Sales Clinic: Preparing for a Slowdown

When times get tough, the smart practitioner gets creative.

May 1, 2001

There are so many signs of economic slowdown this year. How should I prepare my business to be ready if real estate sales slow, too?Frank Di Tommaso, Coldwell Banker Di Tommaso Realty, Staten Island, N.Y.

Having a strategy ready in case sales slow is smart business.

The best way to make your business recession proof is to find creative ways to get deals done. If the standard formulas don’t work, think outside the box to help buyers and sellers solve their temporary economic difficulties. For example, when high interest rates in the 1980s put real estate in a slump, we persuaded sellers to offer land contracts or other forms of seller financing that would help buyers who couldn’t handle the 18-plus percent interest rates. Land contracts were a great option for sellers who didn’t need all their equity at once, and they helped us make sales at a time when many companies couldn’t. It may be tougher to keep up your sales volume in slow economic times, but if you’re creative and you have a plan, it can be done.

Also, be on the lookout for new sources of business to boost your sales volume. In slow economic times, my foreclosure department is my busiest and most profitable group (see next question).

How can I maintain a healthy inventory of homes at a time when properties are selling within hours of being listed?Bill Renaud, Royal LePage, Ottawa

Prospecting, advertising, and contact management aren’t the only ways to get listings. Be creative.

One source of listings that I’ve found profitable is foreclosures. With the economy cooling and consumer debt high, owners with financial problems may be trying to sell and be glad to have your help. Check the legal news section of your local paper for bankruptcy notices. You can also get business selling already foreclosed properties for banks. Contact bank loan officers about opportunities in disposing of their REOs (real estate owned). Other life changes—death or divorce—may also require sales. Get the word out to attorneys about your services.

Another way I guarantee I’ll always have listings is to use a trade-in program. I offer up to 80 percent of the home’s value if sellers buy another one through me. This is a good deal for sellers who want to move quickly. And it really gets the phones ringing. Even if sellers don’t want to accept my trade-in value, it gives me a chance to get the listing. I repair and update the houses I do buy and then sell them for a profit.

A variation on the trade-in idea is a guaranteed-sales program, which gives sellers the option of cashing out of their home if it doesn’t sell in a specified time. We list the home at a top market price and then automatically drop the price a certain percentage every few weeks if the property doesn’t sell. If the home isn’t sold by a certain date, we buy it at the lowered price. A guaranteed-sales program is great for sellers who have time to see what the market will bear but who want the security of a guaranteed sales. Just like the trade-in idea, a guaranteed-sales plan is a great way to get the phone ringing and to set yourself apart from the competition.

What’s the best strategy for pursuing expired listings?Christopher Artur, Artur Realty, Philadelphia

I pursue expireds the same way I prospect for other listings. I start my activity on the day the listing expires—but never before it expires, which would be unethical. First I send or drop off my prelisting kit, which has a personal brochure, a video about me and my company, my résumé, my company’s mission statement, and recent articles I’ve written for local or national media.

Then I call the sellers. If I don’t have immediate success setting up an appointment, I add the sellers to my regular calling schedule and make contact about once a week. The best time to make those calls is at night or on weekends, when people are home.

Twice a week, my office has a call night. Several sales associates get together and call, call, call. We always have fun with it and order pizza and pop.

It makes salespeople more motivated and productive to prospect as a group.

Roberts, of Ralph R. Roberts Real Estate Inc., is a Warren, Mich.-based practitioner. He's been in the real estate business for more than 20 years and has sold about 500 homes per year for the past five years. He's also author of the book Walk Like a Giant, Sell Like a Madman (New York: Harper Business, 1997).

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