As readers of my column know, I‘m a bit of a nerd. I love numbers and concepts and dogmatically believe there are certain unalterable rules that govern success in real estate and life. On that note, yes, the numbers tell me it’s sluggish out there; and, yes, there is a formula to enable investment sales brokers to succeed and prosper in slow markets.
Currently, the markets are rebalancing valuations, leading to reduced sales volume in comparison to the last several years. To be clear, I am confident that the smaller number of deals will be nothing like that of the great recession. But the equity and financing available point in the direction of a down market. However, this pause will only lead to lean times if you let it.
I am reminded of one of Ronald Reagan’s quips: “A recession is when your neighbor loses his job; a depression is when you lose your job.” The clear corollary for the brokerage community is that if you are doing business the market as a whole is not problematic.
Unfortunately, what typically happens in downturns is that real estate professionals create self-fulfilling prophesies. Their self-talk turns negative, they reduce activity and fail to do even the basic activities that will lead to success. Reduced activity is never an answer.
So, how does one continue to transact business at a high level during a slowdown?
By redoubling effort.
This is a fairly simple solution and comes down to making the right choices to ensure success. However, many people don’t entirely know what that means. Or, they think that because it’s a slow market it would be a big waste sinking even more time and energy into their jobs.
This is a trap. It creates openings for the scrappy broker. Work more hours. Just do it. Markets like the current one require 12 hour days or longer.
Time in the office or on the job is not enough. Activity needs to incrementally increase as well. Make more calls. Conduct more meetings. Pitch for more business.
Become more flexible in terms of the deals you will work. This may mean expanding your geographical boundaries, the asset types you work or the size of the transactions you focus on.
Push a little harder. An extra dose of assertiveness is important in a tough market.
Focus on motivation. Motivation drives people to action. Understand why people want to transact. While always important, this is critical in a slower market because it focuses your efforts on where you can get results. Vacancies, management or partnership headaches and personal issues such as divorce, death or retirement are true motivators to action; seeking a crazy, top-of-the-market valuation no longer is. So zero in on where the probability of a transaction is highest.
Accentuate the positive. While the investment sales market has slowed, at Eastern Consolidated we are still seeing good volume, and our retail and capital advisory businesses are doing extremely well. Instead of negative thoughts and expectations, think Henry Higgins and Eliza Doolittle. Use the power of thought to propel you forward not hold you back.
All of these ideas are easy to comprehend and execute, yet many people don’t because it is easier to wallow in an emotional morass than to dig deep and crush it.
I promise you that if you follow this simple model, your income will remain similar, and you will be a much stronger broker and be able to take your business to a whole different level when this market turns positive.
Mark Schnurman is chief sales officer and a principal at Eastern Consolidated.