There are two big differences between the real estate professionals who are doing it tough right now and those who are thriving, according to One Agency founder and CEO Paul Davies.
“I know a lot of principals and agents are doing it tough right now. But I also know, from speaking to One Agency licensees across Australia and New Zealand, that some are thriving. The two big differences are that their businesses are lean and their minds are sharp,” he said.
Mr Davies said that, on the business side of things, successful principals and agents regularly review expenses. They also look for lower-cost ways to achieve the same outcomes.
“For example, they’re renting premises in secondary locations rather than main streets, cancelling subscriptions they’re not using, outsourcing jobs rather than hiring staff to do them in-house, refinancing to lower-rate loans and switching from high-commission franchise groups to no-commission groups like One Agency,” he said.
In terms of mindset, Mr Davies has noticed that successful real estate professionals tend to be level-headed.“They stay calm, no matter what the market and economy are doing. As a result, they make clever decisions,” he said.
Mr Davies urged principals and agents who are struggling right now to take action immediately, to stop smaller problems growing into larger ones.“In an emergency, businesses often cut staff because that’s the fastest way to reduce costs. Unfortunately, it’s also the fastest way to reduce revenue, and so should be avoided if possible. If you make smaller cost savings today, you hopefully won’t need to make larger ones tomorrow,” he said.
Mr Davies also noted that when you’re in a desperate position, it becomes harder to win business, because it shows through in your body language during listing presentations.
Furthermore, as your financial position deteriorates, so does your mental health.
“I’ve been in real estate for more than four decades, and have experienced a dizzying array of highs and lows during that time. But I’ve managed to survive – even though, at times, I’ve been close to the edge,” he said. “That’s taught me the value of running a lean business, planning for the long-term and staying level-headed. If you’re doing it tough at the moment, I’d urge you to take action now, both to improve your current situation and to stop this problem recurring in the future.”
Barry Rolton, from One Agency Your Place in Kaiapoi, is one agent who’s doing well right now, with his current revenue matching that from 12 months ago. Barry attributes this to his business’s reputation, built over years, for being honest and putting clients first. “That generates strong testimonials and regular referrals, which helps you during weaker markets,” he said. He also says that focusing on real estate fundamentals is crucial.
Yubi Baral, from One Agency Gungahlin in Canberra, is also thriving in the current market and agrees with Mr Rolton’s emphasis on real estate fundaments, and the need to work harder and smarter than during the boom. “It’s a slower market compared to the start of the year, but business is still being done and people still need to sell,” he said. “That said, properties no longer sell themselves, which means agents need to spend time educating both buyers and sellers.”
Mr Rolton added, “with vendors, you need to explain the importance of pricing a home correctly and investing in marketing. With buyers, you need to highlight the benefits of the property because buyers have far more options now. Also, you need to do more work to put deals together.”
Both Mr Baral and Mr Rolton are confident that if they continue to focus on real estate fundamentals, their businesses will continue doing well, even if conditions become more challenging.
If you love what you do but want to make a change – either to keep more of what you earn, shift to a more lifestyle focused operation and reduce running costs; I invite you to contact me at One Agency and discuss confidentially how our model, (less than $1000 + GST per month regardless of your GCI) may be just the answer to breathe new life into your career and future proof yourself.
“It’s not what you make, it’s what you keep that counts.”
‒ Paul Davies, Founder and CEO
Revised edition: Written by our Founder and CEO Paul Davies with a foreword by leading real estate coach and trainer Tom Panos, ‘How To Profit In Real Estate Business Ownership’ is compulsive reading for established and aspiring agents looking for a way to achieve success and maximise fee retention.
As founder and CEO of the fastest growing real estate network across Australasia, I offer real estate professionals an opportunity to reap the financial rewards of going it alone with the security and clout of an established brand. Talk to me and my team about your options.
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