Veterans reveal 12 ways to keep your business rocking in a rough market

By Marcie Geffner

Though newer real estate agents may be understandably mystified by the challenges of today’s housing markets, longtime veterans have, quite literally, seen it all, and due to their decades of experience, they aren’t nearly as daunted as some of their newer and greener colleagues are.

“Real estate goes through cycles,” observes Annette Graw, a broker-associate with South Bay Brokers in Manhattan Beach, whose career dates back to 1974. “We go up and we go down. It’s nothing new.”

If this is your first—or steepest downturn—here are a dozen tips that veterans suggest could help you hang on until the

market turns.

1. Get busy. Success in a weak market means you’ll have to do tasks you don’t want to do. Graw recalls an open house she held years ago at a downright inconvenient time: “I’d had a brand-new house on the market for six months,“ she says. “It was New Year’s Eve; the builder wanted it open, and I was pissed off, but I did the open house, begrudgingly. [A couple] came in … and I sold the house.”

2. Get strategic. Even experienced agents have to rethink their strategies and work harder in weak markets. Karen Halladay, a broker-associate with Alain Pinel REALTORS® in Walnut Creek, says she and her partner-husband Wayne realized they couldn’t count on their usual sources of business because “now, if someone doesn’t have to move, they don’t.” They decided to undertake a study of the market: They toured properties, tracked trends, surveyed rents, and, after a few months, concluded the time was ripe for investors and first-time home buyers. “It’s all stuff we’ve done in the past, but we haven’t concentrated on it,” she explains. “Now, we are concentrating on it.”

Veteran REALTORS® know that strategies that worked in a strong market may be ineffective in a weak market and vice versa. Examples of weak-market strategies include short sales and buyer-friendly financing such as seller carry-back loans. Interest-rate buy-downs, in particular, are “a really good alternative for both the seller and buyer,” says Bernice Ross, co-owner of RealEstateCoach.com in Austin, Texas.

3. Get market smart. REALTORS® should pay attention to two indicators of market activity: the average number of days that for-sale homes have been on the market and how many months’ supply of for-sale homes is currently on the market, according to Ross. “If there are places in your market where the supply is eight months, 10 months, or 12 months, you want to work in the area that has eight months,” she explains.

Halladay’s history illustrates Ross’ point. As a newbie in the early ’80s—Halladay was first licensed in 1977—she relocated her office to a different community to take advantage of a faster-paced market. “Buyers would start out wanting to look in Walnut Creek and then decide they couldn’t afford it, so I would wind up selling them something in Concord. I decided to move to where the action was,” she says.

4. Get picky. Veterans insist that some listings aren’t worth the effort. Halladay learned to walk away from listings in the ’80s, when sellers refused to accept their home’s reduced value. “I took fewer listings,” she says. “I’d say, ‘If you aren’t going to be realistic, I don’t think we can work together.’”

5. Get educated. A weak market is an ideal time to take training classes, suggests Graw, who is a master instructor in the Graduate REALTOR® Institute (GRI) program.

6. Get creative. Challenging markets call for calculated risks in your business practices. Graw says one of her GRI students recently sold a house in just two weeks because he’d offered the sellers a listing agreement that was only that long. “He was taking a chance, and he got the sale,” she says. “Sometimes, you just have to do things a little differently.”

7. Get back to basics. Veterans also say agents should get familiar with such tried-and-true strategies as marketing plans, open houses, and even cold-calling. John Oldfield, a mid-career REALTOR® with Prudential California Realty in San Francisco, reports that a team in his office has been on the telephone five days a week, several hours a day. “They’ve gotten a significant number of appointments and at least two or three listings as a direct result of that,” he says.

8. Get reconnected. “If you’ve been in the business a few years, you have a group of former clients; and if you haven’t been routinely keeping in touch with them, now is the time to reactivate that plan,” Oldfield says. Don’t overlook clients who were involved in less-than-perfect transactions. Even if a past deal “wasn’t the most wonderful transaction in the whole world, that doesn’t preclude your getting back to those clients and finding out where they are and what’s been happening,” Graw adds.

