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Real Estate Retirement: What’s Your Exit Strategy?

June 24 2014

realestate websitebox

For many reasons, the real estate industry is one that doesn't lend itself well to retirement plans. For most agents, selling real estate is a constant battle to stay ahead of the curve--over-spending when the market is up, and struggling to survive when the market goes south.

In a business where 20% of the agents do 80% of the business, it's easy to see why an exit strategy is the last thing on most agent's minds. However, as is the case in most situations, you don't have to reinvent the wheel.

For those who can survive the first five years in the business and then avoid the high rate of burnout that permeates the industry, there is a built-in retirement plan for those who do two things: provide great service and then follow-up. It's that simple.

A staggering 84% of home buyers said that they were satisfied with the agent they used and would use that agent again. Yet, less than 20% of buyers end up using the same agent in their next transaction. There is a huge disconnect going on and it is costing most agents hundreds of thousands of dollars in lost revenue.

Currently, the average agent reports earning 21% of his or her business from referrals from past clients. That number jumps to 29% if the agent is making $150,000 or more. The better agents get it.

With the average homeowner buying and selling a home every five to seven years, that is a LOT of opportunity simply by making sure you simply stay in touch.

And now, with the shift in new buyers to the Millennial generation, there is an incredible opportunity for tech-savvy agents to dominate the marketplace while building a repeat and referral database that will serve them well for years to come. And, when it's time to consider retirement, you will have the opportunity to sell your book of business for a hefty fee.

Let's look at these basics.

An overwhelming nine out of 10 recent buyersnine out of 10 recent buyers went online during their home search process, according to the NAR Profile of Home Buyers and Sellers. And while everyone seems to agree the need for an online presence, few are taking advantage of this incredible farming opportunity.

While 69% of REALTORS® reported having a website for at least five years and 61% say they are using social media, they only reported spending a median of $200 to maintain a website and members typically brought in four inquiries FOR THE YEAR.

Here are some of the actions taken by buyers as result of Internet home search:

  • Walked through a home viewed online: 62%
  • Found agent used to search/buy home: 32%
  • Drove by/viewed a home: 76%

So, a third of all buyers found their agent as the result of an Internet search. And that number is growing. And, if you simply provide service and stay in touch, those connections can easily translate into new business. If handled properly, a single client will generate from three to five additional transactions during their lifetime through repeat and referral business.

More from the survey--percent of business generated by REALTOR® personal websites (all REALTORS®):

  • 0 percent: 32%
  • 1-5 percent: 26%
  • 6-10 percent: 16%
  • 11-25 percent: 12%
  • 26-50 percent: 8%
  • More than 50 percent: 4%

Again, it's the top 20% getting 80% of the business. And it is the Millennials who are driving the market.

Young home buyers remain optimistic and see their home as a good investment, while older buyers are more likely to trade down to a smaller property to match changing lifestyles, according to the 2014 National Association of Realtors® Home Buyer and Seller Generational Trends study, which evaluates the generational differences of recent home buyers and sellers.

Lawrence YunLawrence Yun, NAR chief economist, said the Millennial generation, which is under the age of 34, is now entering the peak period in which people typically buy a first home. "Given that Millennials are the largest generation in history after the Baby Boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people," he said.

The key to long-term success for real estate agents is to capture these young buyers by utilizing new technology and then to build a database specifically for past clients and referrals. And then, deliver targeted content – including personal notes and calls – on a regular basis so when they are ready to move, you are top of mind.

The bottom line: You are building your retirement one customer at a time. Referral and repeat business is the key to success for every agent who beats the odds and spends his or her entire career in real estate.

The question is: How much money are you leaving on the table?

 

To view the original article, visit the WebsiteBox blogWebsiteBox blog.