In 1993 the commercial real estate market was in a severe depression. Sam Zell, a major real estate investor and the future owner of the Chicago Tribune, coined the phrase “Stay Alive til 95”. His basic message was that “this too shall pass” and that, if you could hang on, the market would recover and success was possible in the future.
Today we face a similar situation in residential real estate. It now seems as if the whole industry is upside down and that the future is bleak. But that isn’t true. Todays market is the result of emotional reactions to a variety of events in 2006 and 2007. It is important for all of us to remember 1995 when the commercial market came roaring back. It is important to know that also in 2007 “this too shall pass”! We may continue to see challenges as we move into 2008 but hang tough and “Hold the Line til 2009”. Use this time to solidify your market position and you will be the go to agent in the future.
Did you see Mary Umberger’s colume on Sunday, October 21st?
According to Ivy Zelman, a real estate market analyst, the existing home sale market will continue to slow through 2009 and then will see a gradual recovery through 2012. The sobering aspect of these projections is that total sales in 2009 will only be 60% of the total estimated for 2007 and the improvement in 2012 is still ony 77% of what will be done in 2007!
“”Existing-home sales are much stickier,” complicated by the ballooning numbers of foreclosures, she said. She predicts those sales, too, will reach bottom in 2009, dropping from her estimate for this year of about 5.7 million sales to — ouch — 3.4 million. The recovery for existing homes will be more gradual than for home builders, inching up to 4.4 million sales in 2012, according to her forecast.” Chicago Tribune, October 21, 2007
It is clear we are in the second year of a whole new real estate market, a market that will be with us for some time. Waiting for the old days to come back will mean a very long wait. What needs to be done now is to revisit how you run your real estate business. If you continue to stay with the business model where the company’s philosophy is that they are responsible for the agents success and therefore retain a large share of the commissions earned, you will find real estate is a business endeavor that is nearly impossible to succeed at financially. You may find you “enjoy” the people or the process but the financial rewards will be elusive. If you have come to the realization that you are the one responsible for the business you generate and, as a result, you should be the one to retain the commissions earned, you may find the business model of Charles Rutenberg Realty is a perfect match. If that is the case, let’s talk.
The September 2007 issue of “Real Trends, the Trusted Source” speaks to the challenging market we all are experienceing today. They say:
“The importance of the Internet as a source of business for realty firms will
rise in importance. While the “bull” market in housing sales was taking place,
only a few firms and sales professionals paid much attention to online leads,
how to get them and how to service them. We think that will change
Many agents long for the old days when deals were relatively easy and when they didn’t need to utilize the current technology to compete in the market place. Those days are over. The average Realtor is 53 years old. The average first time buyer is 32. That buyer will not accept the Realtor’s lack of skills to utilize current technology. Every year that passes will see more buyers coming into the market demanding a technological solution to their buying requirement. It will also see fewer and fewer aging consumers and Realtors who see technology as an annoyance and inconvenience rather than as a useful and profitable tool.
Real Trends projects that for real estate firms to survive, much less succeed, they must adapt to current market conditions and to commit to re-engineering their firms and to integrate their marketing with their technology to create an effective online presence. Charles Rutenberg Realty is committed to making this adjustment so as to be a firm in the real estate industry that is leading the technology revolution rather than follow. Charles Rutenberg Realty agents who subscribe to this commitment will find their business growing while those who resist change will find limited success and increased frustration and may find this new real estate busniess is not the career for them. If that is their decision, we support them and wish them well, since our philosophy is that each agent should make their decisions based on what is in their personal best interest. As a company however, our commitment is to maximizing our effectiveness through the use of evolving technology and we look forward to providing our customers solutions to their problems through the effective use of these tools.
To develop trust, give information. To destroy trust, withhold information.
This seems like a pretty basic premise but it is surprising how often it is ignored. In today’s real estate market specifically, and in every market in general, the best way to close a real estate transaction is to be an objective provider of advice and perspective. We can’t sell someone on a deal, but we can help them come to the realization that the current deal may be the best deal for them.
At Charles Rutenberg Realty we focus on creating the structure for agents to build their business around. We also support our agents with advice and insight they can use to help finalize a deal that may end up falling apart without a clear headed, objective agent offering a perspective without an emotional bias. A perfect example of the type of comment that can help close a deal is to restate a deal point in a way so that it’s insignificance is readily apparent. For example, a transaction is on the verge of falling apart because the buyer feels the final counter requiring an additional $10,000 is too much to accept. After all. $10,000 is a lot of money. But is it? When you take into consideration financing, at 6.5%, 30 years, $10,000 equals approximately $63 per month. That is only $2 per day! Would the buyer really lose the home they desire for only $2 per day? Probably not, if they knew that was what the difference actually was. Our job as real estate professionals is to not “sell” real estate. It is to help our customers make the right decision for themselves by presenting the facts in a way that helps them come to the right decision. That is what we look to do at Charles Rutenberg Realty and why we live by the byline “The Standard of Excellence”.
We are pleased to announce Charles Rutenberg Realty agents now have the opportunity to expand their business by also becoming a loan originator with First Capital Mortgage. Agents who add this diminsion to their business will not only be able to offer their customers highly competitive mortgage solutions through First Capital’s network of 150 lending sources, they will also earn a premium commission split of the mortgage fee for their efforts. If you would like to discuss the details on this, feel free to contact Mike Torressoo, branch manager for 1st Capital, at 312-988-9999 or via email [email protected] .