On this 236th episode of my Monday Morning Pep Talk, I will give insight into the topics of conversations I'm having with real estate brokers in my market and across our country and Canada. These conversations range from the changes they are seeing in the industry to how buyers and sellers are reacting to industry changes and hyper-local market trends. With the dynamic shifts coming from all directions, successful brokers are starting to make changes to adjust. Many of these conversations are based on protecting their mindset, health and over all wellness. With that said, today I'll outline my talking points heading into the summer of 2024.
Before I launch into the talking points, I want to remind you of my professional purpose and that is to help you, the broker/advisor, optimize your productivity and help you become the best version of yourself. Why? "Because Happy Brokers Sell More Real Estate". I help you become that by teaching you to handle the challenges and opportunities that you face every day. If you can effectively manage those certain situations that arise on a daily basis in your business, you'll be more productive and live a life that is the best version of you. My ask is that you listen as if you are in a one-on-one coaching session with me in my office or on a phone call.
I'm going to break my talking points into 3 different categories:
- Industry Changes - Nationally and in Hyper-Local Markets
- Areas of Necessary Focus - Summer of 2024
- Mindset Maintenance - Questions to Ponder
Industry Changes both Nationally and in Hyper-Local Market
- Hyper local markets started to reset fully in most markets in 2022 and 2023. Those that didn't are resetting in 2024. During the reset years, builders have proceeded with caution, decreasing their amount of new builds. With that, when the market rebounds, inventory will be lacking new builds for several years thereafter.
- Reset = a standoff between buyers and sellers ended and buyers came back to the market with confidence. In Chicago, in some low inventory markets, we are seeing activity at or above 2021. In high inventory markets, buyers are waiting for prices to drop.
- Inventory is building in markets where sellers see lack of activity. Sellers, who need to sell or want to take money off the table, don't want to miss the top. The transaction behavior in this cycle is tough. Sellers don't want to lose. Buyers are willing to wait it out.
- Baby Boomers are not moving out of their big houses when the kids leave, locking up inventory normally released into the market place. All this, as younger generations are all in on buying.
- Because of the NAR settlement, downward pressure on commissions has arrived, further moving brokers to serve 2 different kinds of clients. One group is focused primarily on fee and the other desires full service provided by their broker.
- Brokerages are under extreme pressure, especially those that have yet to settle. Changes to broker business models will start to change dramatically in the next 12 months.
- Based on many predictions, the number of brokers in the market will decrease. The barrier of entry will continue to get tougher.
Areas of Necessary Focus - Summer 2024
- When entering an agency relationship with a buyer, if you are not doing so already, you must start to execute an initial consultation, get your buyer agency form signed, communicate your value and set expectations for the current market. Hold firm to your personal baseline commission.
- When you are entering a listing agreement with a seller, clear expectations must be set on price and market conditions. Many sellers want to come out at the high end of the range so make sure you have built in price drops if "their price" keeps them as the only bidder on their property. Make sure they are real sellers and not just "market testers." What is their motivation for selling? "I don't need to sell unless I get my price." (red flag)
- Focus on building a robust warm list. Those agents with the largest warm lists nurtured authentically and appropriately over the course of time will win.
- Go into every listing presentation, knowing approximately the late 2019, pre-Covid price on the home. Motivated sellers need to be reminded that they are playing with house money. A seller does not want to follow the market down.
- In Q3, once we've caught our breath, the focus needs to shift to those large projects in our business that need attention. Yes, your off season focus needs to start moving toward 2025. All current production is normally impacted 6-9 months prior.
- Read, listen, learn, get coached this summer. Skills improvement will never be more important than during Q3 and Q4 of 2024 if you want to thrive in 2025.
Mindset Maintenance - Questions to Ponder
- Are you grinding at an unsustainable level? Is it because you are trying to validate your fee?
- Are you working smart? Are you re-inventing the wheel with every transaction?
- How are you doing on your health and wellness goals? Did they take a back seat this spring?
- Did you say "yes" to a client that you know that you should have said "hell no" to? What are your boundaries?
- Did you build in any travel over the last 4 months? What is scheduled on your calendar for the summer?
- What expectations have you set for yourself? My advice is to go into every deal knowing that it will be challenging. If it's easy, that is gravy. Why do we question ourselves when a transaction is tough? There is a reason real estate brokers get paid the fee we get paid.
You've got a Memorial Day weekend coming up and my wish for you is that you'll be able to take some time to think. Thinking in silence is so underrated. There will be many questions you'll need to answer this summer. The month of May, in most markets, is full of so many emotions as the rubber meets the road every day. I'll address many of these talking points this summer on my MMPTs. Meanwhile, take a breath. The weather is improving for those of us in the upper 1/2 of the US and Canada so it is a perfect time for you to reset and prepare yourself for many good things to come. Real estate brokers are resilient and if you've gotten this far into this episode, it's means you're interested in growth. You'll be ready.
Have a great holiday weekend.
