A real estate recession refers to a decline in real estate transactions for over 6 consecutive months. Realtors must have a great system in place to survive the housing market recession.
On average, it takes about 4 to 8 months for a real estate sales cycle to complete. When the market is good, this is okay. However, in a slower market, this cycle length expands even more. This trend shows that market recession takes a real toll on realtors.
In this article, you will discover how to prepare for a real estate recession before the market crashes.
Here are 10 ways to make your real estate business recession-proof:
1. Make Yourself Visible
A recession is a downtime for the business, but this shouldn’t make you invisible.
Use this time to build connections and expand your social circle. Let people know that you exist and how you can help them.
This strategy helps make your business recession-proof because you won’t have to start from scratch when the market begins to flourish again.
An analysis of 23,000 realtors showed that regularly posting on social media is essential for an agent’s success. It is recommended to post at least 2 times a week to communicate with your network and build trust.
2. Expand Your Territory
During a real estate recession, the entire market doesn’t slow down all at once. There are always some regions where transactions are taking place.
All it takes is good market research to determine where buying and selling are happening. You might have to focus on a different geographical area than you normally do.
You can also stay in the game during economic crises by offering help to those suffering the most. Expired listings are pre-foreclosures. They are common during a housing market recession. Pay attention to such cases. And find ways to stay on top of the minds of future prospects.
3. Reconsider Your Investments for Lead Generation
A real estate crisis means low income for realtors. It is crucial to reconsider all investments at this time. Keep checking Return on Investments (ROIs) on your lead generation campaigns. This is the time to decide how much to spend and where carefully.
4. Focus on Your Current Listings
This tip is the best answer to the question, what do real estate owners do when the market crashes? Realtors focus all their energies on making a deal out of current listings. A lot can be done to make a fair deal at the beginning of a recession.
All you have to do is to act promptly. Here are a few things you can do to make that deal:
● Market your current listings effectively.
● You can offer different buyer incentives to encourage the prospects.
● Know that getting the best price is less important than finalizing the deal quickly.
It is because the property might never get sold in the housing market during a recession if not done immediately.
5. Reconnect with Existing Clients
Existing clients are a realtor’s biggest asset during a real estate downtime. Building strong relationships with people who have trusted you in the past is extremely important.
It is recommended that you don’t shy away from servicing clients even when the market is cold.
Markets change like seasons and good times come before you know it. Therefore, it is essential to build trust with existing clients.
6. Generate Leads for Good Times
Good realtors focus on the fact that the market will return to normal shortly. Do your research and list prospects who are likely to buy property in the next 5 or 10 years.
Send them housing market stats and various guides for buying and selling. Such efforts work wonders in converting prospects.
When the storm finally goes away, you will have clients queued up.
7. Make your Business Digital
This is a good time to get digital solutions for your real estate business. It includes replacing client meetings with Skype or Zoom calls and much more.
In this post-pandemic world, knowing how to operate remotely is a necessity.
Discover how an all-digital business has better outreach and scope. You can achieve a lot more by shifting to an all-digital model.
8. Invest Time in Organizing Your Contacts
You probably don’t have much to do during a housing market crash. You can use this time to organize your contacts. Find old business cards or go through emails to make a list of important contacts.
Filing your contacts makes connecting with people and making deals very convenient.
9. Develop a Referral Base
You can develop a strong referral base by focusing on people who already trust you. Keep in touch with your sphere of influence. You can build lasting relationships if you are present at the right time.
Anne Dubrey, a realtor having 33 years of experience, says that she stays in touch with her past clients and supports their endeavors, such as advertising for their kid’s sports programs. In her experience, these efforts have helped her business survive through the toughest of recessions.
10. Know Your Financial Stability Options
A recession is a low-income period for most realtors. At such times, it is crucial to have good financial security options. If you are a homeowner, you can benefit from your home equity.
There are two home equity products; equity loans and a home equity line of credit (HELOC). You can acquire any of these options to have more spending power.
Home equity is not limited to your primary residence. You can also benefit from equity on the rental properties you own.
Conclusion
Market recessions are inevitable. You can make your real estate business recession-proof by building a strategy ahead of time. These tips can help tremendously in carving out a plan that works best for you.
Joni Miller sells luxury properties through Parks Realty. She prides herself on being a leader in luxury sales for Middle Tennessee. She has been selling real estate for 18 years, and has extensive experience in a wide range of housing from first-time home buyers, short sales (including multi-family and commercial property), and multi-million dollar luxury sales. Joni Miller is also a REO Listing Agent.
Call Me Now for any assistance.
REFERENCES
https://www.loansigningsystem.com/how-real-estate-agent-can-make-money-during-a-recession.html
https://www.forbes.com/sites/forbestechcouncil/2021/06/24/are-we-headed-for-a-real-estate-recession-how-to-prepare-for-a-shift-in-the-market/amp/
https://theclose.com/recession-proof-your-real-estate-business/
https://www.statista.com/statistics/1317029/us-recession-lengths-historical/
https://www.ramseysolutions.com/real-estate/housing-market-forecast
https://www.aljazeera.com/amp/economy/2022/7/13/five-things-to-know-about-the-next-us-housing-crisis
https://www.keyrealestateresources.com/the-recession-proof-real-estate-agent-checklist/
https://www.quora.com/What-strategies-do-good-real-estate-agents-use-during-recessions
https://www.upnest.com/1/post/is-real-estate-agent-a-recession-proof-career/
https://www.linkedin.com/pulse/17-ways-recession-proof-your-real-estate-business-afzal-shaikh-/
https://therealestatetrainer.com/6-key-elements-to-surviving-a-recession-in-real-estate/
https://www.bankrate.com/home-equity/what-is-home-equity/#borrowing-equity
