from Florida Realtor Magazine, December 2007 | by Rosa Nell Hammer | page 47

How to Manage the Curve Ball

Think today’s market is tough? Consider these words of wisdom from a 40-year veteran who’s seen it all.

If you think real estate professionals working in the Florida market have it tough right now, consider what some of us veterans were going through back in the early 1980s. Interest rates were hovering around 17 percent, housing inventory was at an all-time high and buyers were harder to find than proverbial needles in the haystack. We toted outdated MLS books under our arms, and plenty of pocket change to alert potential buyers about their dream homes via corner phone booths.

Circle on back to the late 1960s and early 1970s, and the climate wasn’t much more favorable for real estate professionals. When I got into the business in 1967, for example, mortgage foreclosures were extremely high and one-year listing agreements were common, and not always successful.

Now it’s 2007, and after coming off the highs of the late 1990s and early 2000s, we’re once again working in a challenging market. Comparatively speaking, this cyclical downturn isn’t as bad as the ones I’ve seen in the past. Business has slowed, but it hasn’t come to a halt. People are waiting to buy, but are paying attention to prices—and promises of more reductions in the near future.

What’s different this time around is the presence of technology in the industry. With tools like the online MLS, cell phones, GPSs and laptop computers at their avail, real estate professionals can work smarter instead of harder, thus ensuring their longevity in a cyclical industry.  

Here are four ways I’ve sustained the curve balls that have been thrown at me during my four decades in the business:

1. Grab the Listings
There’s no better way to deal with a downturn in the real estate market than to get as many properly priced listings as possible. When you have the inventory, you have sure sales that don’t require you to turn over rocks to find buyers.

My partner, Allan Pelaez, and I aim to get two to four new listings a month—a goal that’s become a bit harder to achieve in the current market, since many homeowners are unsure about what to do with their properties.

The best approach is to look for sellers who need to unload their homes due to factors like divorce, relocation and health-related issues. There’s always someone who needs to sell, so go back and contact your sphere of influence (including past buyers and sellers, potential customers, and friends and colleagues) via telephone, e-mail and direct mail, to ferret out the folks who are selling homes in spite of current market conditions.
 
2. Don’t Sell, Educate
Foreclosures are high in Florida right now, the subprime market has all but collapsed nationally and billions of dollars in adjustable rate mortgage loans are on schedule to reset in the next few months. As a real estate professional working in this environment, it’s up to you to become an educator and help your customers work their way through these issues.

Whenever I hear buyers mention credit issues, or sellers say they’re “upside down” on their homes, I tell them that we need to sit down and discuss the options before they make any rash decisions.

For example, I remind them that interest rates are still excellent and that, despite the media reports and hearsay, it’s still a great time to buy a home. I also talk to them about preserving their credit rating, particularly because lenders have moved to a much more conservative approach than they used in the past.

3. Let People Know You
Now is not the time to sit in the office, waiting for the phone to ring. To keep the business pipeline full, you need to be out knocking on doors in your farm areas, doing cold calling (within the parameters of the do-not-call regulations, of course), and pressing flesh at community and professional events. I’m a long-time member of and volunteer with the Orchid Club—an association that often leads to new business and referrals. This is the time to stand proud. Wear your name tag, put a sign on the side of your car, hand out business cards and do whatever else you can think of to get the word out about your services, experience and reputation.

My very first listing came from walking through neighborhoods and leaving my brochure and business card with someone who was out working in his yard. I didn’t try to push my services on him, but I left the homeowner with those materials and talked to him for a few minutes about his property and neighborhood. Two weeks later, he called me at my office, and I had my first listing. And while technology has certainly changed the way we do business, this back-to-basics approach can still work well in today’s market, where someone who is out washing his or her car in the driveway may be your next customer.

4. Manage the Fluctuations
One great way to deal with the ups and downs of the real estate business is to admit to yourself that you’re not an employee and to sock away a portion of your commission for the hard times, should they rear their ugly heads. When times are good—as they were just a few years ago—you shouldn’t spend your checks like there’s no tomorrow. Instead, put 10 percent of your income into an account that you can tap when the market slows. Also, allocate another 10 percent for overhead (e.g., computers, cameras and office supplies), which will need to be covered whether you’re getting one commission check a week, or one per quarter.

As with any career, the best defense against the curve balls is to truly love what you do. If you really don’t like real estate—and if you’re in it only for the promise of big financial rewards—then you’re probably in the wrong business. The hours are long in this industry, and there’s a lot of disappointment and uncertainty that comes with selling homes. But if you love it, and if you’re willing to put in long hours, it’s a great profession.  

Rosa Nell Hammer is a broker-associate with The Keyes Co./Realtors® in Miami Lakes. In real estate since 1967, Hammer and her partner, Allan Pelaez, sell about $10 million in South Florida properties annually.