How’s the market? It is probably the most frequently asked question an agent ever gets. So I am going to let you in on a little secret. After you have done this for a while you learn that there are certain constants in what is commonly referred to as the Real Estate market. Because of this, as much as everyone likes to get all twitchy and panicky about the interest rates, and the harbingers of financial instability like recessions and inflation, those issues are almost always moot when it comes to a Real Estate agent’s actual book of business. What I am going to share with you might actually surprise you.
Regardless of whatever is happening in the economy, 80 to 85% never goes away. The vast majority of agents derive almost all of their business from their COI or SOI. That is to say, their Sphere of Influence or their Circle of Influence. Within the scope of all of the people that they know here, there is a special group made up of what we call the DDT’s. No, we are not talking about delirium tremens (a psychotic condition typical of withdrawal in chronic alcoholics, involving tremors, hallucinations, anxiety, and disorientation.) This is a simple abbreviation that refers to Death, Divorce and Transfers. No matter what happens in the market, people are still dying, couples are still continuing to get divorced (at an increasingly alarming rate) and transfers occur all the time (some across town and others across the country.) Now granted, each of these subset groups present their own set of challenges. The point here is, that whatever the interest rate is doing, it will have little to no effect on the family wanting to sell the house after Mom or Dad pass on to their appropriately earned rewards. In most cases, they just want to get rid of the property and split the proceeds with the rest of the family. Let’s look at divorces. Here, they will have, more than likely, at least one house that gets sold, unless the wife buys the husband out, or vice versa. Each of the jilted lovers will move on with their lives, and one or two of them might want to start over and buy a house again, so in this scenario there could be multiple transactions much to the agent’s overall satisfaction or glee. The last category affords perhaps the least amount of stress but make no mistake, transfers can be seriously stressful on most families. The husband wants to take the big job in Los Angeles but the wife likes it here. The wife wants to take the bigger job in Boston but the husband (now referred to as the trailing spouse) says,”NO WAY!” The spouses are delighted and on the same page, and the 17 year old daughter bursts into tears because she will miss all of her friends. If she has a boyfriend, just say, “Yikes,” and jump into the nearest foxhole.
It’s not easy, and each of these kinds of transactions will require incredible soft skills that will make an agent feel at times like they are either a marriage or a bereavement counselor, a priest, minister or rabbi, or even a Psychiatrist.
But it is a constant. So you can choose to make yourself a slave to studying graphs or financial projections all day long, and trust me your agent studies them too. But a good agent will simply go with the flow and work their Sphere (or Circle) knowing that regardless of the story on page one of the NY Times, they will have a successful business just dealing with the normal exigencies of life. Oh, remember , I mentioned that this was the source of 80 to 85% of their business. Where does the rest of it come from, if not from there? This would be what we would call new business: from For Sale By Owners, Expired Listings and internet leads mostly.
So based on this revelation, what is the most important part of building a successful Real Estate Business? It is building a referral base so they can have a steady stream of clients who are mostly derived from 3 of life’s biggest transitions: Death, Divorce, and Transfer.
“Hey, I wrote the book on Real Estate, literally.”
Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.
Start your home search now at www.husvarre.com