This January marks Inman’s fifth annual Agent Appreciation Month, which culminates at Inman Connect New York in a celebration of agents at the end of January. Plus, we’re rolling out the coveted Inman Power Player Awards, as well as the New York Power Brokers and MLS Innovators awards.
I think we can all agree that 2023 was a bad year for the real estate industry. From commission lawsuits to the meltdown at NAR to the personal devastation Realtors encountered as their sales set record lows: It was not a year for the timid.
As if these issues were not bad enough, the Consumer Federation of America (CFA) just released a new report revealing, in their words, “a critical issue in the real estate industry: a significant surplus of agents, with over 1.5 million selling just 5-6 million homes annually. This glut leads to most agents being unable to sustain themselves solely on sales commissions, contributing to widespread incompetence and pressure to maintain high commission rates.”
They go on to state that nationwide, approximately 49 percent of Realtors sold one or zero homes in 2023. Ouch.
Additionally, the National Association of Realtors, NAR, saw a dip in membership of approximately 1.7 percent, suggesting that the declining market with fewer sales was the leading result. It might also be fair to suggest that some Realtors left as a result of NAR’s recent litany of issues.
Put succinctly, while 2023 was bad news for many Realtors, many believe that the first half of 2024 will not be any better. If that is the case, then a significant number of real estate agents are looking at a wake-up call if they want to remain economically viable in 2024.
What should agents do to increase their odds of success in 2024? I recently had the privilege of meeting with top agents in our region for a mastermind. Representing many of the top companies in the industry, we came together to share our combined knowledge and strategize the way forward in 2024.
From our time together, we developed a list of key areas to focus on this year. Here are our top 10 tips:
1. Know your numbers
I have interviewed numerous agents in the past few years and have been amazed by how many do not know the fundamental numbers for their businesses.
While many simply do not know — they assume that if they have money in the bank, they are profitable – some even consider the lack of data to be something of which to be proud, stating, “We’re not really into keeping track of our numbers like that. We just go with what comes down the pipe.”
In a nutshell, agents who do not track their numbers are operating blind. Personal opinion: To not track your numbers is just plain stupid and is a guaranteed way to run yourself out of business without even knowing what happened.
- How many units did you sell?
- When did you sell them?
- What was your cost per unit?
- What were your expenses last month? Last year?
- How many sales do you need each month to break even?
- Are monthly and yearly financial reports being generated for your business?
- Do you know how to read your financials?
- Can you track the source for every one of your clients?
- How many calls do you need to make to get an appointment?
- How many appointments do you need to go on to get a signed agreement? And so on.
If you do not know your numbers, you do not have the data you will need to make the informed decisions required to stay in business in 2024.
2. Slash expenses
Any business that has more going out than coming in will not be viable for long. You need to sit down and identify every dollar spent and then categorize:
- Category 1: Cannot cut under any circumstances.
- Category 2: Nice to have, but could be cut if necessary.
- Category 3: Fluff that makes you ask, “What is this?” or “Why didn’t I get rid of this ages ago?”
As you start cutting, you may be surprised to discover that things you assumed were critical can be moved to the “nice” or “fluff” categories. You may also find things you have been paying for that you do not recognize or that are no longer viable.
Redo this activity every month. If your income does not match expenses, you will be amazed at how quickly “critical” items can get downgraded or discontinued.
3. Manage your leads
It has been said many times that we are not in the home sales business, we are in the lead generation business. Consequently, lead generation should be a major priority, and ideally, you should have three legs of lead generation to provide a stable platform for your business.
Whether you choose open houses, door knocking, cold calling, pay-per-lead sources, internet referral sites and so on, getting a lead is useless unless you know how to effectively manage it to a closed transaction.
In fact, some coaches across the country are currently insisting that you do not need to pay to generate more leads right now. You simply need to begin to effectively manage the leads you already have. The assumption here, obviously, is that you have a database.
I am flabbergasted at how many agents do not maintain an active database and have no idea how many viable contacts they actually have. If you do not have an effective database, you do not have a business. Job 1, after getting a handle on expenses, will be to start building your database and effectively working it. There are a number of items to consider:
- Do you have a database? If not, start today.
- Identify a CRM. Many are very inexpensive (your broker may have one you can access for free). Once your CRM is up and running, start loading in names.
- You will need a minimum of 200 contacts to be effective. These are not necessarily going to be people looking to buy or sell today but people who could refer someone to you when they hear of a prospective client. You will need to have their name, email, physical address and phone number. Do not have 200 names yet? Crank up your lead generation activities to build up to that number as quickly as you can.
- Stay in contact with everyone in your database, making sure you are adhering to the national Do Not Call guidelines. You should be touching them a minimum of 36 times a year, with calls, texts, social media, mailers and more.
- Keep notes of every contact. As your database grows, your ability to run it by memory will decrease. The more notes, the better.
