Image courtesy of Pixabay, Squeezed Wallet
In this article we discuss four ways that real estate agents can get ahead when their local market begins to slow down.
Every real estate cycle will have periods when the sales volume becomes extremely low, slowing practically to a crawl. Different forces cause real estate markets to have low volume, such as high interest rates, high prices, a local economic crisis, or a natural crisis. Regardless of the reason, there are four things real estate agents can do to create more sales.
Market a great deal to motivated buyers until the property sells. To do this, you'll need to set up a campaign with some innovative ideas. Here are five methods to get you started:
Even when sales volume is low, there will still be sellers out there who need to sell their home right away, no matter what the market conditions are. As a real estate agent, your job is to find motivated sellers and get them to hire you. But how do you do this? Here are some ways:
This includes both residential and commercial leasing, both markets that you should consider, especially if business is slow.
Some landlords don't have the time to market their property to find new tenants, and that's where a real estate agent comes in. Your services could include one or all of the following:
Be prepared to answer prospective landlords' questions. You should be able to tell them how long, on average, it will take you to rent the property; how you will market the property; how you will screen tenants; and what the whole process entails from the start to handing over keys to the new tenants. Real estate agents typically charge the equivalent of the first month's rent for this service.
With commercial real estate, you would deal with small-business owners. You might work with a building owner who needs tenants. If you find a tenant, the building owner pays you a commission, which is generally around 3% of the rent paid over the lease period.
If you're representing the small-business owner, you would help them find a good space at a great deal. You would help your client read the lease to help ensure the terms are good and that there will be no surprises or hidden charges. You would also help negotiate the lease payments. As with residential real estate, if you're the listing agent and another agent brings in the tenant, you split the commission.
You could develop a niche and specialize in 1031 exchanges. A 1031 exchange refers to the IRS code that allows real estate investors to defer capital gains tax when they sell their property by buying another like-kind property. There are all sorts of rules involved with 1031 exchanges, and investors often don't know what they don't know. You would be the person to ensure they do everything correctly before the they close and it's too late to fix any problems. Once you familiarize yourself with all the laws and technicalities, you can market your business to investors, letting them know that you're an expert in 1031 exchanges and can save them potentially thousands of dollars in income taxes.
You don't need to sit around and wait for the market to pick up again. You can be proactive by changing what you normally do, making some money even during a slow time.*We would like to thank Mike Work for his expert insight on this article.
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