Another year has ticked by and a fresh start is right at our fingertips. While 2007 proved challenging to some in the industry, others pushed forward with even more determination for success. What can you do in 2008 to make this year a winner? Read on — we’ve picked the brains of some of the most successful real estate professionals in the Chicago area to find out how you can make this year one of the best yet.
By K.K. Snyder
January 1 typically finds us all vowing to change or improve something, whether it’s a personal goal or one focused on family or career. And while many of us come charging out of the gates after the holidays, our efforts often lose steam within weeks. But charting a course for success can be the answer you’ve been looking for. A set of directions that can keep you focused on meeting the challenges today’s market poses might just be all you need.
It would appear that most of the suggested “secrets to success” in 2008 aren’t actually secrets at all, but rather tried and true methods for increasing your client base and, ultimately, sales. And what could be more basic than a business plan? Yet, this is exactly where many of our experts swear success begins.
“We write a business plan every year and we follow that business plan. By the fourth quarter we begin looking at it for the upcoming year to find where we are on our goals and where we need to revise the plan,” says Debbie Carmichael, a Realtor with Realty Executives, Fox Valley Geneva, and half of the Carmichael Soumar Team, ranked No. 1 in Northern Illinois in 2006. “I can’t see a realtor being successful without a business plan.”
In addition to the plan, Carmichael scrutinizes everything from the value of paid memberships to the strength of her Web site for bringing in new business. She also constantly interacts with her target area by sending out direct mail pieces and collecting feedback on what is happening, even when the market slows.
“The worst thing you can do is give up, especially if you’re farming an area. Potential clients need continuity; you can’t just disappear. They need to hear from you every month. They might not need you next month, but perhaps they will in six months,” Carmichael says.
Carmichael also considers what she’s spending on advertising, where she is placing that advertising and how the return on the investment affects overall sales.
“We spent more on advertising in 2007 because of what was happening in the market. We countered with a positive message to the area to offset some of the negative media,” she says, noting one particular mailing that helped Carmichael and her partner sell eight homes in the month of November. “It had a home with a sold banner across it and said, ‘So everyone is saying the market is slow … Oh, really?’
“People want to talk to Realtors who are selling things, not Realtors who are trying to find a part-time job because they have to,” she says. Downtime in her office is spent on a number of tasks, including a review of their current advertising to ensure she is sending out a uniform message, regardless of whether it appears online, in a newspaper or magazine ad or on a direct mail piece — all a part of her focus on brand awareness.
This year will bring education to the top of Carmichael’s list, especially Internet knowledge and Web site development. Recalling when the MLS first became available to Realtors in the late 70s, Carmichael points out that today that information is available to everyone. “It’s no longer the treasure chest it once was; anybody and everybody has that information today. It’s a good thing for Realtors to have clients that are knowledgeable, but the expectation of our clients as to what we should provide is much higher than it used to be. We have to be professional, more knowledgeable and able to take all that information from the Internet and use it to our clients’ advantage.”
Carmichael anticipates both buyers and sellers adjusting to the current market, accepting the changes and beginning to move forward slowly. She says townhouse sales have begun picking up, and the last six months of 2007 saw consistent sales of homes in the $225,000 to $300,000 range, which she believes will continue this year.
“I think Americans, especially in the Midwest, are more conservative, so we’re not to the extremes they have on the East and West Coasts. Our jumping back into a more active market is less than a jump.”
Like other seasoned veterans in the industry, Carmichael believes many in the profession don’t take the job seriously and look at it strictly as a money-making venture. Those are the agents who tend to panic the moment the market takes a turn. “You have to stay focused on the positive and a lot has to do with the individual — is the cup half empty or half full?”
Being knowledgeable about the business and having leadership abilities will help agents keep their clients steady in a rocky market, especially when agents are competing against For Sale By Owner properties and real estate Web sites, she adds. Also, surrounding yourself with a group of trusted, professional suppliers, such as a reputable mortgage company, will reassure your clients that everything you do is above board.
“It’s important for Realtors as a group to improve our reputation and value in the industry. It’s going to be up to us to change what the general public sees a Realtor’s value as being,” she says, adding that it all begins with the business plan.
“It’s more of a monthly thing in this market,” says 30-year real estate veteran Ted Mazola, president/CEO of New West Realty, regarding his agents’ business plans. “We do monitor [plans] a little closer than once a year, but it’s a combination of things we do at different levels.”
Business plans get scrutinized at a deeper level when preparing for an upcoming year, says Mazola. Quarterly gatherings with brokers and developers are more formal and give everyone an opportunity to discuss projects and what everyone is doing.
“We’re constantly monitoring what product sells where. As a result, we have to look at what’s working and don’t assume we’re going to find one right answer,” says Mazola, noting that the industry is changing not only due to advances in technology, but also because of lack of confidence, much of which sprung up in 2007. It’s a situation he compares to the nightmare market in the late ‘70s.
“[Real estate professionals] are getting hit with such negativity in the media that it becomes a self-fulfilling prophecy,” he continues. “But don’t throw the baby out with the bathwater; plan, monitor and see what works.”
