Why Some Real Estate Agents are Thriving Right Now, Despite the Tough Market
There are two big differences between the real estate professionals who are doing it tough right now and those who are thriving, according to One Agency founder and CEO Paul Davies.“I know a lot of principals and agents are doing it tough right now.
But I also know, from speaking to One Agency licensees across New Zealand, that some are thriving. The two big differences are that their businesses are lean and their minds are sharp,” he said.
Mr Davies said that, on the business side of things, successful principals and agents regularly review expenses. They also look for lower-cost ways to achieve the same outcomes.
“For example, they’re renting premises in secondary locations rather than main streets, cancelling subscriptions they’re not using, outsourcing jobs rather than hiring staff to do them in-house, refinancing to lower-rate loans and switching from high-commission franchise groups to no-commission groups like One Agency,” he said.
In terms of mindset, Mr Davies has noticed that successful real estate professionals tend to be level-headed.
“They stay calm, no matter what the market and economy are doing. As a result, they make clever decisions,” he said.
Mr Davies urged principals and agents who are struggling right now to take action immediately, to stop smaller problems growing into larger ones.
“In an emergency, businesses often cut staff because that’s the fastest way to reduce costs. Unfortunately, it’s also the fastest way to reduce revenue, and so should be avoided if possible. If you make smaller cost savings today, you hopefully won’t need to make larger ones tomorrow,” he said.
Mr Davies also noted that when you’re in a desperate position, it becomes harder to win business, because it shows through in your body language during listing presentations. Furthermore, as your financial position deteriorates, so does your mental health.
“I’ve been in real estate for more than five decades, and have experienced a dizzying array of highs and lows during that time. But I’ve managed to survive – even though, at times, I’ve been close to the edge,” he said.
“That’s taught me the value of running a lean business, planning for the long-term and staying level-headed. If you’re doing it tough at the moment, I’d urge you to take action now, both to improve your current situation and to stop this problem recurring in the future.”
Focusing on the real estate fundamentals
Barry Rolton and Nicole Weber, from One Agency Your Place in Canterbury, are agent's doing well right now, with their current revenue exceeding that from 12 months ago. Mr Rolton pointed to three reasons for their consistent results.
First, their business has built a reputation over the years for being honest and putting clients first. “That generates strong testimonials and regular referrals, which helps you during weaker markets,” he said.
Second, Mr Rolton has worked hard at his scripts and dialogue throughout his 13-year career. “In this kind of market, order-takers don’t survive; you need to be able to sell the features of a home to buyers. At the same time, you need to be able to have hard conversations with vendors, because if you can’t convince them to price their home correctly and invest in marketing, you’ll struggle to attract buyers,” he said.
Third, after trying every sales strategy over the years, he’s learned the ‘price by negotiation over X’ strategy tends to work best. “You get honest feedback from buyers – not so much in terms of what they say, but how many people you get through the door. If we don’t attract anyone, we know our pricing is off.
Or if we do get lots of groups but we don’t get any offers, we know buyers see value in the area but not the specific home. The way you fix both problems is with a price adjustment,” he said.