With experts dubbing today’s market as “the best real estate marketplace in 35 years”, how can aspiring entrepreneurs find their way to success?
In a recent REB Masterclass, Real Estate Gym trainer Tom Panos, Managed co-founder Thom Richards and Momentum Media executive director for real estate and consumer wealth Phil Tarrant talked about how the post-COVID real estate market has changed the way businesses work.
According to Mr Panos, the pandemic has ultimately pushed the market forward, resulting in the “lowest interest rates, lowest days on market, highest clearance rates and real estate agents having the best months ever”.
Further, the unprecedented phenomenon has created an “incredible dynamic” between technology and real estate, he said.
“COVID clarity has made real estate agents realise it’s no longer an option. It’s no longer a should — it’s a must.”
Due to the limitations that the pandemic has created such as border closures and social distancing measures, technology has become entrenched in the way the real estate industry is operating, allowing some agents to set up their own businesses and expand into “hybrid-model” organisations, Mr Panos continued.
How can agents aspiring to kick off their own agency succeed in today’s market?
1. Learn the “team mindset”
Before even jumping on to establishing an independent business, aspiring agency owners need to learn how to abandon their “independent mindset”, according to Mr Panos.
“It requires this mind shift, to move away from being a lone wolf. A lot of agents that really crush it, they are people that operate like silos. They might have one or two assistants, but fundamentally, they’re the hero,” the real estate coach highlighted.
“When you open up a business, you’ve got to accept the staff that work for you. Now your agents will become the heroes… You’ve got to take a step back and say, ‘It’s about them now’.”
2. Find your fit
Once the mind is set towards teamwork, Mr Richards advised figuring out where the business would fit in the current market.
According to him, understanding the business’s unique proposition would be key to succeeding in a market where many have already established themselves.
“We’re in an industry where the majority of the business is controlled by the top 20 per cent of agents… It means that, for the rest of that market, you’re going to have to fight for it,” he said.
“You’ve got a small piece of the pie, so understanding what your point of difference is is the most important thing.”
Once a business has established its point of difference, he recommended homing in on it and developing the business around that unique proposition, from marketing to strategy and actual operations.
“That’s probably the biggest thing that I did when I launched my first agency — just try to differentiate myself, honed on that, marketed around that. I did something a little bit different than what everyone else was doing,” he noted.
For Managed, Mr Richards developed a framework that focused on providing “down-to-earth, genuine” service to clients, backed by expertise founded on ground-based knowledge.
Ultimately, their team of three saw 50 properties sold in the first year of the business.
He said: “For us, [the point of difference] was not smelling like a salesman… We’re quite down to earth, we didn’t dress up in suits and drive around in real fancy cars. It was more about being genuine and really looking at setting ourselves apart from what else was out there.
“We also picked an area that we knew really well… We were in Surry Hills at the time and we read that demographic quite well. They are young, professional, so they’re switched on and they know exactly what they should be getting in terms of service. So, we made sure that we tailored it to be a much more personalised service for that particular market.”
3. Leverage technology
In a market where technology has accelerated the speed of change, Mr Panos said that it’s important to find a way for new tech to complement the agents’ service.
“Technology is not substituting the real estate agent, it’s complementing the real estate agent. I fundamentally believe that it’s the model that’s going to work long term,” he said.
“For example, you’re trying to work out, ‘Who do I call today?’ because agents have to talk to people. Clearly, the machine’s not going to talk to people, but what the machine is going to do is say, ‘Hang on a second, talk to these 30 people instead of these 7,000 people in your database.’
“That’s what technology is doing. It’s providing you a higher probability of being efficient… and being more effective with your conversations with people.”
4. Have a passion for property
Finally, when the business is established, the experts remind aspiring business owners that there’s bound to be a few challenging periods before the season of success. This is where passion for property would play a critical role, according to Mr Tarrant.
“You need to have a passion for real estate. If you don’t care about it and you think it’s just a job, I probably wouldn’t be trying to kick off an agency, whatever the agency looks like,” he said.
Passion would also push the agency forward, as it allows the organisation and its members to develop a deep understanding of the customers’ needs and establish trusting and long-lasting relationships.
“If you want to create your own business in real estate today, it doesn’t necessarily need to be in real estate sales. You can be a buyer’s agent, property manager or something else — there’s a whole plethora of new organisations coming through with people who have passion for real estate,” Mr Tarrant said.
“But you always need to have that passion. Make passion your pay cheque.”