Monday, February 12, 2007

It's a Jungle Out There

As the company grows into new states, and accelerates the franchise program through area development, we have a fantastic opportunity to capture market share. While many traditional and sub-par players in the industry migrate out, SellSmart brokers and agents are in a prime position to pick up the pieces.We are all experiencing changes in the market, to one degree or another. For most of us, listings are taking longer to sell, and costing more to carry. Economists say that following an unsustainable boom in housing starts, sales and price appreciation, a period of “below-trend performance” is necessary to work off excess inventory, and to improve housing affordability. As the market adjusts - as is the norm in a cyclical industry - home pricing becomes more difficult as sellers still have unrealistic expectations, and buyers expect better deals. Traditional appraisal models rely on the past, and Internet models misrepresent home values with skewed results. Supply and demand does not stop at property inventories. There are too many licensed agents competing for business, and technology itself takes away much of the value that agents could tout in the past. Loan agents are getting into the real estate business as well, and winning consumers over to the “one-stop shop” model.

Perfect Opportunities

To make the most of these changes, take a look at the positive aspects of industry trends:
  • Mortgage Rates have been holding. This is great news for franchisees that offer loan services.
  • Sellers are getting more realistic on pricing, and also offering buyer and commission incentives.
  • Consumer education is much less of an uphill battle at this point.
  • Sellers are willing to pay for the help they need in this market. The opportunity is ripe for picking up FSBOs.
  • The Dow is at a high. Money doesn’t have to “trickle-down” too far before it’s spent on real estate.
  • Inventory selection is great, making it a good time to buy a home. It will be the most serious sellers who will attract these buyers.
  • As agents continue to leave the business, the spoils will go to the remaining few. Weeding out the unskilled is also beneficial to the reputation of the rest.
  • Most agents tend to reduce their marketing efforts during this type of market. This is your opportunity to step up your own marketing efforts and stand out - grab the consumer’s eye!

Fearless Action

As the market tightens, competition will become fierce. Those who survive will be the leading companies when the market turns. To conquer the jungle out there, you must take action:
  • Formulate a decisive plan. Take control of your business, your time, and your budget. Be willing to work harder, smarter, and longer.
  • Know the benefits of your program inside and out. Develop confidence through practice. Socialize yourself if necessary.
  • Become the expert. Educate your sellers, buyers, and agents. Share your knowledge and experience freely to develop trust and relationships.
  • Market, market, market. Do not cut back - in fact, kick it up a notch!
  • Maintain a good listing inventory. Find more cost-effective ways to carry listings, and make sure you get the right listings.
  • Analyze your fee structure. Would a percentage fee work better in your area? Should your fee be increased? Should you add a fee for specialized services?

This market is difficult, to be sure, but it also offers some great opportunities to come out ahead at the other end. Those who attended the SellSmart Safari convention witnessed the rollout of a variety of new programs and tools to help thrive and grow in this particular market:

  • Luxury Home Program - new marketing materials and sign art to capture this profitable sector;
  • Associate Manual - a training tool to assist you in orienting and developing your agent talent pool;
  • Property Management Division - new section in the Smart Suite, that will offer policies and procedures for your ancillary services;
  • Transaction Management - negotiated rates for an excellent software system that helps you work more efficiently and automates the reporting process;
  • Consumer Pamphlets - three new consumer reports that you can offer as a community expert, and can also be used as lead generators;
  • Five-Point Advantage Program - for serious sellers, a structured methodology for competing with other sellers;
  • Foreclosures/Short Sales - a great tool for obtaining supplemental income.
Best of all, this year, we didn’t have to burden our attendees with additional luggage on the plane trip home. Everything we introduced, improved, or explained, is available at the corporate website. The fun stuff from the Safari is here.

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