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Key takeaways:
- Brokers can still help agents succeed in such a volatile market by helping them through mentorship and providing the right technology.
- Working together is a key way to help build newer agents’ skill sets and foster a close-knit brokerage
- The subject of iBuyers is one of contention among brokers, but these tech-based brokerages are flush with cash and partnering with them can help agents succeed.
Low inventory has been an ongoing issue for the housing market, especially since 2008. The lack of new construction and investment has caused an estimated housing shortage of around 5.5 million houses since 2001.
This, along with the decreasing affordability of houses, is creating a challenging issue for real estate agents and brokerages as they work to close deals among competitive offers. The fluctuation of the market and the work required to sell homes in such a market might feel like a setback to new agents. It can be frustrating for agents, and brokers feel that frustration as well as trying to help new agents close deals. The current market calls for some creativity and outside-the-box thinking.
Recruit Experienced Agents to Help
The median experience level of a real estate agent in the marketplace is eight years, meaning most agents working today have never experienced the volatility of the current market, says Dave Conord, president of eXp Realty, North America.
“A very high percentage of today's agents got into the business after 2010. Those agents don't know anything but an improving market. They haven't had to worry about a lot of things—they haven't had to practice some things to generate more business. They've had different challenges, but not some of the challenges they may be facing now or maybe facing in the near future,” Conord says.
Reassure agents by creating mentorship opportunities between those who have weathered the market shifts, including the one in 2008 and even the sky-high interest rates of the ’80s, to help newer agents build important skill sets and foster camaraderie in the office. This, says Conord, is one of the main goals of the Level Up initiative at eXp Realty.
“Those that went through the ’08 recession really had to sharpen their skills because it was the toughest it's been in the industry in a really long time,” he adds.
Rising interest rates and low inventory might not be the same issues that were faced in 2008, but those agents who made it through the recession cultivated resilience and used creativity to see themselves through. Passing along this knowledge and grit might provide those who are younger in the business with hope and a way forward.
Bridge the Technology Gap
Technology can be an incredible resource for agents to learn about new strategies, updates and ways to streamline their processes. However, it can be overwhelming for agents who are used to doing things one way.
Nick Ron, CEO of the tech-based brokerage House Buyers of America, has seen the power of technology firsthand.
“You have to get really good at technology,” Ron says. “We're really big in technology. We use it everywhere in our company and trying to automate things and streamline things and you need that to free up your time. Good agents are really good at technology and a lot more efficient.”
Bridging this technology gap can involve partnering with tech-based brokerages that work mostly online, jumping on viral social media trends and simplifying their processes with automated programs.
Leverage Social Media
By now, the use of social media is a given, but now is a good time to check in with agents and make sure they’re really using these free marketing channels. With millennials clearly being the biggest group of home buyers—and staying so as the largest living generation—understanding the ever-changing social media culture is more relevant than ever.
A survey by the Harris Poll showed that 73% of millennials use Instagram and 80% use Facebook. An even more surprising number? 99% of millennials begin their home search online. Some of them are even buying homes they found on social media. Home buyers and sellers are looking for more confidence in this uncertain market; having a trusted voice on a platform they’re familiar with can help set your agents up as credible sources.
Although TikTok is the newest social media platform, it has quickly solidified its role among the social media giants as a place where people can be casually creative while passing along information quickly. Other platforms have followed in its footsteps, prioritizing video content and easy-to-copy trends.
Creating content on social media to advertise and educate can involve a learning curve, but it doesn’t have to. Recruit a social media–savvy agent to run a top-level workshop on the basics of running a social media account. Are your agents shy in front of the camera? Take a day for them to practice recording videos or create a challenge that everyone can get involved in. Social media strategy isn’t something you nail down right away, and it often takes trying different approaches. The National Association of REALTORS® also offers many resources for harnessing social media.
Automate to Increase Efficiency
Market shifts are a great time to guide agents through reviewing their process from lead generation to close. Where are your agents spending the most time? Taking a week or two to track time can illuminate problem areas. This is an area that can hugely impact the efficiency of your agents.
Instead of wasting their time and energy on administrative tasks and lead follow-ups, they can home in on building personal connections and testing out new, creative ideas for getting leads. Utilize programs for electronic signatures, automated lead generation, workflows and management tools to help reduce the mental energy needed from your agents.
Partner With Tech-Based Brokerages
The option to sell to an iBuyer can be a powerful tool to boost an agent’s business. A recent study of nearly 1,000 homeowners showed that 65% are open to selling their home to an iBuyer. But they don’t want to go through the process without knowledgeable support. The survey showed that 72% would still want to work with a real estate agent when selling their home to an iBuyer.
Ron emphasizes this synergy between tech brokerages and local real estate professionals. House Buyers of America purchases a variety of home types, including dilapidated houses that require renovations. Using cash to buy these homes and fix them up is one way House Buyers of America is adding inventory back into the market.
But this doesn’t leave agents on the sidelines; they play a significant role in the brokerage’s business model. Agents are responisble for selling the renovated homes. They also refer House Buyers of America to houses that are on the market that would be a good fit for the business’s portfolio, earning a commission.
Divvy similarly helps agents close deals with cash offers. As its focus is on those who aren’t mortgage-ready, Divvy is using a rent-to-own model.
“Agents are now able to earn a buyer's agent commission on somebody whom it might have taken years to do that before, and they know they're setting buyers up for a product that actually helps them to get to homeownership,” says Lucia Franzese, chief revenue officer of Divvy.
Heather Stotts, team leader at The Hustle and Heart Group in Largo, Fla., said her team has closed on over 100 Divvy homes.
“My team is in one of the hottest markets in the country: Tampa Bay,” says Stotts. “My buyer's agents were writing 10 to 15 offers per buyer just to hope one stuck. Renting was a nightmare, too. There just wasn’t anything to rent.”
With Divvy, a cash buyer, Stotts says her buyers and tenants have a new way to compete, as buyers often accept cash sales over both traditional and government-subsidized mortgage programs.
“Over the next few months, we closed more and more [transactions], finally becoming one of the preferred teams in the Tampa Bay area,” Stotts says. “We’ve closed over 100 homes using Divvy Homes. We have started having tenants buy the homes back from Divvy, and they say the process is seamless.”
The market’s current unpredictability can be intimidating, but it can also become a catalyst for success if you’re able to reframe and reposition your team. “What we’re looking to do as we drive forward into an uncertain market ahead is to help agents see it as an opportunity,” says Conord.
Ron agrees, pointing out that whenever there's a challenge in the market, agents who get creative are the most able to capture a large amount of the market share. The skill sets that your agents gain as they weather this low-inventory period will help them become top-performing agents no matter how active the market is.