I think it is pretty obvious for those of us in the real estate industry in the Greater Toronto Area that the game has changed here. Since April, the market has shifted.
A great coach of mine, Dan Sullivan, once said, “Play the game with the cards you are dealt, not the ones you wished you had.”
There is a great book called Shift – How top agents tackle tough times by Gary Keller that I would highly recommend to everyone. Here is some insight from the book and the thoughts I shared at my mastermind group recently, relying on my 28 1/2 years in the business.
1. When the market shifts, shift with it.
Don’t try to fight it or deny it. Many listing agents are in serious denial about this market.
2. Get real and get right.
Local shifts happen very quickly from a sellers’ market to a buyers’ market. (Buyers’ to sellers’ markets happen gradually). If you were around in April 1990, you know what I mean. It shifted quickly and took two years for prices to stop dropping (eventually by 40 per cent). The game of real estate is played between your ears. You must adjust your mindset and your actions quickly.
3. K.A.S.H .
Knowledge, attitude, skills and habits are what you need to change right now. We have moved into a market where highly skilled agents will begin to dominate because they know what to do.
4. Re-margin your business fast.
Cut your expenses now by 20 per cent at the very least. You will learn that listings cost a lot of money. Having a lot of listings that don’t sell will kill your cash flow. All listing expenses are upfront, with the hope of getting paid later.
5. Find the motivated.
There is a difference between a buyer and buyer-buyer and a seller and a seller-seller. A buyer wants to buy but a buyer-buyer must buy…. same with sellers.
6. Step up your lead generation efforts.
You will need twice (or three times) as many buyers and sellers to make the same income you made in the last 12 months.
7. Get to the table – lead conversion.
You must know your numbers, know your value and know your scripts. This is a high-skill game now.
8. Three main buyer habits.
They think the market is crashing. They will start to low ball (or like the good ole days when we drew up offers for multiple houses in one night and just played sellers against each other) or will begin to play the “wait and see” game.
9. Three main seller habits.
Anchoring behaviour (anchoring their price expectations to the home on their street that sold three months ago). Sellers will refinance and do renovations (this has been happening for a few years). Sellers will chase the market down and adjust their price too late.
10. Price ahead of the market, not behind it.
We have entered the “beauty pageant” market where there is only one winner every week in the neighborhood. When the tide was rising, everything sold for crazy money. The tide is moving out now. Price ahead of the market.
11. The maximum price for your home is today’s price, not yesterday’s.
At one time, you could have bought Facebook stock for $20 or sold your Nortel stock for $140. I was 40-years-old once too. Things change.
12. Focus on your eight core competencies 80 per cent of the time:
- Get the training and knowledge you need
- Lead generate and capture
- Present your services to buyers and sellers at appointments
- Go out and show homes to buyers and sellers
- Write offers and negotiate contracts
- Bullet-proof your transaction with higher deposits and quicker closings
- Co-ordinate the closing
- Manage your money!
We have transitioned from a “lucky sellers – unlucky buyers” market in the first quarter of 2017. We have now entered a “lucky buyer – unlucky seller” market (unless you win the beauty pageant that week). Smart sellers adjust quickly to the market and smart buyers buy on “dips”, not at the top of the market.