Lead Generation, Lead Nurturing, News, Real Estate CRM, Real Estate Marketing
Your “Wait-and-See” Approach to the Market Shift Could Cost You
It’s no surprise that the real estate market continued to cool over the summer with July pending home sales dropping 1% from June, falling in three of four major regions, according to the latest report from the National Association of Realtors. This was the eighth month out of the last nine and the second in a row pending home sales have fallen. Pending transactions fell almost 20% from 2021 volume as well. Realtors don’t need NAR’s report to tell them that the market has shifted rapidly over the last several months. Most are seeing it play out in real time as limited inventory in lower price ranges is stymying transactions. The numbers only confirm what they’ve been experiencing in the market amidst sweeping layoffs across the industry, including Compass and Redfin among others.
Many real estate agents are taking a “wait-and-see” approach to making business decisions, looking for cost-control measures, pulling back on marketing spend, and delaying significant purchases like investing in a new CRM. While understandable, this approach is misguided for a number of reasons, not the least of which is its short-sighted perspective on business strategy and the market as a whole. In fact, now is a critical time to be investing in your business. Moving to a better solution and doing the work to implement a new system may seem overwhelming, risky and expensive in a shifting market, but it could be costlier not to because the status quo simply isn’t going to cut it anymore.
The Trouble with the Status Quo When It Comes to Real Estate CRMs
It’s often easier to stick with the familiar in times of uncertainty. There’s a measure of comfort in staying with what you know, even if it’s not delivering the results you expect. It’s safer. But if you’ve been looking at other CRMs because the one you have is not moving the needle enough for your business now, it’s certainly not going to help you in a market where transaction volume is down by 20%. It’s not going to help you early next year when home sales are expected to rise, and it’s not going to magically change things three years from now when we’ll face a whole set of unknown market factors.
Even more, if you don’t have a reliable software system in place at all to help you track and manage your leads, working smarter through the market shifts should be a top priority. That means implementing a cutting-edge real estate lead management software that can help you focus your team on the most viable opportunities, improve productivity, and streamline the resources you have.
“This is a new pillar of business you should be introducing to supplement the 20% or more of transactions that have disappeared over the last year,” said Brandon Hedges, Sierra Interactive COO, licensed Realtor and founder of The Barker Hedges Group in Minnesota. “This isn’t an expense. It should be seen as an investment in your business to create another income stream with clear ROI.”
Plan Ahead to Capture Market Share
The days of houses being on the market for a matter of hours and selling above market rates on an all-cash offer are gone. The fact is, Realtors are going to have to work harder (and smarter) to make the same amount of money they have over the past couple years. That means getting back to the basics of consistent lead follow-up and nurturing, low-cost lead generation, holding more open houses, and using creative strategies to find seller leads in low inventory areas. You’ll need tools to help you do that. Moreover, the added pressure is going to drive the marginal players out of the market leaving the savvy real estate agents left with an opportunity to capture more market share. The market will contract and by being prepared, staying the course and investing now – rather than holding off for several months – you can capitalize on your competitors’ lack of foresight and strategy.
“The market is slowing down, and you’ve probably got more time on your hands wondering what you should be doing,” said Hedges. “Spend it wisely, and plan for the future.”
CRM for Real Estate: Necessity, Not Nice-to-Have
If your real estate business is driven mostly through lead generation, a real estate CRM is a necessity (and so is a top-notch, high-converting real estate IDX website). A centralized workspace to capture leads and automate your communications is critical to your business. It can take 12-18 months to convert a lead sourced through pay-per-click (PPC) advertising or from your website, and that takes a CRM purpose-built for the job. (And, by the way, agents should be investing in PPC now as a way to create new long-term revenue streams.) Although higher-cost lead sources tend to convert quicker (think: Zillow or Realtor.com), those leads will also require more coordinated follow up using tools in your CRM like action plans and automations as the market cools.
A real estate CRM might feel like a nice-to-have if your business is mostly referral-driven. But a CRM isn’t just for managing relationships with leads; it can also support purposeful, consistent communication and relationship management with your referral sources and sphere of influence. Moreover, in a market like this, you’ll need to ask yourself whether you can rely solely on referrals as the market shifts. You also have to consider how much you’ll have to spend on marketing like parties and events to get those referrals. As you look ahead to the next quarter, next year or next three years, you need to determine what kind of investment it’s going to take to keep your referral pipeline flowing. The more time that goes by without sufficient referrals, the closer you get to being out of business. Suddenly, investing in a CRM to help you manage those relationships doesn’t seem like such an extravagance.
While a wait-and-see approach feels safe, it’s not going to do you any favors in the long run. Creative and savvy Realtors will use slower markets to capitalize on opportunities now and make decisions to accelerate toward longer-term goals. In a market where you’ll need to work 20% smarter to maintain revenue, what are you waiting for?