You’ve probably heard about the current lack of inventory in any housing market.
Major agencies across North America are feeling the pressure as new federal mortgage rules, rising interest rates and a lack of new constructions drastically limit the number of available homes for sale.
What’s an agent to do when inventory is low?
Connecting buyers with motivated sellers in a low inventory market is a challenge, but there are solutions. The top performers find ways to attract listings even when inventory is low. Planning and execution, mutually aligned with the right mindset, will drive you ahead of the competition.
Low Inventory or low performance?
Is low agent performance the result of low inventory? Not necessarily. The fact is, even when inventory is high, the vast majority of agents struggle to find leads, attract listings, and close deals.
An interesting independent study by Bosley Real Estate agent David Fleming in Toronto revealed:
- Approximately one-third of licensed agents completed 0 TRANSACTIONS in 2017.
- 51% of the realtors did 1 or fewer transactions for the entire year.
Sound hard to believe? While the figures in his report are specific to Toronto, Canada, it’s a safe bet that most real estate boards across North America are experiencing similar activity among their members.
The point is, even when market conditions are favorable, the vast majority of agents struggle to attract buyers and sellers. Whether inventory is high or low, however, the top performers continue to dominate the market. Low inventory doesn’t keep them from success, and it shouldn’t hold you back either.
Managers, brokers, and agents can make 2018 their best year, in spite of low inventory, by making a commitment to better long-term planning. Get honest with yourself and your team. Ask tough questions, and get more specific about your goals.
5 Sales Data That You Should Never Forget
- Companies with a well-defined sales process experience 33% more success than those that don’t
- Companies that align sales and marketing achieve 25% higher success rate
- Top performers are typically 250% better at qualifying leads which means they spend more time being productive
- Successful sales organizations study the competition for ideas and strategies
- Sales teams that have a business plan achieve quota more often those that don’t
Do You Have A Business Plan?
All too often, agents who struggle to make sales lack a strategy for reaching their goals.
Real estate agents need a business plan. After all, you are an independent contractor. You have overhead expenses, sales, marketing, and operational costs, like any other business.
A well-thought-out business plan will prepare you for turns in the market and equip you with insights to make the best decisions. When preparing your business plan, consider the following:
Points To Consider In Your Business Plan
- Branding: Is my value-proposition clear and consistently conveyed?
- Marketing: Am I investing in the right marketing strategy (digital, direct marketing, networking, etc)? Am I targeting the right audience with the right message?
- Resources: What technology am I currently having success with? What tools could I be using to be more efficient, more productive?
- Knowledge: Is there additional education I need to make me more capable and effective?
- Support: Do I have a strong team to support my clients – (photographer, stager, mortgage broker, appraiser, etc)?
- Budget: How should I allocate my finances? Can I reduce/eliminate any of my current expenses?
- Neighborhood turnover rate: Does my neighborhood have enough turnover to sustain my business?
- Competitors: Have I studied the top performers in my farm? What strategies/tools are the top agencies using to build success?
- Lead Generation: What is my strategy for building relationships in my farm and cultivating those contacts frequently?
- Sales: Do I have a daily/weekly/monthly target for cold calls? How many hours each week will I commit to lead generation?
Completing a real estate business plan will force you to think strategically about how to reach your goals. It will also provide you with better insight into the housing market so you can anticipate trends and challenges. With the right data informing your decisions, you’ll find it easier to maintain a positive mindset that attracts even more success!
Now that you can appreciate the value of planning and research, get out there and start your business plan. If you’re struggling to find sources for listings in your farm, we have some ideas you’ll love!
10 Listing Sources For Markets With Low Inventory
Real Estate coach Tom Ferry discusses a number of listing sources for agents struggling in a low-inventory market. We’ve gleaned the 10 most promising sources from his list to share with you:
- Past clients – are you cultivating the contacts in your database? How frequently do you communicate with previous contacts to drive referral business? You should contact them every quarter.
- Open houses – invite everyone relevant in your contact list, as well as everyone in your farm! Make it an event, not just a walk-through.
- Geographic farms with sustainable neighborhood turnover rate.
- Agent networks to drive referrals – Parkbench has a network of over 1000 agents across North America!
- Listing portals – Zillow, Trulia, Realtor.com where buyers/sellers search for homes
- Expired Listings – overpriced, under-marketed, poorly photographed
- Online seller lead generation – offer free home valuations (takes avg 18 months to convert) using Facebook Ads
- Real estate investors who own multiple properties may be seeking to offload some of those properties
- Builders (New home construction, commercial, rental properties)
Even when housing inventory is low, you can still be a top performer. Market research, planning, and continued coaching are habits you should implement regularly to avoid being blindsided by adverse market trends.
It’s true that industry revenue will be smaller with less inventory available, but key players will continue to dominate market share in your farm because they are better informed, and better prepared.
Instead of lowering your expectations, raise your attitude! Assess your current business strategy, identify areas of opportunity and make a commitment to embrace new ideas.
Don’t lower your expectations because of low inventory. Make 2018 your best year yet and become the top performer you were always meant to be!
What sources are you using to find buyers and sellers when inventory is low? We’d love to hear your ideas in the comments below.