By David Hanna
Managing Partner, Prudential SourceOne Realty
President-Elect, Chicago Association of Realtors
In a tough market cycle, some people turn to the media for answers; smart real estate practitioners turn to the pros.
The best Realtors know that real estate markets are cyclical, and they have learned how to tune out all the hype and hysteria on the airwaves. The tougher the market, the harder (and smarter) they work, and are thus rewarded with successful, sustainable careers in real estate. Reach out to agents in your office who are thriving in this market, and don’t be afraid to ask for advice. Many of Chicago’s top-producing agents got where they are today with the guidance of a mentor. It’s important to find someone you can trust and learn from.
The stories below come from Chicago Realtors and CAR members who have spent more than 15 years working in real estate in Chicago, and can offer the “right stuff” for success. They have seen a variety of market conditions, and have learned a great deal throughout their careers.
These veterans know about preparation, relationships and the importance of understanding your market, today. You’ll find 2008 can be your best year if you take their advice to heart and remember what being a Realtor is really all about.
I have been an agent since 1979 and have experienced many types of markets. Between 1980 and 1984, interest rates were at an all-time high (17 percent to 19 percent). Most buyers weren’t able to afford anything; they either had to get an adjustable rate mortgage or the sellers had to be willing to do some creative financing.
Around the end of 1980, the MLS started putting the listings on computers and in books. Back then, there were no monitors on the computers. Instead, you dialed MLS on the phone and laid the receiver in a cradle to connect. Your listings were printed out on a continuous stream of rolled paper. We were very excited about this new technology that kept us abreast of any new or changing listings. This technology really came in handy in 1986 when the interest rates came crashing down to 12 and 13 percent. Buyers who had been waiting for the past five years to buy could finally afford a house, and were literally buying anything with four walls and a door.
Because I’ve been in the real estate business a long time, I know this slump is only temporary. In a couple of years, the market will once again be a seller’s market. First-time buyers and investors should realize that now is a golden opportunity to get a great deal with low interest rates to boot. I, myself, will continue to concentrate on getting listings and marketing them as aggressively as I can. Of course, I’ll be targeting those first-time buyers who have the perfect window of opportunity to buy right now!
—Linda D. Lee, Realtor, Century 21 McMullen Real Estate
I received my Illinois real estate salesperson license in 1991 and immediately went to work as a full-time agent. Interest rates were around 9 percent and the total number of CAR agents was under 15,000. Those numbers are quite different today. Compared with the interest rates of just a few years ago, many might consider today’s rates to be relatively high, but historically speaking, they just don’t realize how much better things are today.
When my parents bought their home in Mayfair Park in 1951, they paid only $16,200. However, at that time, all buyers were required to have 33 percent of the purchase price as a down payment, about three full years of my father’s income. How long would it take to save three full years of your total income? If that were required today, many would never have realized their dreams as homeowners.
It is important to keep things in perspective, and remind your clients there is great opportunity for individuals who are preparing for the next phase of the market cycle.
— Wayne Voegtle, ASP, Realtor, @properties
I’m a past president of CAR, have sold my company and am now back in the trenches. I have been in the business since the early 1960s. I have been through many downturns. This downturn is different than 1990, when we lost 10 percent in my market area, and we recovered 5 percent in 1991 and 5 percent the following year. The only homeowners hurt were those who had purchased in 1988 or 1989 and had to sell in the down market.
Our present downturn will probably take a little longer to sort itself out and for prices to recover and begin to climb again. The properties that are difficult to sell and taking the hardest hit are those that are not updated. It is also hard to sell the two-bedroom homes today; they are really functionally obsolete. There are also other factors that await us in the first quarter. It is such an adventure!
— Cam Benson, CRB, CRS, Realtor, Coldwell Banker Residential Brokerage
I have been in the Chicago real estate business since 1987 and have seen many changes in the market. The great thing about our business is that no matter what the market is, our clients need us. As a matter of fact, they need us more now than when the market is really strong. We seem to forget that around five years ago, the talk was that the Internet was going to take over our business and make Realtors obsolete. This has not happened. It’s a tough market for a variety of reasons, but it’s clear that the public values what we do when we do it well, now more than ever.
The ups and downs of our business are what make it exciting and never stale. In my office we discuss strategies of how to deal with this market. Here are some examples:
• Focus on first-time buyers. Interest rates are low, they don’t want to keep paying rent and they don’t need to sell something to buy.
• Designing a marketing strategy that is unique to each listing. This is not a market that you can put something in the MLS and wait for buyers to come. Dropping the price is not always the answer. Pro- active marketing is more important now than in a strong market.
• Build relationships instead of looking for leads. In a market where the clients are stressed and sometimes scared, it’s very important for them to work with someone they like and trust.
— Tripti Kasal, Realtor, Real Living Infinity
David Hanna is Managing Partner, Prudential SourceOne Realty, and President-Elect of the Chicago Association of Realtors. He can be reached by e-mail at [email protected]
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