experts: real estate column Wednesday, December 19, 2012

Surviving in a slower market

Here's all you need to know to survive the slower market - "List! List! List! Or you'll be missed! Missed! Missed!"

By Marty Douglas

As published in REM - independent news and opinion for Canada's real estate industry.

Good grief, where did 2012 go? I bet you forgot it’s only a couple of days until we discover whether the Mayans were right about the end of days. If so, there will be a lot of angry 2013 calendar buyers, Jehovah’s Witnesses or for that matter, any group sitting around expecting the rapture. But just in case, Merry Christmas. And Happy New Year.

I don’t know how I feel about the year 2013. Even the sound of “2013,” the way it sort of catches between tongue and teeth in one of those alveolar/dental sound descriptions I learned about in Anthropology 200. It doesn’t have the comfort of “12” or the maturity of “14” – very important in a single malt scotch so who’s to say it’s not critical in how we feel about the new year or our assessment of the year past?

I do know 2012 was a relentless tease in my real estate market, improving only marginally on 2011, and yet, like a rising hemline, leading us on with hints of greater things to come. Part of the problem was the endless parsing of the data by our real estate economists, creating semi-good news headlines out of old cloth in order to earn their bread and butter, while we in the trenches observed that we continued to be in a pattern of below-average sales numbers. What good are rising prices if the number of sales remains below the 25-year average?

Another issue: distractions from the daily grind. Consider the U.S. presidential election, the quarterly fixing of the Bank of Canada interest rate, provincial elections or threat thereof, and in B.C., the numbing argument over the PST versus the HST, concluding with the electorally correct but economically wrong decision of the referendum, proof yet again that benign dictatorships have their virtues.

And yet, some people had very good years. (By the way, if your market is Toronto or Vancouver and you are wondering why all the talk about a “slow market”, stop reading, save this column and read it next year. October would be about right.) Where was I? Oh yes, some people had very good years. The philosophy of the ant – “Think winter all summer. Think summer all winter.” The top earners in companies didn’t change, maybe a re-shuffle of the ranking order, nor did their unit sales – they just had to kiss more frogs, make more calls – and they did.

You know what that means. Well, some of you do. I’ve been watching this sequence for 42 years and with time off for good behaviour, I expect to be paroled about 2020. The hurt locker is going to be at the bottom end of the performance curve. For an industry with an average age up there with Heinz’s varieties, we can’t afford to lose those weak stragglers at the tail end of the herd at the same time as more of the elders seek retirement.

The biggest threat to organized real estate and its under-pinning budgets is declining membership. (The departure from CREA of several real estate boards in Quebec probably had more to do with parsimony than lack of value for membership.) And when the membership numbers fall, real estate board directors with budgets based on fixed-fee dues tend to spread the debt among the survivors before they look for cost-cutting measures. The survivors are top earners who, resenting the subsidy of the lower producer, suddenly come out in droves to special meetings and all hell breaks loose.

We can’t stop retirement. We must concentrate on the newer member and those with fewer than say, five years in the trenches. So – how to help the weakest?

First, stop the B.S. The market isn’t slower because Ottawa changed the mortgage rules. The lower producer probably didn’t have a buyer, let alone one with marginal financial qualifications. And the other thing the low producer didn’t have was a listing. Re/Max icon Dave Liniger once said of the latest technology: “Eighty per cent of the people in this business don’t need technology, they need a customer!” Most police work in solving crimes involves canvassing neighbourhoods and knocking on doors. Coincidence? I think not.

Top producers know you can’t sell from an empty shelf. They also know things like list/sell ratios and if the sell side declines, then the only way to meet the monthly nut is to have more – pop quiz – listings!

Here’s all you need to know to survive the slower market – “List! List! List! Or you’ll be missed! Missed! Missed!” I don’t care how you do it – drip marketing, door knocking, cold calling, farming, opens, floor duty – just do something that gets you out to meet the customer, belly to belly. Here’s another motivator – timid salespeople have skinny kids.

My resolve for 2013 is to work more with people who want to succeed the old-fashioned way, by earning success. One of my old friends in real estate, Barry Watchorn said, “We spend too much time in this business as managers herding turkeys up and down the runways, hoping they will fly.”

No more turkeys.

Contact Marty Douglas by email at mgdouglas247@gmail.com. Follow or connect with Marty on Twitter, LinkedIn and Facebook. He is a managing broker for Re/Max Ocean Pacific Realty in Comox and Courtenay, B.C. He is a past chair of the Real Estate Errors and Omissions Insurance Corporation of B.C., the Real Estate Council of B.C., the B.C. Real Estate Association and the Vancouver Island Real Estate Board.




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Recent Articles by this columnist:

The downside of teams
Saturday, October 02, 2010


Thank you, FINTRAC
Wednesday, November 19, 2008


A Snapshot of Alberta
Thursday, January 03, 2008


No song and dance for weighty housing issues
Monday, October 29, 2007


Advice for a Real Estate Consumer
Wednesday, August 01, 2007


All articles by Marty Douglas

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