From REAL Trends, the trusted source for real estate industry news and trends, this is REAL Trending Episode 74. We’re analyzing the most important trends affecting brokerage companies and their agents. I’m Steve Murray, President of REAL Trends.
Today we’re discussing the importance of focus, technology and growth, and the coming recovery. What do these trends mean and how can brokerage firms best take advantage of them? So let’s address the importance of focus. For many weeks now, and actually for many years now, we have been recommending to brokerage companies the sole focus of recruiting talent, developing talent, and spending less money than you have coming in.
Now, those are more true today than ever before. But for the last four or five weeks, as we deal with the pandemic and what we knew would become a slide in real estate sales, we’ve tightened that even simpler for brokerage leaders, and for agents, to just two things.
One, get closer to your people. If you’re an agent, get closer to other agents and your customers and clients. Now, it goes without saying, we recommend that men and women, whether they’re brokers, or teams, or agents, first and foremost, they should get closer to their friends and family as their number one primary focus.
But if you’re a brokerage owner or operator, to get closer to your people than ever before means just that. And what we’re hearing and seeing from brokers all over the country with whom we’ve communicated is that’s what’s happening, is leaders are spending more time, Zoom calls, Google Hangouts, phone calls, emails, text, and believe it or not, telephone. They’re all useful ways to get closer to and stay in touch with your people.
In fact, we’ve come out with a special new offering that will be available shortly, through Realtrends.com, of the guidebook. Simple, easy steps to use communication tools, and technologies, and time and effort to get closer to your people. For agents, the number one thing we recommend right now, if you can’t do a lot of showings, and you can’t drive buyers around, and you don’t have as many buyers and sellers interested in conducting a transaction, what a great time to reestablish relationships with your past clients and customers.
Again, text, telephone, CRM, housing market information, and just the plain, old-fashioned, “Hi, how are you and how is your family?” as an outreach to get closer to clients and customers if you’re an agent. So the importance of focus right now is get closer.
Number two, preserve cash. Cut all unnecessary spending. If you have access to the PPP program or other benefit programs for independent contractors, if you’re an agent, please be sure, look them up, and find out how to access and how to apply. The benefit is there for both brokers and independent contractors.
And as you may know, by the time you’ve heard this, they have reloaded the Paycheck Protection Program from the federal government with another several hundred billion dollars. Focus on getting closer to your people and preserving cash.
Number two. Lot of commentary over the last 10, 15, 20 years about how technology is causing some firms to grow and others not to grow, or how technology is causing consolidation, or how technology is rearranging the deck chairs, if you will. Well, we have this comment. Just like we have said for a long time, having a great national or local brand name is very valuable but not the most important valuable asset or attribute.
We have the same commentary about technology. Yes, do you need technology? Well, today, we’re finding out that communications technologies are hugely important. We’re not saying that having transaction management is unimportant, or CRMs, or a great functioning website. They’re all important, but they are not the most important attribute of successful brokerages.
We just did a snapshot look, for instance, at the top hundred brokers in the country, going back five years. And we compared, we looked at one factor. How many deals per agent did these top hundred firms do five years ago versus today?
Our initial review of the data suggests that less than 16% of the top hundred actually saw an increase in productivity among their agents in the last five years. That’s 16%. One in six had an increase in agent productivity over the last five years. And these are the top hundred brokers in the country, regardless of model, or brand, or region.
What does this tell us? One thing we know. The top hundred firms in the country have probably been those spending the most money on technologies, and shifting from one CRM to another, and one website provider to another, and apps to other apps, or adding apps, or adding new technologies. Yet it is not showing up whatsoever in agent productivity. Not whatsoever.
We’re not saying technology is unimportant. We’re saying there is something else at work here that’s causing some firms to perform far better than their peers. It’s clearly not technology, and it’s not the most important when you talk about your brand name. Other research we’ve done tells us that agents like to have a powerful national or local brand name, but again, with that agent and team survey we did just two years ago, it was not the most important thing to them.
What is most important? I think we are going to find out through this time with the amount of energy, and time, and effort that leaders are taking with their agents, and management teams, and staff to communicate over and over and over again.
I think we’re going to find out the secret to success is those leaders who will dedicate the time to build relationships and communicate with their agents, and to help train and educate and lead them through these tough times. That that, in fact, is the single most important factor driving every metric in our industry.
Lastly, the coming recovery. Yes, we’re going to have a recovery. There’s no question about it. We’ll have record low mortgage rates, and once they fix the back-office problem in the mortgage industry caused by forbearance, we’ll have abundant mortgage capital at some of the cheapest rates in the last 50 years.
There simply doesn’t seem to be any question about that. However, we’re going to have somewhere between 22 and 30 million Americans out of work by the end of April. These people, fortunately, have fairly decent state and federal unemployment benefits to ease the strain of having lost their jobs. On the other hand, we have the Paycheck Protection Program and other benefits that are helping keep people on payrolls.
But ladies and gentlemen, friends, you can’t flatten the tourism industry worldwide, the retail industry in the United States, the energy industry in the United States, the travel and convention and sporting industry in the United States, and the airlines, and expect that this is going to be a quick recovery.
Once we start to come out of this, there will be a recovery, and we will see annualized rates of existing home sales start to come back slowly but steadily, perhaps even as early as June, continuing for the rest of the year. But there’s a lot left to be done with this pandemic before Americans are going to adjust, go out, and radically increase their purchase and sale of housing.
One of the interesting bright spots in all this, I will tell you, is brokers who have businesses in rural areas report to us that their business is booming. It appears that some people think it’s a good idea maybe to move away from the metropolitan areas to more remote areas where they feel safer, sufficient that they can get Wi-Fi, of course.
But ladies and gentlemen, we will come back. It will begin probably this summer, and it will be a slow, steady recovery for the next six to 18 months. But it will come. Do the right thing today. Reach out to your clients and customers, if you’re an agent or a team. And if you’re a broker, get close to your agents. Because those who do those things now will benefit greatly in the coming recovery.
Learn more about industry trends and successful tactics for brokerage firms, agents and teams, as well as listen to past REAL Trending on Apple Podcast, Spotify, Google Play, and others. Visit www.realtrends.com/channels. This has been Steve Murray, praying for your safety and your health.