Despite living in Florida my entire adult life, I am aware that there are in fact four seasons. Winter, spring, summer and fall. It is very easy to understand this in a physical sense. As temperature changes and foliage changes, we can see the tangible evidence of the seasons. Similarly, there are also economic seasons. The signs of and signals of each economic season are there if you know what to look for. In real estate, I am aware the majority of people that I currently coach have only sold real estate in an up-trending market. In other words, they have only sold real estate in an economic spring and summer. However, just as in nature, there are economic winters. Being prepared for such a winter, which is inevitable, is critically important.
If we imagine that we were living 200 years ago without a lot of the comfort and convenience that is available to us today and we needed to prepare for winter, what would we need?
1) Secure housing
2) A stockpile of necessary resources (i.e. food, supplies etc.)
4) Source of income
Some things have changed in the last 200 years; however, how we should prepare for winter has not.
On a group coaching call, I shared recently what I am doing to prepare for such an economic winter. I share it here in hopes that it would be helpful to those who read it.
1) Make sure your skills are razor-sharp and world-class.
Our chosen profession of real estate sales is 100% a skills-based business. Mastery requires you perfect the five conversations of listing property. (Setting appointments, pre-qualifying appointments, presenting, closing and getting price reductions). No matter what is happening in the economy, if you are the best at what you do, you will always be in demand.
2) Have multiple sources of business.
Many agents become one-dimensional and overly dependent on one source of business. If you have a table and only have one leg on the table, that table is not sturdy. If you have two legs on the table, it is still not very sturdy. Having 5-7 sources of business (i.e. expired listings, canceled listings, FSBOs, past clients, center of influence listings, 50 or more five-star reviews on multiple platforms, referral services like agent machine or agent pronto) is critical to insulating yourself from market dynamics.
3) Getting your financial house in order.
During economic springs and summers, many agents begin to make more money and simultaneously increase their lifestyle. They confuse thinking big with consuming big and thus increase their monthly personal expenses. Doing so creates a dynamic that they become overly dependent on their current level of income and if and when that changes, they have a serious problem on their hands. Now is the time to be paying off all revolving debt (i.e. car payments, credit cards, etc.) and having no debt at all other than a mortgage on a personal home. Once that is done, then saving six months of expenses and having that on tap at all times.
We are in an economic fall. The last time I checked, what follows fall is winter. Are you prepared?