Breaking Into a Tough Real Estate Market
Breaking Into a Tough Real Estate Market
The first year she worked as a real estate professional, Mariana Costa made no money. She entered the business at just 20 years old during a declining market and had moved to Cape Cod, Mass., from Brazil only four years earlier.
At least 50 percent of the deals in this coastal community are to second-home buyers. Like agents in markets across the United States, foreclosures, short sales, financing challenges, low appraisals, and falling prices have been and remain part of her reality. Yet in June 2012, she represented the buyer or seller on seven closed deals and has eight transactions scheduled for July.
Costa and other practitioners from around the country report growing their business despite entering the industry during the worst real estate slump in decades. While their markets and their clientele are different, these real estate pros share several traits — a belief in themselves, a commitment to customer service and professional ethics, a willingness to work hard and creatively to help their clients, and the ability to identify and use their strengths to distinguish themselves.
Costa didn’t sell a house for her first 15 months in the business, but she worked full time getting to know her market and trying to become known. Her father was a real estate agent in Brazil, and she saw real estate as “a career that I could take to the heights that I wanted to,” she says. “I wasn’t going to just give it a try. I was really going to make it happen.”
She selected the neighborhood where she had lived with her mother, created the “Live your dream on Cape Cod” newsletter, and mailed it to her target neighborhood. Each issue included real estate and mortgage market news, features helpful to home owners, a Brazilian recipe, and a $30 gift certificate for the first person who called and correctly answered a trivia question. “That was my way of getting people to call me to talk about real estate,” she says.
The newsletter prompted a seller to call her for a second opinion on list price, even though he told her that his best friend, a prominent local real estate professional, would be getting the listing. During her three-hour meeting with that seller, Costa built a rapport, showed him comps, and explained why she’d list the house at a lower price. She got the listing and sold her first house.
When Tim Pitts became a real estate practitioner in Portland, Ore., in February 2010, he planned to live frugally and get a part-time job, but he got his first client (a friend of a friend) within his first week and helped two friends buy a house within the first three months. That first year, he was involved in four transactions. In 2011, he had eight sales, and in the first six months of this year alone, he’s completed eight deals.
After getting his real estate license, Pitts left a job with Adidas because corporate work wasn’t for him. He and his partner had bought a four-apartment home before he quit his job and had moved into a one-bedroom unit to keep their expenses low.
Following the advice from Gary Keller’s book The Millionaire Real Estate Agent, he sought guidance on finding clients from his more experienced coworkers. But one of the reasons that worked for him, he says, was that he picked a brokerage that was a good fit for him and the kind of agent he wanted to be.
“I really felt more of a connection to the people at Living Room, REALTORS®,” says Pitts, who joined a startup brokerage with an open floor plan. “I figured if I’m going to take a big risk, I should do it at a place that I feel really good about.”
He also heeded the advice about staying connected with people: He has sent clients sparklers on July 4, cookies on Valentine’s Day, and candied apples on Halloween.
“I totally felt hokey doing it,” Pitts says, “but people would love it.”
And he used Facebook to keep up with acquaintances.
“I say I’m busy, but I’m always looking for new clients,” he says. It worked. He was hired by an acquaintance relocating to Portland from Germany.
Not only did Pitts become an agent in a down market, but he also signed with a firm that broker Janelle Isaacson had opened a year earlier — just 16 months after the October 2008 economic collapse.
Isaacson, who had a 15-month-old at the time and was pregnant, says she left her former real estate firm in November of 2008 and began Living Room, REALTORS®, opening a storefront realty office in February of 2009.
“I couldn’t pay attention to all the bad news. I was having babies,” she says. “It helped me really stay focused.”
At her former firm, ads depicted a husband and wife with two kids in front of a $1 million house. That image didn’t fit her Portland clients, which leads the nation in the percentage of people who bike to work.
“Most of my clients are self-employed — artists, independent business owners, a lot of single women, and the gay community. I just wanted to create a brand that was going to represent how they live.”
And part of that meant creating a work environment that allowed Isaacson and her agents to have a work-life balance.
“I was very committed to attachment parenting and breastfeeding,” she says, so her children “came with me. I wanted to be able to breastfeed my kids. I wanted people to be able to bring in their kids, their dogs. And I wanted a community and culture where we would help each other.”
So she fostered a living room culture where agents were accepted into the firm if they were willing to collaborate. The business has been profitable since the beginning. It’s grown each year, and now has 39 agents and is opening a second office.
“I had the best year in my career last year,” Isaacson says. Between 2009 and 2011, during a declining market, the firm’s sales grew as follows:
- 42 units in 2009; annual sales: $13.3 million.
- 110 units in 2010; sales: $32.4 million.
- 214 units in 2011; sales: $58.9 million.
Sales for the first five months of this year topped $54.6 million with 162 units.
While starting in real estate during a soft market has its challenges, new practitioners find benefits to learning the business when activity is sluggish. Experienced professionals have time to show you the ropes, they say.
“I knew it would be slow,” says Allison Panetta, of Coldwell Banker Previews in Newport Beach, Calif. “With the market slowing down, it gives you time to learn the business. If you can succeed in a down real estate market, imagine how great you are going to do when the market picks up.”
Regardless of their location, real estate professionals just getting into the game say they’ve figured out a way to make the business work for them by playing to their strengths. Whether it’s a former pilot who is good with numbers or a former six-figure-salary sales executive who is comfortable with cold calling, they say the real estate business offers enough flexibility for them to tap into skills from their prior careers.
In Naples, Fla., Lori Fowler, who worked in development for nonprofits for more than 15 years, has no qualms about contacting sellers with an expired listing or For Sale By Owner sellers.
“This prospecting thing actually works,” says Fowler, a practitioner with Coldwell Banker Residential Real Estate. “Asking people for money is very much like sales. Now I have a tangible product to sell rather than a warm, fuzzy feeling.”
Chicago real estate pro Kevin Mack says he’s not comfortable talking about himself, nor could he ever cold-call people because he hates receiving telemarketers’ calls. But the former airline pilot says he’s good with numbers.
One of his strengths, he says, is “situational awareness,” where he can see the whole picture. “I know the market and I know numbers. It’s all about hitting the right price point and hitting the right timing.”
And Panetta, the former sales executive who became an agent in October 2010, tapped into her 20 years of marketing, sales, and negotiating experience to break into the luxury market of Newport Beach.
Her first client, the father of a friend, bought a $1.7 million home in Orange County. She also aligned herself with a well-respected real estate practitioner who has been her mentor.
With prior experience with multimillion-dollar contracts, Panetta sees parallels between her former career and her new one. She knows not to look at every hurdle as a confrontation.
“There are no easy deals,” she says. “It’s how you handle them, how you negotiate your way through them, that’s going to allow the deal to succeed or fall apart.”