9. Get cheap. Most of the costs of a typical realty business are fixed and, thus, difficult to eliminate or reduce. That means cost-cutting alone probably isn’t a viable strategy for staying

in business if you’re struggling, Oldfield notes. Still, some opportunities to reduce expenses make sense. Halladay says she has cut back advertising on a couple of Web sites and started to

use Dashfly.com to plot out shorter, more efficient routes for property tours.

10. Get cooperative. Longevity and success in real estate depend on your ability to cooperate with other agents, who also happen to be your competitors. “You can’t afford to be cavalier about working with other agents. The small stuff gets magnified in a market like we are in now, and it can get magnified out of all proportion,” Oldfield warns.

11. Get partnered. “Partnering up is potentially a good strategy,” says Oldfield, who works with a partner. “You can develop a strategy, and you have someone to hold you to the execution,” he says.

12. Get hired. Productive agents, and particularly those who specialize in short sales or bank-owned foreclosure properties, often hire assistants to take on certain tasks. These jobs can be good opportunities for newer agents who want to learn and practice skills they’ll be able to use independently in the future.

Bad Markets, Worse Mistakes

Just as certain strategies are especially effective in good markets, certain mistakes can be magnified by weak market conditions. Here are five errors that can be fatal to your business in a slow market.

1. Price wars. One of the biggest mistakes many REALTORS® make in buyer’s markets is to undervalue their own services and agree to accept cut-rate commissions, veterans suggest. That’s not to say that competition isn’t healthy, but agents who discount their services to rock-bottom levels may not earn enough income to cover their costs and remain in business. “Sellers were getting aggressive about demanding commission cuts when the market was so good. Some agents are still doing that, and yet they can’t pay for their gasoline,” says Karen Halladay, a broker-associate with Alain Pinel REALTORS® in Walnut Creek.

2. Wrong-sized markets. Another common mistake is to over-enlarge or excessively shrink your target market. A too-large market increases costs and exposes you to a variety of problems and mistakes that can result from inadequate market knowledge. Veterans report that agents have turned up with buyers in tow from offices up to 35 to 40 miles away. If you’re familiar with a market that far away, by all means, go for it. But if you’re in a strange territory, be wary and consider whether it might be smarter to refer that buyer to a local REALTOR®.

On the flip side, a too-small market or a specialty that’s not in high enough demand to sustain your business can be dangerous as well. “Don’t get into such a little niche that you are not dealing with the bread-and-butter real estate transactions,” advises Annette Graw, a broker-associate with South Bay Brokers in Manhattan Beach.

3. Lax disclosure. Buyers tend to be much less forgiving about house defects in buyer’s markets. That means REALTORS® need to be all the more diligent about proper disclosures of material information, suggests Bernice Ross, co-owner of RealEstateCoach.com in Austin, Texas. Agents “didn’t have to worry about the condition of the property when the market was good,” she says. “There is a whole generation of brokers who were selling properties with no loan contingencies and no inspection contingencies.”

4. Risk exposure. Yet another potentially costly error is to sign a contract that forces you to accept unreasonable risks. REALTORS® who want to handle bank foreclosures need to be especially aware of contractual obligations since “lenders are trying to shove all the liability onto the agents,” Ross warns. Never sign a contract you haven’t read or don’t fully understand.

5. Part-time work. Some agents understandably decide to take on a part-time job to supplement their income in a weak market. Veteran REALTORS® report that some of their colleagues have taken part-time positions in restaurants, hardware stores, and the like. But veterans also say this financial decision more often than not leads eventually to an exit from the realty business. The part-time job creates distractions and locks the REALTOR® into an inflexible schedule that can be difficult to manage alongside a full-time real estate career.

Marcie Geffner is a freelance writer.