I think anybody would agree: This has been one of the toughest years for real estate professionals we’ve had in a long time. Honestly, in some ways, I think 2023 has been tougher than 2008 and 2009 were. At ROOST, we had such a great thing going all the way through 2019, 2020 – and the height of the COVID pandemic.
So, what changed?
About 18 months ago, as we came out of the pandemic, the Fed started raising interest rates. People stopped receiving aid and so forth because of COVID. The money dried up, interest rates went up, and inflation kicked up. Indeed, there was a convergence of factors that directly affected our business. Anytime the Fed raises interest rates to slow the economy, realtors are often the first ones to feel it because it directly impacts mortgage rates.
So, in short, it has been a tough year. As a result of all these changes, I’ve been seeing some of the best agents in the business be off as much as 40% percent this year compared to last year. While perhaps not everyone has experienced a 40% loss, I truly believe most realtors are feeling this in some capacity.
Likewise, almost every broker I talk to is feeling this strain – but trying to focus on their pockets of strength. And, even in challenging markets, these pockets of strength do offer opportunities. However, it’s not necessarily perfect – and there are still outlying factors to consider.
For example, new construction builds are the hottest things around, but it’s still hard for people to move on from a 3% mortgage to a new house with a 7% mortgage. And, until the rates shift, that mentality may not change.
Since this has impacted every element of the real estate industry, I’d like to dig into what each type of real estate agent has been experiencing. We’ve talked before about the four realtor profiles – the deal makers, the disillusioned, the diehards, and the new professionals – and you might even know what category you fall into. Let’s take a look at what this forecast has in store, and what you can expect.
The Deal Makers
The hardest thing for the deal maker right now is earning their client’s trust.
Why? Traditionally, the deal makers have more respect for the deal than they do their clients. They are transaction-oriented, usually want to work at a fast pace, and look to make a lot of sales vs. building client relationships.
I always tell people there are a million ways to be successful in real estate, and being a deal maker does work for some people. It’s not the way I tend to operate, but a lot of agents do gravitate toward this transaction-oriented approach, and do good business. However, my experience is – with deal makers – often, when the going gets tough, the deal makers tend to get a little defensive.
If you see yourself as a deal maker, my advice is that you have to be conscious about not coming across as defensive, entitled, or blaming the world for the struggles.
Have you ever heard the phrase, “Buyers are liars, sellers are worse?” Honestly, I hate that phrase – but I think it’s how we sum up the state of the deal maker these days. I don’t want to dwell on the negative because all four realtor types have their merits, but I’ll never remember the first time I heard that phrase. I was just a few months in as a new realtor and the “Alpha dog” in the office made a point to come up to me and give me that unsolicited truth.
I thought, “Why is he having this conversation with me?” At the time, I didn’t understand, but what bugged me – which I wasn’t able to articulate for myself until later – was how floored I was by the utter disrespect he had for the people he was supposed to be working with.
This sentiment implied that he thought his clients were liars; it rubbed me the wrong way. Looking back, I can only assume that this response was reactionary, caused by the fact that I was having some early success – and he was threatened by that.
However, I will say this: The minute you, as a realtor, start to think the people you’re working with are liars and the worst, that’s the exact minute when you need to take a step back, really think about what you’re doing, and asking yourself “why?”
Why do you want to be in this business? Do you want to be in this business? If you don’t want to work with people, and you aren’t willing to build their trust, maybe it’s time to get out. Even if you’re a deal maker – and even if you still want to focus on transactions – I encourage you to take a little bit of time to earn clients’ trust. That’s how you’ll maintain a steady business.
The Disillusioned
First and foremost, I love the disillusioned. These are realtors who haven’t always gotten the traction they want – or maybe the year hasn’t been a great one for them – but they’re always willing to go the extra mile. The disillusioned are always willing to do whatever it takes. No matter what they’ve been through, at this point in their careers, they are not ready to give up. What they need is a little bit of direction; many of them are in search of somebody to give this some guidance on what to do next or, in some cases, where to begin.
