Cooling real estate markets have Realtors in many areas preparing for life after bidding wars and overnight increases in home prices.
Time to pack up those open house signs? Hardly, say agents like Susan Huerta of Long & Foster Real Estate in Clarksville, Maryland. Her business strategy includes a focus on first-time and other buyers rather than sellers. She also is increasing her marketing efforts.
June Fletcher, author of House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis, says Realtors can prosper in changing markets by offering extra services to customers sophisticated enough to sell their own homes but too busy to do so. These services could include arranging the move or researching schools.
Check out these five expert tips on finding new business in cooling real estate markets.
Be Straight with Sellers
In areas where markets are depreciating and homeowners are losing equity, Realtors can offer programs a la carte -- charging separately for services like holding an open house or listing a property with the multiple listing service. Offering discounted, flat-fee listing services is another option. "There will be people who are going to need to save every penny," Fletcher says.
Seller education should be at the top of your to-do list, says Pam O'Connor, president and CEO of Leading Real Estate Companies of the World. Some homeowners may not realize prices are declining.
That means agents must "demonstrate the market by showing year-over-year and even month-over-month numbers from the multiple listing service," O'Connor says. "They can show current listings of comparable homes online so they can see if overpriced homes are sitting, how similar homes are priced and how they compare in terms of updating, amenities, etc."
Fletcher suggests Realtors broaden their reach to include international buyers. "That's a huge untapped market," she says. "You can buy an entire single-family home in Orlando cheaper than you can put an addition on your home in England because of the exchange rate."
Today's buyers often prefer to virtually tour homes rather than drive around town with a Realtor. "Buyers search the Web first, and while they may not choose their agent there, they make judgments about companies and agents they are considering based on those sites," O'Connor says. "Realtors stand to lose if they allow national sites, like mortgage lender sites, to upstage them by offering more to consumers. If fewer buyers are in the market, this will become even more important."
Huerta says a nationally accessible Web site is a vital tool for reaching buyers in your local market and beyond.
Consider the Relocation Market
Historically, when the discretionary real estate market declines, the relocation sector, which manages moves for transferring corporate employees, can be a mainstay. But that segment is also softening.
"Corporate moves have declined in general in recent years due to cost-of-living resistance, virtual work opportunities, slower job growth and corporate cost containment, so relocation volume may not be as pronounced in a future downturn," O'Connor says. "But it's always good for Realtors to maintain relationships with relocation companies and corporations that dole out this business, and that means being willing to handle it in an active market when you may not need the referrals. Those business sources remember who was there for them in the busy times."
Remember Real Estate 101
It never hurts to go back to the basics: educating sellers on market changes, making sure you have a great Web site and targeting a specific niche like first-time buyers. In any market, sound real estate practices pay off.