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How to Ride the Wave of a Seasonal Sales Cycle

December 28 2020

iguide ride wave seasonal sales cycle 1The real estate market is highly seasonal and sales are adversely affected by the drop in temperatures during the winter months. According to the National Association of Realtors' statistics, 40% of homes are sold in May, June, July, and August. This seasonality leaves many real estate professionals working at a cheetah's pace in summer and scrounging for business in the off-season. Adjusting for the season can help your profitability, cash flow, and long-term success.

Here's how to ride the wave of our seasonal sales cycle.

Understanding Why Real Estate Is Seasonal

We all know that real estate is seasonal, but examining the reasons why can help you strategize and adjust your business. Many people choose to move in the summer because they want to avoid changing their children's school in the middle of the school year. These families may begin looking in late spring and start closing on homes in July and August.

Once the cooler weather and holidays arrive, people are reluctant to move. They don't want to deal with the extra hassle when they are busy finishing work projects and gathering with friends and family. Plus, many buyers know that there are fewer houses on the market in winter and may feel that they can't find what they are looking for. However, other buyers may see the winter as an opportune time to buy because they may be able to get a lower price.

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In spring, the market starts to heat up. Those who delayed moving now feel they can. As more homes come onto the market, buyers begin to look more seriously and connect with real estate agents and other professionals. Then, there is a mad rush to buy or sell before winter hits. If you check your metrics, you'll likely find that you're most busy from April to August.

Of course, your local market may have other fluctuations. Some attract snowbirds in the winter and see a rise in real estate transactions. Buyers in hot markets who are concerned about cost may choose to move in fall or winter in an effort to get a lower price on their future home. So, apart from the usual factors, it's also crucial to identify the trends in your market, and the specific trends among your target clients, to be better prepared for the seasonal changes impacting your business.

Business Changes You Can Make to Ride the Wave

Once you've identified the forces that make your specific market seasonal, how do you adapt to protect your business, making the most of your time in the peak season and trying to generate more business in the busy season?

1. Target New Verticals

Consider targeting a different vertical in your off-season. For example, commercial real estate heats up before the end of the quarter and the year. Focusing on it can help offset the lull in the residential market. If there is a vacation spot within or close to your usual neighborhoods (that is busy during the winter), try to generate business within it. And, if you get a lead in an unexpected vertical, or with an atypical client, act on it. You never know when an unusual request opens you up to a whole new market.

2. Choose a Side Gig

Focusing on a side gig over the winter is a great way to supplement your income. Consider side gigs that are related to your core skills. Property management is a great option, as many property issues heat up over winter, including snow removal, holiday preparedness, and filling demand for vacant units. Those who own vacation properties and Airbnb properties may also hire real estate agents to manage the property over the winter so that they can get a break. Other side gigs that might work with your skills include holiday event planner, home decorator, and winter resort staff.

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3. Change Your Service Offerings

Winter might be the perfect time to dabble in new services for your real estate business. You won't be wasting your valuable summer season learning a new skill, but you can take those skills into next year to be even more profitable. You can experiment with offering real estate photography, creating 3D virtual tours, and performing home staging (including virtual staging).

4. Build Relationships

As you have more time over the winter, you can develop more rewarding relationships with other professionals and former clients. Put extra focus into making new professional connections and reaching out to existing contacts. The holidays are always a great excuse to reconnect.

How to Get Business in the Off-Season

Generating leads in the fall and winter is ultimately the key to keeping your business stable over the whole year. First, you need a budget. Keep some of your profit from the busy season for real estate marketing over the slow season. You may not need as much budget, as ad campaigns will be less expensive in the off-season. Fewer agents are competing for keywords and space on Zillow and other platforms. Once you have your budget in line, move onto strategy.

1. Referrals

As always, connecting with clients who you've previously worked with and getting referrals can be a lucrative way to generate business. In the off-season, you can phrase your request for a referral differently to generate better results. Mention to your connections that you like to help those that are stuck with the challenge of buying or selling over winter. Do they know someone who could use your assistance?

2. Use the Season

Buyers and sellers can get many benefits from making their move over the winter. They can work with highly motivated buyers and sellers, who often want quick closings. Some of your clients who may be waiting to sell or buy until spring can be convinced if you can explain the benefits of the season.

3. Target Carefully

It is important to target the right seller or buyer. Over the slow season, those who are selling or buying are often doing it because they must, due to work or other commitments. They value speed and responsiveness. The more tasks you can take off their hands, the more appreciative they will be. Promote those qualities and your comprehensive services, and you will get more of that coveted off-season business.

To view the original article, visit the iGuide blog.