Editor’s Note: The Playbook is an RISMedia weekly segment centering on what brokers and agents are doing to ensure they not only survive but thrive in these challenging times. Industry professionals explain the strategies they’re employing and unique ideas they’ve formulated. Tune in every Thursday for another addition to the series.
The way people are talking about real estate now could not be more different than how they were at the beginning of the year. Whether you want to blame a narrative created by mainstream media, consumers’ own short memories regarding mortgage rates or something else entirely, the reality is that attitudes around buying and selling homes are decidedly more cautious, or even negative. While your responsibility to your clients must include acknowledging the new realities of the 2022/23 market, how you talk about real estate can make all the difference for your business.
Regardless of what your market looks like, or what has worked for you in the past, now is the time to start thinking about your pitches, presentations and everyday conversations about your industry.
Facts are friends, not foes
For some, the instinct might be to avoid talking about the less sunny side of recent real estate developments—rising mortgage rates, slowing price appreciation and other headlines popping up in the national media. But ignoring those things won’t make them go away, and potential clients are likely looking for answers rather than empty assurances.
In the end, it’s not these stats and headlines that are the problem. It’s how they are framed in the minds of consumers, often without context or overly focused on short-term negatives. Now is the time to be the most up-to-date, and bring the most historic, personal and relevant data to conversations about real estate, according to Heather Maddox, a broker with Windermere.
“I want my people to have my message about the market because the media is giving a lot of messages, and as brokers, we often see what the media is saying and we think, that’s not exactly right. I want the message my buyers and sellers get to be coming from me. Most of my buyers and sellers are not looking at real estate every single day; they’re not trying to time this market. They’re buying and selling because it fits their life; they need to. They look to me for guidance when it comes to what’s going on in the market. There’s always a positive approach to what’s happening. This market is good for somebody—every market is good for somebody.
“You could have bought last year, but you would have paid 20% over asking and waived all your rights. Now you can negotiate down a little bit, maybe get some seller credit. So the same house is not that different when you lay it out that way.”
Maddox says she personally likes this market, describing it as a “level playing field.” Buyers who are lamenting having missed the low interest rates of last year are often skipping over the fact that they would have had to pay well over asking and waive nearly every contingency, she points out.
For sellers who are depressed at having missed out on the market’s peak, she has people calculate the equity they already gained—the money they are making, rather than the theoretical money they missed out on—and she puts hard numbers behind it when possible.
“I focus a lot on, what did you buy your house for, and how much equity have you earned? I call it ‘wake-up money’—how much wake-up money did your house earn, without you really doing anything?” Maddox poses. “We never know when the top is here until we miss it. You don’t know it’s the top till it’s already gone, and we missed the top. But we’re still up there, prices are still phenomenal…and if you look at how much your house made year-over-year across, say, the last 10 years that you’ve owned it, you’ve done great. So I kind of just focus on the ‘wake-up money’ and do a happy dance around that—like wow, your house made you $60,000 a year, that’s like another income!”
Dial the emotion down
Without generalizing too much, buyers today are often fearful of a 2008-esque crash, while many sellers will become distraught if their home isn’t selling at 2021 speed and price-levels. These intense emotions can make the real estate relationship difficult, requiring a lot of attention, understanding and patience from the agent.
Kristine Milkovich, co-owner of the Milkovich Team with John L. Scott Real Estate, says that she “leads by example” to show her agents how to be a rock for clients in what might seem like turbulent times.
“We talk about the fear that this is causing in our clients, and it is our job to be there for them, to guide and support them to create a sense of safety. We don’t have all the answers. We don’t have a crystal ball, but we can help execute a plan, and I think that’s something that we really tap into in our team,” she describes. “The No. 1 thing is, when times are lean, I want agents to remember that you are a ‘well-paid problem-solver.’ Be really, really, really, really good at solving problems for people, and caring about them.”
Having those conversations with agents at regular meetings, and preparing them to remain focused on these fundamental duties allows her team to “weather the storm,” Milkovich says, with consistency and success. The “general human nature” is to respond to the current uncertainty with fear, she says, but that creates an opportunity for agents and brokers to stand out—to remain confident (not prescient), and demonstrate their deeper understanding of housing when every other voice is shouting panic and mixed messages.
“The more that we, as real estate brokers, can put ourselves into that consumer lens—I think that’s the overriding thing, is just being a source of hopefulness,” says Milkovich. “It’s not about brushing the facts under the rug, but just really being that guide and that coach and letting people know that when it is the right time for them, we’re here.”
Make it measurable, personal or both
Milkovich also advocates for getting specific—either using examples from her own life that people can relate to, or the kind of data that is missing from sensationalized news reports.
She tells clients about her own home-buying experience as a young professional.
“Guess what the rate was? Like everybody else’s in the country, it was 8.2%,” she says. “I made equity over time, I became a homeowner, and I stopped making my landlord wealthy.”
Maddox bought a home last year, and she also tells clients her own story to help contextualize how trying to time a market is a bad bet in real estate, reminding people that buying or selling is more about your own circumstances than about macroeconomic conditions.
“Don’t try to time it for the market, time it for you. Hang onto it and it will be good to you,” Maddox says. “I see the value in now.”
Going further, Maddox says she does research on what is on the market currently for sellers, looking deeper into presentation as well as price—everything from staging to deferred maintenance to curb appeal. Because there are less buyers now, she says the aim is to be positioned at the top—to get the one perfect offer—compared to a year ago, when a listing only had to be in the top 10 to get a dozen offers.
“Now we want to be in the top one or two,” she says. “That’s important.”
Milkovich says she brings a plethora of data to any client conversation.
“We’re pivoting to go deeper on how we keep the consumer stories in check and lead with data and math, and then we have a lot of scripting that is proving to kind of save the situation right now,” she says. “When I go to interviews now…I’m just tackling the elephant in the room.”
The current pivot is almost like what the team did in 2020, Milkovich says, as she helped her agents adjust to that new environment, ensuring that she (along with her sister and co-leader, Lisa Milkovich) are guiding the team.
“It could be talking about the rate, it could be talking about compound interest,” Kristine Milkovich says. “I’m not an economist and I don’t hold any degrees in that arena, but I’m a working-class person and I’m a broker, and so I just go back to reminding people of those historical norms based on facts and data.”
Starting from that place of “being a broker with data, and being an expert,” Milkovich adds that being “approachable” is really what she and her team are known for, and that is where she can double-down, focused on building trust and relationships that will outlast any downturn.
“Just real talk,” she said. “If it’s not right for them, then of course we say, ‘Let’s hit pause then.’ I’m going to call you once a week, I’m going to keep sending you my monthly reports, you’ll probably hear from my team and you’ll see all of our stuff on social media. I’m not going anywhere, but no problem—let’s see if you feel differently come Q1 2023.”
- There are plenty of ways to speak facts without being negative, or sweeping issues under the rug.
- Understanding new fears or frustrations will be critical, for you and your team.
- Bring concrete data and history, but don’t forget your other strengths and assets.
- Sharing personal stories has never been more important.
Don’t pretend like you have a crystal ball, but know when you can be “a source of hopefulness.”