In a hot real estate market, it can be difficult to remember that housing sales are not always rapid-fire. In April 2021, homes were on the market an average of one week before they had one or more offers pending. But real estate agents who have been in the business long enough, know that this is not a sustainable trend. For perspective, in 2010, the average number of days on the market was 140.
This past year brought dramatic market swings. The first half of the year was red hot, with low inventory, record-breaking home prices and significant buyer demand. The second half of the year, however, left a radically different footprint. Demand saw a steep decline thanks to inflation, and mortgage rates rose to their highest levels since 2008. Analysts now predict a recession may be imminent.
Time offers valuable perspective, but a startling number of Realtors — 40 percent according to the National Association of Realtors 2022 Member Profile — have been in the industry for fewer than five years. These new real estate agents will not have witnessed a market slowdown yet.
What they’ve experienced, in the past two years especially, is demand so high that they could show up to work confident that leads and new opportunities would find them. The agents who will stay afloat in the coming year will be those who have mentally and financially prepared their businesses for the unpredictable surprises ahead.
How do real estate agents prepare for an uncertain real estate market in 2023?
Get goal clarity
As the market cools, successful agents who stand out will likely possess one distinct advantage: Clearly defined goals.
“Goal clarity is essential,” said Eric Thompson, founder and CEO of The Leading Edge Academy. “Knowing what is most important for you, your team and your family is the best motivation when the market gets tough.”
Clear goals, grounded in reality, are made through an honest evaluation of the previous year. Take inventory by asking:
- What beneficial skills did I develop?
- Where did I find the most fruitful networking prospects?
- Were there any missed opportunities I could have handled differently?
- What tasks required the most resources?
- How could I improve workflow?
- What factors held me back from reaching my potential?
From this list, define the things you want to invite into the coming year. Similarly, get crystal clear on the things that are not invited, like poor time management, inconsistent communication practices or a knowledge gap that needs to be addressed. These markers will help shape effective goals for the coming year.
Make personal connections
Creating a 2023 game plan with specific, authentic actions is the key to making a high-impact business plan. In real estate, those actions have to be built through personal connections to be effective. Connecting with other people — clients, vendors and colleagues — is the core of our business model. Relationships drive sales, generate leads and build credibility within the community, but they must be genuine to be effective.
“The best way to connect is by being your authentic self,” Thompson shared. “Host dinners with a small group of clients or rent out a restaurant and invite a large gathering. Plan an event to support a charitable organization you love or throw a party with Instagram-friendly backdrops. The most connected agents are the ones who stay true to their personality.”
Essentially, go back to the basics. The last two years were outliers and these simple tactics can produce meaningful results in building up business leads and personal brand awareness:
- Handwritten notes to past clientele, leads and key members of your sphere of influence. Notes can be holiday greetings, recognizing birthdays or just to say hello.
- Work your database. Communicate with your clientele or key referral friends often by way of snail mail, emails, and texts, as well as find times for in-person meet-ups whether that is a catch-up over coffee, dinner at your home, round of golf or hosting a luncheon event or a larger group.
- I mean, really work your database. Be resourceful and creative in ways you are finding referrals and honing your skills. For example, no listing appointments? That’s okay. Put together an interactive Comparative Market Analysis for a client you represented two years ago and ask to share it with them. Even if they are not interested in selling, it’s a touch point and could lead to referrals.
- Engage with your local community. Find opportunities to volunteer with local organizations, participate in charity events or host your own. For example, Walt Danley Christie’s International Real Estate’s North Scottsdale Office Managing Broker Buzz Carr organized a tennis tournament with local-area Realtors in October. Funds raised were donated to the winner’s nonprofits of choice, which in this case was HomeSmart Agent Relief Fund and AZ Special Olympics. The event was a great way to establish relationships in a fun setting with agents outside of your brokerage which expands your sphere of influence.
Build authority
Knowledge is what separates a professional from a hobbyist.
According to Thompson, the magic formula to success is building a business plan around building relationships and establishing credibility. So, don’t hide under a rock when times get tough or the future holds uncertainty.
When asked, “How’s the market?” the wrong answer is: “It’s crazy.” Instead, share a statistic or fact about the market today. The top three facts people want to know about are:
- Pricing
- Inventory
- Days on market
Stay up to date on these stats every day and cite sources to build your authority in the residential real estate space. We provide analysis on our local Cromford Report for the Greater Phoenix area, so there are likely similar reports in your local market, or with your brokerage or local Realtor association.
The National Association of Realtors is another great source for national trends. We take a consultative approach to what we do. We educate with actual data and facts because, while sugar-coating may make you sleep better that night, it’s not a strategy.
Know your why
On the other side of those goals needs to be a hefty reward worth fighting for. Some call this reward your “why,” as in why you work so hard, or what you’re striving for. Your reward will be as unique as you are, but it’s the fuel that supercharges your business plan, making success a non-negotiable.
“One agent in a planning session said her financial goal was to help her husband retire because he was a burned-out ER doctor who had worked through the pandemic,” Thompson said. “Because she was clear on the reward she was striving for, she couldn’t be stopped.”
Know your purpose and then frame your mindset positively because if you expect to win business, it will affect your results.
Stay focused
Even the best-laid plans fail when left to collect dust, so use those connections to develop accountability for yourself. Commit to tracking your progress individually or as a team and periodically review your plans and action steps. Every quarter, reevaluate your approach and adjust for actual market conditions as well as volatile factors like natural disasters or supply chain hiccups.
Flexibility beats out rigidity when it comes to an industry like real estate, so adapt, pivot and adjust to stay successful within the ever-changing residential real estate market. With an actionable business plan, realistic goal-setting and the right carrot driving you forward, success comes into focus and is within reach.
Walt Danley is founder and president of Walt Danley Christie’s International Real Estate in Paradise Valley, Arizona. Connect with him on LinkedIn.
