leads and more. But make the dials, and don’t stop until you’ve hit your contact goal (we recommend at least 20 contacts a day). What is your number going to be?
If the three pillars of prospecting success are frequency, skill and number of contacts, then the foundation on which all three pillars are resting on is time on task. Success will not happen without putting in the hours, staying in the saddle and getting it done.
This means committing to a daily lead generation habit, committing to honing your skills every week and committing to hitting a certain number of contacts each week based on your overall goals. Remember, always bring it down to a measurable number.
Consider new construction
In addition to our company focusing on frequency, skill and number of contacts for listing leads, we are also building our own inventory. Building new homes is one way to help with the listing inventory shortage.
Now, I don’t say this lightly. Residential real estate construction is a whole other animal and should not be entered into without the proper knowledge, sufficient capital, and experienced project managers and developers. We have owned a construction company for eight years, so we are in a good position to take advantage of the opportunity now.
However, you don’t have to own or start a construction company to reap the benefits of creating listing inventory. Partnering with a local builder is a fantastic way to control the listing inventory in your market. Instead of a single listing, you have the potential to list 10, 50 or hundreds of homes.
Now, this is a longer term play, as a 50-unit development could take a few years to build out. But, depending on how you negotiate with your local builder, you may get paid upon contract signing. Even if you don’t, knowing you have years of commission coming your way isn’t a bad thing.
As you gear up for a successful 2021, considering turning some attention to listings. Rallying everyone around the listing conversation, getting laser focused on prospecting (and tracking your number of hours and contacts) and partnering with a builder are three viable strategies to take control of your market this month and beyond.
Adam Hergenrother is the founder and CEO of Adam Hergenrother Companies, the author of The Founder & The Force Multiplier, and the host of the podcast, Business Meets Spirituality. Learn more about Adam’s holistic approach to business here.