‘Twas the night before the Fed meeting and all through the country everyone was worried about the GDP numbers and the rising possibility of the United States officially entering a recession. I know that didn’t rhyme but it’s pretty much the truth. It’s also true that real estate agents, more than most are bracing for the impact of a hard economic landing and what it could mean for the next few years of home sales.
As a leader, it’s been interesting to watch the buildup, over the last few months, to where we are now, as agents begin to look hard at what they need to do to find success in a changing environment. Many are concerned about where the market is headed and looking to find new ways to increase business or adjust their tactics. As such, I thought this would be a great time to revisit the simplicity of this business, to calm the waters, and remind each of us how straightforward finding success is as a real estate entrepreneur.
First off, note that I said simple, not easy. It’s important to understand the difference. Making things simple means understanding the underlying structure and then boiling it down to its most essential parts. When you have a clear understanding of how something works, you can see through all of the extraneous details that cloud your judgement. This is what we need to do with our businesses, no matter what the housing market looks like.
What are the essential parts of a real estate business?
The answer, of course, is that it depends on who you ask but I would submit that there are two key components:
– Finding the right people to work with
– Doing the best job possible for those clients
So, who are the right people?
This is where we tend to get in the weeds when building our businesses. For whatever reason, we think that the right people are going to come in the form of shiny toys or people only looking to buy or sell in the next 30 days. That kind of mindset is, truly, what gets agents crushed in times of market shift. The truth is, the right people are people that know, like and trust you. Plain and simple.
So what if the people that know, like and trust you aren’t looking to buy or sell real estate at the current moment? Two things to consider: How many people know you, probably like you, and would trust you if you got to know them better? I’m talking about your existing database. The people that you tend to cringe when their follow-up pops up on your to-do list because you haven’t spoken to them in a while and you’re afraid it might be awkward. I’m talking about the people that know you, you know them, and you’ve done nothing over the past couple of years to deepen your relationship.
Those people, the people with whom you have a built-in connection, a head start, if you will, are the key to thriving in any market environment.
I am a firm believer in the 12:2 model which states that for every 12 solid contacts in your database, if nurtured well, you can expect 2 pieces of business per year. This simplifies things. If you want to sell 50 homes per year, you need to have 300 solid contacts in your database and nurture them well. If you don’t have 300 then you need to spend ample lead generation time adding to your database. As you’re growing your database you need to spend just as much time nurturing it and deepening your relationships.
This deepening of relationships can happen in many different ways. Everything from client events to your consistent newsletter, coffee dates, pop-bys, there’s really no one right way to deepen relationships. What matters most is that you’re consistent, you understand your numbers, and you execute every single day.
That doesn’t mean it will be easy. You’re going to need to expand your comfort zone. You’re going to need to do things that challenge you. By the way, that’s the case with every single entrepreneurial pursuit in the history of humanity. Remember, we’re building a business here. And building a business requires you to grow. Growing comes with growing pains. In this case, growing pains come in the form of emotional fortitude and resilience in our efforts to serve our databases in a manner that provides continuous value and simultaneously allows us to achieve our goals.
Now, more than ever, keep it simple, narrow your focus, and execute with consistency and discipline.