- Keep adding names. There will be natural attrition; you will want to ensure that you keep your database current and continue to actively grow it. If you can get one sale from every 25 names in your database each year, then the most effective way to grow your business is to grow your database.
- Categorize your database. Some of your contacts will respond more than others; you can categorize them in levels of effectiveness. Focus first on those in your top category and provide them with an extra level of care.
4. Establish effective daily habits
We all have habits, some good, others not so much. Since you already have habits, identify the bad ones and replace them with ones that will benefit your business. A good place to start is to set a daily schedule and stick with it. Period.
- Map out a weekly productivity calendar.
- Start with getting up every morning. Set a time that will enable you to accomplish key activities before your daily prospecting. For our team members, this includes our daily Power UP, which begins at 8:30 am.
- Budget at least two hours a day for prospecting. Three hours is better.
- Schedule as many open houses as the current lack of inventory will allow. Agents I have spoken to this past year have emphatically stated, “I don’t do open houses.” The only problem is this: In the current market, they are proving to be a great source of leads, and while you may not be out there capitalizing on this fact, you can be assured that your competition is.
- The same applies to calling, knocking on doors, writing cards and other basic, fundamental lead-generation activities.
5. Brush up on fundamentals
If your last training happened five years ago, you need to get your skills upgraded. The market today is light years removed from just a few short years ago, and as this industry constantly evolves, you need to be getting the training required to stay current.
Scripts will also need to change this year as the lawsuits are forcing us to change our dialogue. It is not enough to have a bunch of scripts in a binder somewhere: consistent roleplay is vital to ensure you are prepared for any conversation.
If your volume dropped in 2023, then your experience did as well, opening the door for a decline in your skills. Imagine going to a dentist who had only done one procedure last year.
You also need to grapple with the legal changes that will be required as a result of the onslaught of commission lawsuits. Brokerages and Realtor associations are gearing up with training designed to meet the emerging challenges.
Adding to the maelstrom, California has just introduced a whole new wave of forms that are, in some cases, dramatically different than their previous iterations. Unfamiliarity with new forms is a sure recipe for mistakes.
6. Fine-tune your value proposition
What do you do that provides more value than other agents in your area? If you are touting things such as “integrity,” “passion,” “excellence,” “trust” or “service,” then you are off-base.
If you are hyping your virtual tours, staging, brochures and the like, you are missing the point, since these are the fundamentals expected from every agent. If you think your client is interested in how great you are and the fact that you are No. 1 in some category, think again.
To be effective, your value proposition needs to be 100 percent about the client. Consequently, since seller and buyer needs are different, you need a separate value proposition for each – especially in light of the recent commission lawsuits.
At its most basic, “a value proposition is a simple statement that summarizes why a customer would choose your product or service. It communicates the clearest benefit that customers receive by giving you their business.”
Here are four key steps to developing an effective value prop:
- Focus on needs: Identify the core issues potential clients will face when buying or selling a home.
- Be clear and specific: Identify how your services will address your client’s anticipated issues.
- Emphasize the benefits: Explain how your services are unique and how you will save them time, effort and money.
- Alleviate risk: Your value proposition should include specific ways your clients are protected when working with you. If your client is a seller, you could offer an “Easy Out” listing policy in the event something goes wrong. If your client is a buyer, you could offer a one-year satisfaction guarantee whereby, if they are dissatisfied with their purchase, you would sell it for them for free.
7. Develop a referral network
A significant percentage of our transactions come from agent referrals across the country. If you are part of a national brokerage, tap into their referral network. There are also a number of networks on Facebook, organizations like CRS and more.
In addition to adding your name to the networks and monitoring the social media feeds, proactively reach out through the networks to let agents in key markets know that you are available. Track moving patterns across the country and key in on those regions where the majority of local relocations are going and do the same for cities and states sending clients your way.
As an example, here in the San Francisco Bay area, we see significant migrations to Idaho, Texas, Arizona and the Carolinas. With this in mind, agents in our market would be prudent to establish and maintain relationships with agents in those areas.
Conversely, since people are moving into our area on a regular basis, establish relationships with agents in the regions they are moving from.
8. Develop effective allied resources partners
These include title companies, attorneys, tradespersons, lenders and so on. If you use them for your clients and refer them to others, you have an absolute right to request referrals from them. If they do not agree, they are the wrong partners.
9. Get accountable
Gary Keller famously stated, “Accountability is the breakfast of champions.” So true. Regular check-ins with a supervisor, coach or mentor will help you stay on track and provide the encouragement needed to keep you inspired and moving forward.
Working on our own with no accountability is comparable to being in solitary confinement; there is a reason that, in most prisons, it is considered the ultimate punishment.
10. Team up
2024 may be the year you decide to get a partner or join a team, especially if you are a solo agent running out of resources.
Although there are certainly more things to keep in mind than these 10, this is a good start. While some of these may be intimidating, as has been said, a journey of a thousand miles starts with the first step. If you want to survive in 2024, the time to take that first step is now.