For these folks, it might seem like there’s no balance because they don’t have the practical experience to help them truly visualize or embody what professionalism is for them yet.
My advice is always the same: Prioritize relationships over transactions.
Why? You’ll get to know your clients. The most successful realtors among us know exactly what buyers and sellers they’re working with expect out of their experience.
It’s not just about that perfect house or getting the best possible price for selling their house. You have to be conscious of what they’re looking for in the experience of working with a realtor, either as a buyer or a seller. Then, you have to determine how you are going to meet those expectations.
Whether you’re relationship-oriented or not, if you’re disillusioned and want to be successful, you need a firm grasp of your client’s goals and motivations.
Don’t take anything for granted; collaborate and work with your clients.
Likewise, don’t work separately from your clients. You’re supposed to be a team. Achieving this always comes back to the same thing: Connect, Practice, Track, and Grow.
Focus on making connections, enhancing your practice, tracking your business, and growing your capabilities. I don’t care how tough the market is for others, you will be successful.
The Die-Hards
A die-hard’s biggest strength lies within the strength of their ability to work longer and harder than anybody else.
For many of these folks – who are super successful people – professionalism means being available 24 hours a day, seven days a week, and jumping on any new lead before anyone else does. In my experience, this approach works incredibly well – until it doesn’t. In reality, you can only work and live like this for so long before you start to get burned out. If you don’t have boundaries, you’re going to lose.
Therefore, my advice to the diehards is, thank God you’ve got the strength that allows you to endure, work hard, persevere, and do more than so many other realtors in your market. However, a word of caution: Professionals have to take care of themselves, too – and you have to set boundaries in your life.
My concern about the state of the diehards who are available 24/7 is that they’ve lost respect for themselves somewhere along the way. A 24/7 working life just isn’t sustainable. As a professional, if you can’t respect yourself enough to schedule time with your family, make it home on time for dinner, take a Saturday afternoon off, go on vacation, or do anything else that helps you recharge, you’re not respecting yourself and your needs. Without self-respect and self-care, you will burn out sooner rather than later.
The New Professionals
Regardless of the market, the new professional stays the course. Others panic and falter with their tactics when market conditions change – but those things change all the time.
A new professional’s commitment to their clients – and their profession as a realtor – never wavers. New professionals don’t concern themselves with how business is going to change either in the short-term, the near-term, or even over the next 25 years. Instead, the new professionals focus on the aspects of the business that are always going to stay the same. The focus remains on aspects of the business that are eternal.
New professionals understand how their ability to connect, educate, motivate, coach their clients, and adapt to changing market conditions will always be valuable and in-demand skills; no amount of technology is going to substitute.
Even better, no amount of artificial intelligence is going to substitute for the one-on-one relationship between real estate professionals and their clients. And that’s a big concern for a lot of people: Is technology going to replace me and my job skills?
Don’t get me wrong, I love technology. Technology is great because it will continue to streamline and automate more and more administrative tasks, which are parts of being a realtor. It makes us all more productive, but it will never displace the contributions and one-on-one, belly-to-belly relationships. The ability to form connections, educate others, motivate, and coach are all marks of a true real estate professional. Once you have a handle on these skills, you have nothing to worry about. The market will still ebb and flow, but your business will be fine.
Final Thoughts
Regardless of your realtor personality type, it’s important to find ways to capitalize on the market and carve out a niche for yourself. Connecting with people is key – and that’s what I swear by. Working by referral is a huge win for many agents, myself included, and it’s what will guarantee you’ll have a steady client pool even during the worst of times.
While the work we do is important, it’s also important to ensure you’re caring for yourself and thinking of ways to make this career sustainable. You’ll burn out if you work 24/7, and you’ll get disillusioned if you are constantly focused on the next sale – especially if those sales aren’t happening as frequently as they once were.
Remember, we’re all in the shelter business; it starts with serving people and finding ways to better serve our clients. Whether you just started working together, are considering working together, or have worked together for a long time over multiple transactions, it always comes back to how we play a role in our greater communities. That’s how you start to change the market outlook for any realtor personality type – and that’s how you stay successful in this business.