Real Estate Rules for Selling in a Recession

I’m sitting in my office January 2 wondering “What do agents in south Florida need for 2008?” I thought about writing about how to plan for the upcoming year and what strategies to use to ensure a successful 2008, but then I thought, by this time of year everyone is already doing there planning sessions, goal setting, activity plans and marketing budget so I don’t need to review that.

I thought more importantly for 2008 would be to provide you with an ongoing journal of what agents should do differently in 2008 from what they did in 2007 to ensure their success. I thought I’d offer you some techniques from similar past markets adjusted to work within the framework of today’s technology. I want you to know first and foremost that many of the answers you are looking for can be found in previous down market strategies. Although every market is unique, there are many similarities to days gone by. I believe the fundamentals of yesterday are not rendered obsolete by the technology of today.

You should concentrate on prospecting people who NEED to sell, not the ones who would “like” to sell. There are some homeowners who, if you are not careful, will take up too much of your time and if they are not serious, you can’t afford to waste your time. Don’t be afraid to ask the tough questions when interviewing with homeowners – just be sure to ask them in a nice way.

Develop systems to ensure you stay in consistent contact with FSBOs or Expireds. Search for Expireds back six month to a year – these are people who would be interested in talking to an agent now that some time has passed. Make it part of your routine to have a conversation with ten people every day about real estate, whether they are FSBO’s, Expireds, follow-ups after your open houses. Remember that if you talk to 10 people a day for 5 days a week you will talk to at least 2400 new opportunities each year. This does take discipline and persistence but just on sheer odds alone you are going to find new business opportunities.

I have experienced declining markets in my past, once as a salesperson, once as an office owner, and now again as a trainer and speaker. My history has taught me that after every overheated market is a declining market, then we enter a flat market which eventually warms up over a number of years and turns back into a hot market. This cycle continues to repeat itself and if you have the determination to stay in the market during these tough times, you will again see another hot hot hot market – Florida is much too vibrant not to bounce back better than before.

Real Estate Rules for Selling in a Recession

Most agents coming from the previous market sold homeowners on the idea that their investment would earn them a good “return”; that when they bought a property it would increase in value very quickly. In our present market you should sell “lifestyle” not return. You need to sell buyers on what it would be like to live and own the subject property, the amenities, the location and how wonderful it would be to call this home. If the question comes up about the declining market be sure to ask if they plan to sell within the next 6 months – if the answer is “yes” then this is not a good time for them to buy in most cases. If they plan to keep the property for a while, the value in the short range is not important. If anything, they can maximize their purchase in the mid to long-term as real estate always goes up and always stays ahead of inflation. They will have the benefit of a property they absolutely love at a much discounted price, along with the enjoyment of living where they want to and the piece of mind that house values will increase over time.

During the 1991 recession, real estate values fell by 40% in my hometown – it was very difficult to convince someone to buy a property that next month would be worth less than what they would have paid. However, once I realized that a buyer’s primary purpose was to purchase a place to live in and a place to raise and enjoy family and spend time with friends, then my business started to turn around. When other agents see problems because the world has changed, you need to see opportunities. This is the best time to be buying in south Florida and you need to make sure the world knows that!

  • Stay focused on finding saleable inventory
  • Use value range price positions
  • Will the seller pay any of the purchaser’s closing cost?
  • With every listing get a post-dated price reduction
  • Use an odd sale price
  • Ask for an above market commission rate
  • Insist on a full term listing
  • Provide easy access to the property (use lock boxes)
  • Have the seller pay to stage the house

The more the seller commits to, the more you know they are committed to selling. These items must be done with complete understanding and investment by the seller – the more they’re committed, the more likely there will be a successful outcome for all concerned.

Watch for my next column where I will cover marketing strategies of the heavy hitters.

Warmest Regards
Chris Leader
Master Trainer
Leader’s Edge Training
[email protected]

8 comments on “Real Estate Rules for Selling in a Recession”

  1. Beth Butler Reply

    Welcome Chris – i know you will inspire us all with your words of wisdom. I will work on that picture for you – its a bit askew. Thank you for your contribution.

  2. Norbert Machado Reply

    Hello Chris!!! I am glad that you will be blogging. Your input will be very helpful to our Associates.

  3. Caroline Carrara Reply

    Chris,
    Welcome!
    It is either time to sink or swim this 2008 and I am only allowing myself to see opportunity, one way or the other! Thanks for your advice and your encouragement!

  4. 3186666 Reply

    Thanks SO MUCH for the tips! They’re great and I’ll be referring back to them often. Looking forward to your next post!

  5. Payan Reply

    Nice to hear from you, Chris! We’ll be discussing your tips in our next sales meeting. Happy New Year!

  6. Marty Smetanka Reply

    Welcome Chris, Thanks for your blog. It’s got tons of good info. I’ll tell all my fellow associates to read it. Looking forward to a GREAT 2008! Thanks Again. Marty S.

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