Residential Real EstateThe "Bubble" And Your Real Estate Business
We hear so much talk nowadays about "The Real Estate Bubble" and how it may impact all of us. Experts are lined up on both sides arguing whether or not real estate values are set to take a massive fall after so many years of solid appreciation.
While all of this has significant consequences to the owners of real estate themselves, how does this really affect you as a practicing real estate agent? Will your business be OK as long as the bubble doesn"t burst?
Well, in answering this, what"s most important to your income as a real estate agent is not whether or not the bubble bursts, it"s whether or not the frequency of closed transactions in your territory slows down. The more transactions that are continually closing in your area, the more opportunity there is for real estate agents to earn commissions. And when there are fewer transactions closing in your area, this means that the agents overall are making less money.
So the bubble doesn"t have to burst in order for the number of overall transactions in your area to change. Even if prices just level out and remain the same, the level of activity and the number of transactions may no longer be the same. This is because some of the buyers over the past years have been buying because they anticipated immediate appreciation afterwards, and if this expectation is no longer there, some of today"s buyers may
decide to wait instead.
The commercial side of the business, though, is different. As long as the economy continues to improve, the number of sales may slow down, but the amount of leasing will increase. This is because more companies will still need additional space for their businesses, and not making a move to a new facility will hinder the growth of their companies.
As an agent it"s important for you to anticipate these changes and adjust your strategy for success accordingly. If you notice that the level of transactions has slowed down in your area, you now need to locate a higher percentage of the prospects in your area to make the same amount of money as before. So you"ll need to increase your prospecting efforts accordingly to make this happen.
Whatever you do, don"t be an agent who gets caught like a deer in the headlights. For agents who have never experienced a market in transition, it"s easy to just keep doing what worked before and wonder why it"s not working now. But different markets require different strategies for success.
Anticipate the changes in your market in advance. If you sense a slowdown in the number of transactions overall, it"s time to step up your prospecting and marketing, which sometimes means you need to be spending more, not less money, on marketing you.
Ask yourself:
What are the changes that are happening in my marketplace right now?
Based upon these changes, what should I be doing with my time now to maximize my income?
What steps can I take to change my approach and game plan over the next 30 days so that I"ll maximize my success now and in the months ahead?
When you anticipate the changes in your marketplace and adjust your strategy accordingly, you"ll maximize both your opportunities for success and your ability to be a top performing agent in any market.