There is no doubt that real estate, after a hectic few years, has dramatically changed. Mortgage rates have doubled in response to rising inflation. Transactions have decreased, partly due to those mortgage rates and partly because inventory is still so tight. In response to these changes, real estate agents who want to not just succeed but grow their business must treat it as a professional business. By committing to continually improving their skills and best practices, they will find ample opportunities for success in the year ahead and beyond.
Changes for agents, buyers and sellers
Experts say the majority of real estate agents in the industry today have not worked in a “normal” market. With the record-breaking pace of houses selling almost as soon as they were listed, agents did not have to use certain skills like negotiating prices or asking for seller concessions. The “almost too easy” atmosphere attracted thousands of new agents.
Now, with rising mortgage rates, many buyers will unfortunately be priced out of the market. For those who can still afford to purchase a new home there will be less competition. It will also ease pressure on buyers, giving them a bit more time to decide and reduce “panic” buys. They will have more time to look for a home they love as opposed to buying one in the heat of the moment.
For those potential buyers who are concerned about a mortgage rate that is higher than it would have been a year ago, agents should remind them that it’s wise to keep in mind the mantra, “marry the house, date the rate.” There is no need for clients to feel locked into a 30-year fixed-rate mortgage. In a year or two, when rates inevitably cycle down, they can refinance to a lower rate.
When it comes to sellers, agents must be the calm voice of reason when their clients express remorse that they didn’t sell sooner, when home prices were at historic highs. No one can perfectly time the market. Home prices are still solid and higher now than they were a year ago. Most homeowners have seen an appreciation in their home equity and owning a home is still the best hedge one can have against inflation.
Put the “I” in investment
For most people buying a home will be the biggest and most emotional financial transaction they will ever make. An experienced real estate agent plays a significant part in that journey, helping the client every step of the way. Yet most people don’t consider an agent part of their investment team. Instead, the relationship ends when the transaction is completed.
Real estate agents should stress to their clients that they will be there for them for any future real estate needs they may have. An agent can advise on purchasing an investment property such as a multi-family building, a second home or commercial real estate. By staying in touch with past clients and continuing to provide them with valuable information, the agent establishes themselves as a trusted, knowledgeable advisor.
Out of state, out of mind
The trend of working from home, corporate moves, retirement and weather are just some of the reasons people move from one area to another. That is why it makes sense to build and grow a network of like-minded real estate agents.
If a client moves out of the area, there is no reason to consider the relationship over. Rather, it can take on a whole new dimension. Agents can let the client know they are happy to refer them to a trusted professional in their area, who, just as they did, will provide superior client service. Referrals can be a great source of additional business.
Don’t do it alone!
There will always be buyers and sellers, but some experts predict that by the end of 2023, there will be approximately 200,000 fewer real estate agents than there are now. Real estate agents who commit to coaching and training to sharpen their skills will be the ones who are best positioned to be successful, even in a shifting market.
To learn more about how you can grow your business and have your best year yet, watch Brian Buffini’s Bold Predictions for 2023 at www.buffiniandcompany.com/bold2023.