The National Association of Realtors' (NAR) presently claims 1.2 million members. We figure those are figures from 2007, pre-dating the worst of the housing free fall and that there have been many dropouts since then. These NAR membership numbers include more than just agents who sell property for a living; there are building owners and managers, builders, and others with ties to the housing industry. Still, that segment which bases its livelihood on selling houses and earning a commission has got to be scratching for every sale.
Even in the best of times the division of wealth among agents is lop-sided. According the Federal job outlook, the median annual income of agents in 2004 was $35,670. The middle 50 percent of those agents earned between $23,500 and $58,110 a year while the lowest 10 percent earned less than $17,600 and the highest 10 percent earned more than $92,770; many of the latter earned well into the $300,0000 range in pricier markets in addition to the trips, automobiles, and other sales given by their companies.
But, if you were among those earning $35,000 in 2004, you are probably hurting now.
You want to stay in the business until the market improves, but you have to eat, so may we offer two suggestions for modifying your business model in order to increase listings and sales:
- Change the focus of your farming;
- Go Green.
Farming, for those of you who are not agents (and even a few who are) means assiduously working an area in the hopes of getting business. A farm can be a demographic (families with very young children or apartment dwellers) a specific neighborhood, or a church or civic group. Agents send postcards for every holiday and small sales gimmicks such as refrigerator magnets and calendars to keep their name foursquare in the customer's mind.
But reality has shifted. Today it is often energy prices that drive a decision to move. People who commute are looking to move closer to their jobs or to public transportation. People in McMansions are seeking smaller and more efficient homes. Your new farm is composed of the energy challenged.
If you are operating in the city or in a location with good public transit you are in the perfect position to find homes for people fleeing far-out suburbia. If you are working in far-out suburbia you probably have dozens of contacts on your list who at least occasionally think of moving closer to work.
But the key here is in building a solid referral network. If you are a city agent your suburban counterparts are your new farm. Keep them informed of your listings in energy-friendly areas and invite their participation. Or widen your client base and offer the suburban agent a larger than usual referral fee to turn their customer over to you completely. Work the system in reverse if you are in the suburbs. Contact urban agents and find out what kind of referral fee they will pay for your eager customer.
If your town has one or two large employers, there is another farm. You can probably locate a list of at least the senior employees on line so start with them and with the idea that the firm probably has at least an occasional new hire looking for a house and perhaps a lot of employees who are participating in an expensive reverse commute. The later employees also may be getting ready to make a move and from the company's perspective it will be far better if they change houses than if they change jobs.
Follow up your persuasive, well crafted, and error free introductory letter to top management by offering free information that may help them keep those employees even if it doesn't mean a sale. Compile a list of transportation alternatives to the plant from the city or surrounding communities. This list would include the location the nearest mass transit connection, the location of park and ride lots, contact numbers for groups that coordinate car or van pooling. Might there be a charter bus making a daily run or a group looking to organize one? The availability of this transportation list is an occasion for another letter two or three months later offering the list upon request.
Those people in the mini-mansions are another distinct farm. They will be easy enough to locate, just drive through town and look for streets or neighborhoods full of the 5,800 sq. ft, vaulted ceiling homes with a bonus room. This farm should receive regular mailings on luxurious but manageable homes in the community; take the time to devise a quick formula illustrating the cost savings between a 5,000-6,000 sq. ft. home and the more modest ones on your list.
And your mini-mansion farm leads us directly to our second suggestion for a business model modification ' Going Green. Green is hot and will get hotter. Downsizing judiciously is just one of dozens of ways to take your business in that direction. We will talk about others in an upcoming article.