You Have to Think Long-Term to Last

Commentary by Kelle Sparta
Commentary by Kelle Sparta

RISMEDIA, November 14, 2006?For the last five years, it’s been a wild ride in real estate. We’ve had so many buyers wanting so many homes, that many of us have gotten used to only working with the low-hanging fruit. We’ve become glorified order takers. Now this is all well and fine for those of us who have been in the business for many years longer than the last five. We have the skills to go back and start working for our leads again. But think about this fact more deeply for a minute.

Seventy percent of new agents drop out of the business in the first year. Out of the thirty percent who remain, seventy percent of those will also drop out of the business before they get to year five. That means that only nine percent of the agents who got into the business more than five years ago are still in it. That’s a staggering number. That implies that only nine percent of our offices even know how to find and nurture leads, and for everyone else, order taking is all they’ve ever known.

We’re seeing a mass exodus from the business at this time. Not too surprising really. This is a standard trend in the industry: when business slows down, agents get out leaving plenty of business for us die-hards who tough it out. This is the wonder of real estate. If you commit for the long haul, there will be one. But there is one trend that I’m finding particularly worrying.

Brokers across the country are telling me that they don’t have a budget for training. They are looking at their shrinking coffers and deciding to scale back on the one thing that will determine who lives and who dies in the coming few years. If ninety-one percent of your office doesn’t know how to dig up and nurture business, how long do you think your agents will last?

I agree that something has to give, but training isn?t it. When your people are your income and they are under-educated, then they are the last thing to skimp on. It’s time to take a hard look at other spending. It’s during the lean times that we have the opportunity to look at what works and what doesn’t. When was the last time you actually tracked how many leads came in on each of your marketing and advertising campaigns? When did you last compare your company?s marketing strategy to the surveys that NAR does about how buyers and sellers come into the marketplace? It’s time to put our business hats on.

It’s easy to get caught up in a sense of panic, to go running out into the field to start making some sales yourself to make up the difference in the bottom line. And while this is an expedient solution, it’s not a good long term one.

The holidays are coming. The market will be slowing. Plan to set aside a few days to do a complete overhaul of your company spending policy. Question every assumption, throw out everything you’re doing and start from scratch. Only put those items back in place that are truly producing results for you. Encourage your agents to do the same (partly because they need to, but also to prepare them for the fact that you’ll be making some company-wide changes). Make a new budget based on current income rates. Start focusing on getting the agents you have producing again. And for heaven’s sake ? start some basic, skills-based training programs on lead generation and nurturance. Your bottom line will thank you.

For more information, visit www.spartasuccess.com.

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