There’s a growing fear that we’re about to get hit with a recession. It’s on CNBC, CNN, and every news outlet around the country.
What’s more, we’ve seen the Fed, the organization that sets the interest rates for lenders, signal that it will do whatever it takes to fight inflation.
That means raising the prime rate to slow down the demand for luxury and high-ticket items like houses, making it more difficult and expensive to finance those types of purchases.
What happens when the prime rate goes up too high and too quickly? It means that businesses have a more challenging time getting the funding they need, and they begin to slow down their growth and hiring. This trend is known as a recession.
A recession is an economic term and indicator when there are economic slowdowns and reductions in industrial activity for more than two consecutive quarters.
We’ve already seen a slowing market. Coming off the heels of how hot the seller's market was in 2021 and early 2022, we see price adjustments, longer days on the market, and more inventory than before.
So with all the warning signs pointing toward a recession, what can you do as a real estate agent to survive?
First, decide if you want only to survive or come out ahead and thrive?
Before you freak out, a recession lasts only a short time. For example, the longest recession in the past 50 years was only 18 months, so while it can seem overwhelming, there is a light at the end of the tunnel.
To survive and prepare for a recession as a real estate agent, there are five key things to do to come out on top.
- Increase Your Grind-Become A Community Servant
Dealing with a recession isn’t fun for anyone, but if you’re smart about how you market and strategically service your clients, you’ll survive and thrive.
The first thing to do is to consider pivoting how you market your services and how much effort you’re putting into your business.
When many others are running in circles with their hair on fire, you want to step on the gas and increase your grind. Of course, you’ll need to work harder than you have in recent years, but if you do it smartly, working hard will yield great results for you.
Spending time on the things you need to do for your lead generation should be first and foremost on your agenda, but think about your client’s point of view.
Right now, there is some anxiety about what is happening with the economy, and the cost of living keeps going up as well.
If you think about your prospects' concerns, find solutions to those problems, and then present them in easy-to-understand ways, you’ll position yourself as a go-to expert.
What that means for you is that you need to grind harder than you were. You need to learn and understand the larger economic picture as well as the local market and provide content that is educational types of materials for your potential clients.
One thing to consider is using TikTok to help educate on a tiny aspect of home selling in a recession. Make it a fun video that is witty and light-hearted but also one that points out just one way that your services–and those of preferred vendors–can help your clients with their real estate needs.
Grinding it out is a great way to learn, polish, and produce great content that helps your clients. What’s more, is that the types of content you create will help boost your reputation as a local expert and help you win the listing before you arrive!
One really important tip is to focus your in-person efforts on being seen as a community servant.
Provide your community with tips and tricks, and educate them on how involvement in real estate can benefit them. Giving your leads and clients with tools and education to help them understand the market advantages of buying and selling during a recession will position you to be perceived as a local expert.
Also, becoming involved in your community, not as a real estate agent but as a person giving back, is a great way to boost your profile while also doing good.
So focus on being in your community, whether it’s joining outreach programs, community service organizations, or sponsoring youth activities. It makes your community a better place to live and boosts your reputation within the community you serve.
- Change Your Routine-Implement A CRM
You need to change your routines to survive and thrive during a recession.
Think about how businesses needed to pivot and change how they operated. For example, restaurants had to provide outside dining and delivery options. Retail shops had to provide online shopping and curbside pickup. We had to change how we met with clients, showed properties, and made offers.
If you are still operating your business like it was in 2020 and gangbusters, you’re nuts. With interest rates rising, and currently, mortgage rates are as high as they were in 2008, buyers have a more challenging time getting their financing than at any time in over a decade.
For example, if you’re in a race and you’re ahead, you’re going to go into cruise mode and be able to get to the finish line. But if you’re behind, it’s going to take more effort and different tactics to find an edge to catch up and overtake the leader.
You may be more inclined to take more risks, to think outside the box to find a way to win the race. In other words, you’re going to adjust your strategies and tactics.
Your strategies in a race and real estate should be similar. However, if you’re dealing with a hot market, you can do some things differently than if you’re in a downturn or even a recession.
One thing to keep in mind is that routines are still important. They’re just going to look different than they were before. You’ll need to rearrange how you do your lead generation strategies and the amount of time you dedicate to the tasks you need.
But don’t freak out and go from working your everyday routine to working 18 hours a day. That’s both insane and not what you should be doing anyway.
One of the best strategies you can have is to implement a CRM. A CRM is a tool to help you remain in the front of mind of your potential clients. CRM stands for Customer Relationship Management and allows you to automate your emails, texts, and other ways to communicate with your clients.
- Pivot As Needed-Move To Online Fully
Just like adjusting your routines, you need to pivot your business as needed based on factors on the ground. For example, as the market shifts, you must focus more on providing outstanding service to your clients and prospects.
You need to think outside the box about ways you can educate your leads about ways to buy a home during a recession in ways that makes sense to them.
For your sellers, you need to educate them on one key fact; people are going to need a home still to live in and will still be moving. It’s just that the market will take a little longer to get from points A to B.
Because people are still looking to buy, you’ll want to be creative in the ways you advertise for your clients.
Video is a great way to highlight your listing and having a relationship with other agents, as well as a list of qualified buyers that you can present to your clients is a great way to help them–and guarantee you’ll get the listing when it's time.
If you just want to survive a recession as a real estate agent, do what you’ve always done. But if you're going to thrive and come out ahead during an economic downturn, you need to be creative and think about progressive ways to promote and market your services to buyers and sellers.
Focusing your efforts online will help you become more efficient in customer relationship management and lead generation. It will also give you more time to dedicate to reaching potential clients and finding more business for you.
- Get Creative In Your Content – Use Video
When you’re creating marketing content, think about the types of things you want to do and how your clients may see it.
For example, people on Facebook don’t want to read really long, salesy types of posts. Instead, they want cute pictures, something fun, and a couple of lines describing what’s happening.
On Instagram, people aren’t there to read. They’re there to see some pictures, images, and short videos. So post stuff that is exciting and image-heavy.
TikTok is an excellent tool for real estate to use. In addition, you can post short, fun videos showcasing your skills and personality.
YouTube is another great thing to post content on. With YouTube, people don’t mind longer educational videos, so put a spotlight on your expertise and grow your brand.
For example, my YouTube channel has tons of videos on how to use video to succeed in your real estate business, so check out my channel and subscribe to get all the best content out there.
If you’re not using video, you’re operating in the past. So many tools are available to you that it can be a little overwhelming at first. You need to focus on one platform, create some content, and promote it to your clients.
Video and social media are great ways to stay in touch with your clients and build your reputation. Also, it’s something that you make once and can be shared forever, so there’s a huge value and return on time spent on these platforms.
- Don’t Panic
Most realtors won’t prepare or pivot for the reality of the market change. So the biggest takeaway for you as a real estate agent is to create a strategy that transforms what you do in your business.
In other words, don’t panic.
Don’t freak out.
The uncertainty is an opportunity for you to take advantage if you set up systems that highlight your business. Instead, change what you do and find a new way to create new routines, such as being totally online and utilizing a CRM to help you communicate and reach more and more clients.
Most people will panic, and a lot of agents will leave the business. However, that means there's a ton of opportunity for the rest of us still in the business.
Look, recessions happen. But while everyone is running around with their hair on fire, you need to take a deep breath and figure out different ways to operate your business.
Keep in mind that recessions don’t last forever, be creative and grind it out; you should see some fantastic opportunities.
