9 Tips for Navigating Your Business in a Changing Economy

9 Tips for Navigating Your Business in a Changing Economy

By John Giffen

As published in Inman News on May 3, 2020

Our national and global economies are in the process of re-opening after an unprecedented period of self-quarantining, devastating business, school and institutional closures, record unemployment, and restricted air travel as a result of the COVID-19 coronavirus. (I am still reeling from my canceled 10-day vacation in mid-May to the U.K., but I digress.).  Throughout the country, people are eager to get back to work and make a living. Our economy cannot sustain itself if people are not working, including real estate professionals.

As we move into the next “chapter” in this pandemic, agents and brokers must be prepared to work smarter and harder than ever before.  Real estate markets throughout the United States and Canada are seeing fluctuations in consumer demand as well as dealing with home inventories that remain tight.  So, how does an agent effectively operate their business moving into the summer and fall?  The answer is simple – know your value and your worth.

One essential component of your real estate practice is your unique value proposition.  Your value proposition is what sets you apart from the competition.  It is probably the most critical element of selling real estate, especially as the market continues to evolve and adapt to the impact of the COVID-19 virus.  You must be “clear as a bell” when conveying the benefits to a prospective client who is considering working with you or your team in meeting their real estate needs. 

During several recent Zoom meetings with agents in my company’s seven offices in Middle Tennessee, I spoke about how an agent can “stand out in the crowd” when discussing their value proposition to potential clients.  The following are some of the ideas I shared in those meetings:

1.  Recognize the changing economy will impact our industry.  I believe we are experiencing (or soon will be) a paradigm shift in how agents and brokers will be marketing and selling homes, overseeing transactions and working with prospects and clients.  Since the recovery after the “Great Recession” of 2008, we experienced more than ten plus years of what I like to call “low-hanging fruit selling” in residential real estate.  National, state and local economies, for the most part, was healthy, and jobs were plentiful before the coronavirus hit.  The demand for single-family residential homes and other types of real estate was strong for those moving across town or to another part of the country.  As a result of this prosperous time, the real estate industry experienced tremendous growth year after year.  The coronavirus is slowing this growth, and we are now living in a new reality of an economy in – or soon to be in – a recession.

There is good news and bad news.  Let me start with the bad news first.  The current economic environment is one that none of us could have forecasted three months ago.  State unemployment claims are at record highs, and small businesses, the backbone of our economy, are struggling – if not closing – as a result of little to no revenue.  Large corporations are laying off workers, cutting stock dividends, and suspending contributions to employee retirement accounts. For many Americans, it is a very difficult time.

The COVID-19 epidemic is now affecting consumer confidence to its core. Even with the country emerging from home quarantine and assimilating back to somewhat regular routines, it could be several months before our confidence to eat out, shop in stores, and gather at sporting events will be at levels similar to what it was before the outbreak.  Businesses create jobs, which, in turn, creates income leading to a consumer’s confidence in their ability to purchase or sell a home.  Real estate is a foundational component of our economy and is dependent on consumer confidence.  Until buyers and sellers feel secure in their employment and know the economy has stabilized, the real estate industry in many parts of the country will be impacted by buyers and sellers waiting to “pull the trigger” to purchase or sell a home. 

Now, the good news.  A large number of buyers and sellers will need to relocate due to a job change or upsizing/downsizing as they enter a new season of their lives. We will continue to see new property listings and buyers purchasing available property listings, but probably not at the pre-COVID-19 level until a vaccine for this disease is discovered and mass distributed to the population.  All of us will have to understand and adapt to this new situation in which we find ourselves. There still is business out there for those of us are willing to work hard and know how to hunt for it.  Even during previous recessionary times, properties were bought and sold by those who needed a roof over their head.  That will continue.

2. Be a valued and trusted real estate consultant.  As a real estate professional, you are a consultant, not a salesperson. I believe showing your ability to provide guidance and direction for the real estate consumer is more important now than ever before.  In your efforts to procure a new listing or a new buyer in the next few months, you need to represent yourself as someone a prospective client can value and trust, and providing them with advice and wise counsel through the entire real estate transaction process. You are the expert who can find solutions in the current market and guide clients from start to finish in the real estate transaction experience. You have the know-how to address most situations that arise in a transaction.  In addition, you should always come across as non-threatening and easy-going. Be natural in how you relate to the prospect, but be professional in your presentation.  Your knowledge and skill can serve you well in sustaining your business for the remainder of 2020.

3.  Know your market data.  There has never been a more critical time to know your local real estate market statistics and trends. I cannot overstress the importance of agents’ familiarity with what is selling and what is not in their local real estate market amid the fallout from COVID-19 and the economic slowdown in which we find ourselves. Clients will turn to you for information on how the current housing market is performing. You should be well versed in areas of your city, county, and region that are selling well right now, as well as the other areas that are underperforming. Be well informed on sold property trends during the last couple of months compared to the previous year and the direction the market is heading. A good agent will know absorption rates, current property tax rates and impact fees, and the latest new construction projects and proposed residential developments that are still on track or delayed as a result of the pandemic.

