Less than two months ago, the nation’s real estate markets looked a whole lot different than they do today.
The real estate industry, within a few weeks, pivoted to contactless showings and closings, a pause in buyer and seller interest in some markets, and what seemed like an evolution of lending criteria for clients.
For veteran real estate professionals, developing their playbook of what to do next meant leaning on lessons from the last big economic shock. To learn about their roadmaps for today’s unpredictable market, HousingWire profiled 12 real estate and mortgage “industry warriors” who were successful before and after the Great Recession of 2007-2009.
They shared their strategies for remaining afloat during past downturns, how they’re maneuvering today and advice for fellow industry professionals.
These real estate professionals — regardless of their location, or whether sales in their market are slow or humming along — echoed common themes.
Today’s tactics
Reaching out to past and prospective clients was the top action that real estate professionals said they’ve taken during the widespread stay-at-home orders. Now’s the time to call and email people you’ve normally tried to reach because they’re stuck at home, said Thomas Blanchard, president of Las Vegas Realtors and a sales director for Renters Warehouse.
Yet the key is to check up and share market information, without a sales pitch.
“It is simple: ‘Hey, how are you doing? Just checking up on how you’re doing during this craziness?’ How easy is that?” Blanchard said.
“The next question they’re gonna ask you is something really simple: ‘How are you? How’s real estate?’” he added. “That’s on their mind anyway, because that’s all they ever see is the ‘When’s the crash going to happen?’ The questions are going to come pouring out of their mouth.”
Even marketing plans are being re-tooled. While still communicating with their existing database and prospective clients, some real estate professionals said they’ve changed how and where they advertise. Eric Benaim, CEO of Modern Spaces in Long Island City, New York, for example, refocused his company’s outreach to digital emails and social media posts.
“We were spending a lot of money on print advertising, and even on outdoor,” Benaim said. “We stopped that, as nobody’s outdoors, and I don’t think people feel comfortable now holding a magazine. We haven’t done mailers because I feel like people are going to be reluctant to even hold a postcard.”
Other longtime real estate professionals, accustomed to the mercurial ebbs and flows of commissions in real estate, examined business and personal expenses and trimmed them quickly.
Leigh Brown, the broker/owner of One Community Real Estate in the Greater Charlotte, N.C. area, was one of them. She underscored the need for Realtors — nearly 90% of whom are independent contractors with fluctuating income, according to the National Association of Realtor‘s financial wellness website — to budget for slow sales periods.
“I can’t stress enough that we need to be honest about the fact that this is the time frame when lenders and Realtors make the bulk of their annual income. They spend down their reserves and plan to make it back in March, April, May, June, and that’s not going to happen this year,” Brown said.
Strategies in past downturns
Industry veterans said they succeeded through the Great Recession of 2007-2009 by carving out niches — similar to what they plan to do today.
Brown, in North Carolina, said she learned short sales because she decided that none of her clients were going to go to foreclosure if she could help it.
“My business was exploding because I knew what the options were and every buyer, every seller – they need to know pros and cons of their different alternatives,” she added. “That’s how I came through the last downturn; it’s what we’ll do now.”
Meanwhile in New York, Benaim — who’d opened his firm in 2008 — used his nightly walk home to start meeting owners of the walk-ups and row houses lining the streets from his office to his home. That led him to build his contacts in western Queens, where he said he now does about $1 billion a year in transactions.
“We ended up focusing on those buildings, doing a lot of rentals and starting to get to know a lot of the walk-up landlords, little independent mom-and-pop landlords,” he said. “That carried us through definitely the rest of 2008 and then a good portion of the first quarter of 2009.”
Some learned lasting, admittedly tough, lessons. Nick Solis, who built a large brokerage in the mid-2000s but saw his revenue dry up a few years later, said the 2007-2009 recession taught him to track his business finances closely and prepare to act.
“You’re able to right-size the business on the go, and and make those decisions where you could either alleviate debt, end contracts, buy yourself out of different things, or in good times being able to reinvest and grow the company,” said Solis, now broker-owner of One80 Realty in the San Francisco Bay Area.
Tangible industry advice
Veteran real estate professionals shared their advice for others navigating today’s real estate market. Here are some of their tips:
- Consider a side job, even just to give you a mental focus. In the Great Recession, Brown learned how to play the organ looking for a church job. “I never got hired as a church organist and my real estate business stayed busy, but mentally it gave me a backup plan. Sometimes you just have to have the mental backup plan of applying for the job at Amazon, then you only work there three weeks before the markets are turned back and on, and now you’re busy.” — Leigh Brown
- Get a mentor. “Get somebody you can call and say, ‘This sucks. Is it ever going to end?’ and that person can say, ‘Yes, it’s going to end because the markets are cyclical.'” — Leigh Brown
- Create a financial cushion with enough money to last through a slow cycle. “Save for that rainy day, so that you’re not under the gun, so that you can continue business as usual even though business may be slower.” — Joan McCaughan, broker with Coldwell Banker in Miami.
- Focus on one geographic area and own that area, then grow. “When I first got into the business, I was focusing everywhere. I was focusing on the Upper East Side, Chelsea, Greenwich Village, Downtown. I didn’t really do as well. But when you’re focusing on one thing, and you’re doing that one thing really well, that is when you succeed.” — Eric Benaim
- Check in with prospective and past clients. With people staying at home, “this is probably the easiest time to make a call and get business than ever in history, and it’s not about making the call and making the sale right now. It’s about building up the pipeline so that you have business on the backside of this epidemic.” – Thomas Blanchard
