Last year may be remembered as a year of housing volatility. Although times have been challenging for some agents, CINC talked to two expert real estate leaders about the benefits of perseverance and continuing to generate real estate leads and build client relationships, even when interest rates are up and sales are slower.
"Our showings, listings, and contracts are down 30%. But as I tell my agents, if you’re a winemaker, you know not every season is for wine, but every season prepares for the harvest. Right now, we must decide what vines need to be watered and what nutrients we can add. If you’re not caring for your vines, you're not creating your future. As interest rates go up, everybody gets scared. Many agents are running around complaining, but right now is the most important time to build your winery so that when it's time to start producing wine, you've got the best grapes possible. You have to be thinking long-term even now.
We always want instant gratification. The truth is, if you're looking for commissions today in the real estate world, you will struggle. Long term, you need people that aren't going to transact for six, nine, twelve months, or even more. Internet leads aren't always instantly gratifying. Did you know that only around 2% of leads close within 12 months? That means 98% of people will say no, but you can find two or more from that same 98% in a year or two. In year three, the same thing might happen. If you look at that in terms of conversion rate, it reflects 5 or 6% for internet lead generation over time.
You have to think of it as a long-term play. There are always a million different reasons that people don't want to buy or sell yet. Sometimes a lead comes from an impulse click before logic reminds them to wait until some important life or income change happens. There are five main reasons that people buy and sell real estate: family size changes, changes in job/income, health, births, and deaths. Our job as agents is to stay in front of as many people as possible so that as soon as one of those events happens, we're the first person they think of. We don't know when that moment will happen, so you have to be consistent in your follow-up so that when they need you, you’re there.
We have to understand the fear around the market we're in. We saw the same thing when COVID hit, but then look at what happened to the real estate market right after. It's simple economics; there were not enough houses for the number of people born and households created, so we had a crazy run-up of value. Nothing like that has changed. The demand has artificially decreased by raising interest rates, but what do you think will happen as soon as they lower interest rates? Every buyer will jump back in, and every seller who didn't want to sell because their mortgage was at a really good rate will let go of that house to move where they truly want to be.
If you bought a home in 2020 when everyone was scared, how do you look at the value of your house now? You pushed through the fear that held everyone else back. If you buy today with a 6% interest rate, what happens in six months or two years when rates go down? You refinance. But what does every other buyer do? They come rushing to the market, face a run-up in competition, and struggle to get a property because everyone's back in the market. All you're doing is refinancing. On the other side, if you buy today at 6% and two years from now, the interest rate is 9%, you’ll feel pretty good. Whether interest rates go down and you refinance or interest rates go up, either way is a win. Helping people understand how fear can help make or break their decision is key to being an effective agent."
"Real estate doesn't change. It ebbs and flows, and it always will. But, like the ocean, it's always there, whether the tide is receding or coming back in. Somebody's always moving for work, having a baby, or downsizing. We are blessed to be in Charleston, where many people come from other areas. But regardless of where you are, it doesn't matter what's happening in the economy. For example, when somebody gets a new job in a new city, like Charleston, they're moving to Charleston. Even if they're moving here to rent, we'll take that. Because if they keep that job, they will buy eventually.
We launched our brokerage during the pandemic. Agents were crying on the first team call because they thought their careers were over. The world was quiet for a period, but when we look back at the numbers, it's barely a blip in our productivity. We reminded everybody that the job is to meet people, not to make somebody buy a house, and not to convince anyone to buy right now. The job is to work with people and be available to them.
Truth be told, the difference between a 3 or 4% interest rate and a 6% interest rate is not really that big at the end of the day. It might be a $50,000 price point in a home, but we know plenty of people who have lived through 15 and 20% interest rates on buying their home. I believe much of the talk and controversy can be attributed to the media creating things to talk about. People are moving. People are buying homes. That hasn't changed, and it’s not going to change."
More High Growth Real Estate Lead Generation Success Stories for further reading:
-"How #1 KW Team in FL Built Business on an All-In-One Real Estate Lead Generation Platform"
-"From 0 to 30 Sold Homes in Year 1"
-"How I Grew from 6 Agents to 170 in 4 Years"
-"Ditching Corporate Rat Race to Start a Successful Real Estate Business"
Additional Real Estate Lead Generation Resources:
-"Guide to Real Estate Google Advertising That Works"
-"Guide to Buyer Real Estate Lead Generation That Works"
-"Google Buyer Real Estate Lead Cost Report"
-"Google Seller Real Estate Lead Cost Report"