4.  Keep the needs of your client FIRST!  The National Association of REALTORS® Code of Ethics and Standards of Practice underlying foundation comes from the Golden Rule: “Do unto others as you would have them do unto you.” I know money is tight right now for a large number of agents and brokers and bills need to be paid.  There may be times in the days ahead when you might want to focus more on the commission check at the end of a transaction than taking care of the needs of the client.  However, ALWAYS remember to put your client FIRST in everything you do. You must continue to provide wise and accurate counsel to your client and make decisions based on how it will assist them instead of benefiting you financially.  You have a fiduciary responsibility to your client and they are expecting you to give your best to advocate, negotiate, and mediate for them in a transaction.

5.  Leverage your professional expertise.  I wrote in previous Inman columns and also in my book – “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success”- the most successful real estate professionals are those who know the real estate market up, down, backward, and forwards. They know their communities, current market statistics, and trends, and they are outstanding negotiators.  Also, these pros are excellent at managing their clients and transactions as well as working with cooperating agents. Agents making six-figure incomes are those who can provide valuable advice and insight to their prospects and clients. They can guide their clients with ease through the confusing and ever-changing world of real estate.

Every real estate agent’s aspiration should be to possess a character rooted in professionalism and integrity with a commitment to expertise in their industry.  This has never been truer now as we sell real estate with the coronavirus hovering around us.  We know more about how to market a property, seek out the right home for buyers, and manage the “contract to close” process better than anyone else.  We are the experts, and we should never forget it!

6. Communicate, communicate, communicate!  The absence of good and clear communication with a buyer or seller client has always been the number one complaint consumers have

relating to their home-buying or home-selling experience.  One of the most critical expectations you need to set with your clients at the beginning of the relationship is explaining how you will communicate with them.  The coronavirus is making everyone a little more anxious than normal.  For sellers, you can help ease their angst by keeping them informed of showing activity, feedback from prospective buyers, market conditions, sales of comparable properties, etc.  Buyers will want their agents to clearly explain how you plan on showing them prospective homes as well as informing them on how inspections, appraisals, and closing a transaction are handled during social distancing restrictions that may still be in place.  Communicate more now that you have in the past.  Over-communication is something that should not be considered a negative for a real estate agent – particularly now.

7.  Defend your compensation!  To be successful in this industry, you have to believe in two

things: yourself and the value of the services you provide a buyer or seller.  Real estate transactions are complex and require a tremendous amount of time, energy, and money on the part of the professional agent.  Discounting broker commission impacts the bottom-line of your business and can cause irreparable harm to your reputation.  Do not become a “bottom-feeder” agent who gives their time and services away while other competing agents in the market are working hard to maintain a reputation of integrity and professionalism.

Remind the client you earn your living selling real estate, and your real estate practice operates as a small business.  There are expenses in every business – including a real estate practice. You are not on a salary but are paid at the end of the transaction for all of your hard work.  The value you bring to the client/agent relationship is worth every penny you charge – if not more!  Trust me, working in a changing real estate market will require more effort on your part.  And, that effort has a cost associated with it.  Prospecting, managing listings and sales contracts, and taking care of client needs will require additional time and attention.

8.  Be willing to go “the extra mile!”  Real estate is a relationship business.  It always has been and, in my opinion, it always will be.   Let me give you a couple of examples for you to consider.

Over the past six weeks, I have encouraged agents and brokers in our company to make themselves available to clients by assisting them with any particular need they might have during self-quarantine.  Delivery groceries, picking up prescriptions, assisting with errands, lawn care, child care, and other “acts of kindness” are ways to show we are willing to help – no matter what!  That “extra mile” effort needs to continue as you manage your business this summer and beyond.  There may still be folks who are not willing to be ready to get “back to normal” or are recovering from COVID-19.  Just make sure you are there for them now so they can remember you down the road when a real estate need arises, or they come across someone they know who needs your services.

You may not need to deliver groceries or prescriptions as the economy opens back up, but you do need to be willing to work with clients in ways you never imagined until now.  For example, if a seller is concerned about buyers and their agents possibly carrying the COVID-19 virus, you should be willing to do whatever it takes to keep your client feeling comfortable about showings.  You will want to implement virtual showings or in-person showings where you are present to ensure only one or two people with PPE (Personal Protective Equipment) masks, gloves, and booties are allowed inside the property.  You should also be willing to sanitize any surface a buyer and their agent touches while touring the house or provide buyer agents with instructions on sanitizing surfaces prior to exiting the home.  Continue this protection throughout the listing, “contract-to-close” period, and to the closing table.  Your client will remember how well you looked out for their health and their interests.

Part of your value proposition should include your willingness to do whatever it takes to keep your client happy and satisfied.  Going the “extra mile” does pay off in the end.

9. Don’t give up!  Perseverance is something we all need to do as we deal with the coronavirus.  General George Patton, who my late father served under in Germany during World War II, once said, “In case of doubt, push on just a little further and then keep on pushing.”  Our success from this point forward will be dependent on our motivation to “press ahead” in the face of an unknown economy and a virus that may be around longer than we think.  No matter what lies ahead, we must not give up, but “charge forward” and build on the successes of our past.  As I previously noted, there is business for those who persevere and work hard to help those who need our experience and expertise.

Real estate is a vital part of our nation’s economy.  Real estate professionals will continue to serve as the “stewards of the land and all that is on it.”  We have faced adversity before in this business.  We can face it again.

John Giffen is Director of Broker Operations for Benchmark Realty, LLC in Franklin, Tennessee.  He is the author of “Do You Have a Minute? An Award-Winning Real Estate Managing Broker Reveals Keys for Industry Success.”

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