Mazola works with his staff on a personal level to find out their needs, but also relies on the overall synergy and excitement of the group as a whole for motivating the troops. His partner has day-to-day contact with the agents and is great at keeping them motivated and reassuring the newer agents that a slow market isn’t the “end of the world.”
“We tell them that when times are good, they have to be prudent. Just because you made ‘x’ amount of money this year doesn’t mean you’ll make the same next year,” says Mazola, who encourages agents to budget and build reserves. “They need to have the foresight to prepare for the times when things are not good and budget for that … I’m not sprinkling them with fairy dust; they have to be realistic. What do they expect out of the business? What are their goals?”
New West is a huge advocate of agent education and routinely sends staff out of state to “sales boot camp,” which serves as motivation not only for the attendees, but also benefits the rest of the staff when agents return and share what they learned. Most importantly, says Mazola, the company thrives on entrepreneurial spirit and agents at all levels of experience are encouraged to share thoughts and ideas and then are supported when they bring the ideas to fruition.
One of the keys to success is knowing your local market, your local product and your customer, he continues. For Chicago, the planned community will remain a strong product in 2008, says Mazola, who, unlike others in the industry, doesn’t allow the company to become too extended with inventory.
“People are going to start to realize that they can own a home. This idea of renting rather than buying doesn’t make sense. I don’t see rental rates going down,” says Mazola. Instead, he feels location, quality and not being a cookie-cutter product are going to be key in 2008 in Chicagoland, especially condos and new single-family homes.
Existing clients can be key to boosting sales, reminds Mazola. A client to whom you sold a house two years ago is likely not ready to buy again, but perhaps a friend or family member of theirs is in the market. Another way agents can serve their clients is by bringing true knowledge to the table, not just information that can be put on a Web page, says Mazola, and then relate that info to them in a way that let’s them know you are the expert. Coldwell Banker’s Maureen Spriggs agrees.
Selling in an upper-bracket market on the North Shore, Spriggs, a previews property specialist with Coldwell Banker, Winnetka, makes it her business to learn an area before attending a function, an easy way to start conversations with strangers and establish herself as a professional, and an expert, in the industry and, most importantly, in whatever community she is in at the time.
“Network any way you can. Rejoin groups you’ve given up on. If someone at a gathering has a real estate question, whether it’s about the value of their house for insurance purposes or a question about adding on, know the market so you can be the expert.
“If you ask someone what they do, they’ll get back to asking you and that’s your opening,” she says, noting the “FORD” conversation starter in which you ask someone about their family, occupation, recreation and dream. “Ask about these things … you’ll get people right back to you.”
Like most we talked to in the industry, Spriggs is a proponent of formulated business plans. “It’s like the carrot before your nose so you’ll have some direction to go in and a way to get there. Of course, things are going to vary within the plan so be flexible with it,” she advises.
Because it’s such a crucial skill, Spriggs advises agents to develop their listening skills as part of their plan and to practice gathering information from clients by tuning in to family and friends. Becoming more tech savvy should also be part of an agent’s plan for 2008, she adds, suggesting agents read and attend seminars on real estate, sales techniques and technology useful to this industry.
“Buyers today, in all markets, … are tech savvy and do 80 percent of their research online before even calling an agent or going to an open house or driving by a property,” she says.
As far as the outlook for 2008, Spriggs says agents must fully comprehend the 2007 market so they can base their market analysis for sellers on that. She predicts that while there will be some appreciation in the market, it won’t be the tremendous appreciation many sellers are hoping for, certainly not like the market in 2005, which she called the “best year in the business.” She also anticipates interest rates will bring more people out, but not en masse.
“This will be another year where things will take longer and be tougher to put together, but it will be better than 2007,” she says, noting that she closed out sales at only 2 percent under 2006 sales. “We will see rejuvenation, but not abnormal appreciation seen in other areas of the country that escalated too fast in 2007.”
As for her own goals for 2008, Spriggs plans to have a heavier focus on developing more personal marketing. “I want to do more networking because I know that’s the way to develop business,” she shares. “I’m going to go outside my usual circles and go one step beyond.”
Agents who find themselves struggling in 2008 should keep the faith, says Spriggs. “Stay positive and be sure to get to the office all the time and stay in the market. Don’t avoid broker open houses and don’t avoid calling past and potential clients. Instead develop them so that you become their expert in real estate.”
Other suggestions our experts offered are furthering education or designations, cold calling, reworking marketing plans and goals to keep them current and updating agent Web sites and other technology. Also, agents should be involved in things outside real estate, whether it’s a school organization, sports team, museum or place of worship.
For many, 2008 will be a defining year — a make or break year. Those who straddled the fence last year may decide this isn’t the career for them. And others will dig their heels in even deeper, determined to ride this market out. In the end, those who prepare for 2008 using tips provided by these local industry experts will likely be the ones on their way to find success.
Realty Executives Fox Valley Geneva
New West Realty
Coldwell Banker, Winnetka