Focus on the problems you can solve.
Being in the real estate business since 2006, I experienced a time of great economic uncertainty between 2007 and 2008. At that time, the financial system was melting down due to greed and poor lending practices. What also fueled that financial calamity was the collective hallucination that real estate prices always go up. This turned out to be not true at all as we witnessed a tsunami of foreclosures and a seismic decline that took years to recover from.
As I write this post, we are at the beginning of an economic pull-back caused by a pandemic. I certainly do not have a crystal ball in terms of how long it will last and how deep the contraction will be. I do know the following:
- We will get through it.
- When times get tough, only the skilled get paid.
We will get through this.
On a group coaching call, I asked the 80 agents present the following question:
“How many people have had a personal or professional challenge that you overcame?” Visually their response was powerful because everyone raised their hand. We have all experienced challenges during our journey. What is also true is we will experience more. The power of the human spirit is to endure and learn.
While taking a hot yoga class recently, I found myself in a challenging pose and the instructor said the following, “Take little sips of breath and remind yourself that this is just temporary. You will not have to hold this pose forever.”
The economic situation we find ourselves in at the moment is temporary. It will pass. The question is who will you be on the other side, what skills will you possess, and what will you be known for?
In 2008, I was in a brand new market and starting over in a new marketplace after my mom had a brain bleed. In five years, I was selling 100 homes a year. The last downturn turned me into the person I am today. Use this as an opportunity to do likewise.
When times get tough only the skilled get paid.
Making money when a market is robust is easy. All you have to do is show up, dress relatively professional, don’t say anything stupid and you can make money. A strong marketplace masks incompetency. The following quotes from Warren Buffet say it best:
“When the tide goes out you can see who is wearing pants or not.”
“A bad economy does not cause companies to go broke but it does expose weak ones.”
A bad economy causes weak agents to leave the business. In 2008 in my marketplace, we went from 18,000 agents to 9,000 in a single year. If you have not been actively engaged in outbound prospecting and working on your skills (prequal, presenting price, handling objections, closing), you should be very concerned. If your plan is to be in the business over the next 1-3 years, realize you need to be doing the following:
- Skill up. Role play 1-2 times per day, write out scripts by hand, and chant your scripts. In 2008, I practiced for two hours per day. Do likewise. If you need help with what to say or how to say it, use this link the get the scripts that I use that come with the 7 Skills Mastery bundle. Click here to get yours and skill up.
- Prospect six days a week. To be in the market, buyer’s and seller’s motivation needs to be stronger than their fear. In order to find these people, you need to spend more time looking for them. Remember that it is going to take what it is going to take.
- Dramatically expand your geographic area. If the amount of transactions in your area decline, which they will, then if you want to do the same amount of deals or more, your net needs to be wider. Currently I will drive one hour to take a listing.
- Be listing based. This is always critical. In a declining market it is even more important. All the leverage is on the listing side and you want to have leverage.
- Reduce expenses drastically. Extreme frugality is the name of the game. Look at personal and business expenses and if it does not make you money or help you to make money, get rid of it. Once money is spent it’s gone forever. Being lean will help you withstand the fluctuation of income. This pull back hopefully will serve as a reminder that the oxygen of a business is CASH. Remember that if you are thinking of borrowing money on a credit card or loan to keep up with your expenses, you will have to pay that loan back with future earnings. Tighten the belt and do it fast. Be relentless.
Over the last 5-7 years, there has been an almost singular focus on offense. It is important to remember that while offense scores points, defense is what wins championships.