By Rich Rector, Owner and Chairman of Realty Executives International, Inc.
It’s no question the past few years have been challenging for real estate professionals. The good news is we are starting to see a break in the clouds as many markets across the country begin to take a turn for the better. According to the National Association of REALTORS®, existing home sales are up an average of 3.4 percent from this time last year and the national median existing home price jumped 10.1 percent. And that’s just the real estate industry.
From a broader perspective, national unemployment rates are down a full percent from last year and payroll job gains are expected to be up 2.1 million this year. With improved job projections, that gives us great hope that there are more people looking to purchase homes. Distressed home sales are down 9 percent from this time last year, while 30-year mortgage interest rates are at approximately 4 percent, making homeownership more attainable.
Now, all of these stats aside, there are concrete systems you can implement in your real estate business to find success regardless of the economic environment. I’ve recently launched the latest E-Myth book, which I co-wrote with internationally-acclaimed business expert Michael Gerber, titled, “The E-Myth Real Estate Brokerage.” The book serves to provide real estate professionals with a guide to succeed in any financial market and provides comprehensive systems that can be tailored internationally.
The first system that’s important to establish is a money management guide. According to Gerber, there are four types of money: income, profit, flow and equity. You must first develop a turnkey system, which is a systemized process that allows income, profit, flow and equity to be produced without constant supervision, requiring that everyone is properly trained in order to produce the same results. By systemizing your finances, you can prepare your business for success without getting bogged down by the daily financial grind. This will also help free you financially from market fluctuations.
The next crucial system for a successful real estate business is planning. Any business requires goal setting in order to reach a level of happiness. In my businesses, I develop viable, long-range and short-range action plans to map out my goals for the following year and years to come. At Realty Executives, our first step is to review what we have accomplished over the past quarter and determine what action has been taken based on our previous goals. Then we address five major goals for three years out and also the next calendar year. Finally, we pinpoint three to five aspects that are most critical for the upcoming quarter. And the most important piece of all of this is accountability—making sure someone is responsible for measuring and handling the actionable items on each goal.
Your pricing structure is also critical to an effective business and its success. There are a few basic models for real estate brokerages, each with strengths and weaknesses, depending upon what your company’s strategy is. There is no single, concrete “silver bullet” as to how one can have a “fool-proof/market-proof/recession-proof” real estate business, however, it’s important to seriously identify the needs of your lifestyle, business and clients and to determine which systems could advance or decline progress and success based on those needs.
Four states recently have accounted for 58 percent of all sales to foreign buyers. Real estate has become a truly global industry. We must change the way we do business by determining where that audience is coming from and targeting those foreign buyers in our marketing efforts. Take advantage of the tools you have access to as well as a variety of new ones. Social media, email marketing and old-fashioned networking are just a few of the lower-cost means we all have available to us.
The final piece to the systems puzzle regarding the real estate industry is staying abreast of technology advances. Many potential homeowners are now using their cellphones or other mobile devices as the first step to inquiring about purchasing a home. It is essential that you “meet” them there.
Lastly, it’s important to address the necessity of family support. Knowing that you have a “safety net” of moral support from family and close friends can inspire you to have the confidence to move forward and press on with your business, no matter how challenging or successful.
For more information, visit www.RealtyExecutives.com.
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