Winter is often a slower period in real estate. The cyclical nature of real estate sales poses challenges for REALTORS®, who must manage the lean times in order to remain in business during the busy season. The Edge newsletter talked to three REALTORS® in different cities to learn how they adjust to the ups and downs of the sales cycle.
When Don MacDonald, who has been a REALTOR in Sault Ste. Marie for 50 years, was first starting out in the business, sales were slow and money was tight in December.
“We got a $50 bonus and I used it to pay my electric bill so I would have electricity for Christmas,” MacDonald says. Even after he settled into his career, “I don’t ever remember a good December,” he says.
Nonetheless, MacDonald never sits idle at year’s end; instead, he plants the seeds for business in the New Year by sending out his trademark calendars to former buyers and prospective buyers and by spending time meeting people and volunteering.
“If you put effort into those things, you’ll benefit from the preparation time later,” MacDonald says. Meanwhile, he makes sure to have a “rainy day fund” for the leaner times of year. He suggests setting aside at least three months’ salary as a safety net.
“You must build up a backup to carry you for a few months,” he says. “That way, you won’t be in a bad spot where you’re unable to take care of your affairs. Put some money aside during the good times.”
MacDonald never sits idle at year’s end; instead, he plants the seeds for business in the New Year.
Over the years, he has also learned to budget. He estimates the number of contacts that lead to a showing; the number of showings that lead to offers; and the number of offers that lead to sales. With a particular income goal in mind, MacDonald knows what’s necessary to achieve it. “My philosophy has always been that my budget is what I spend, so if I spend more, I need to work more,” MacDonald says.
Lydia Ingles, a Newmarket REALTOR® with 28 years’ experience, says that she has learned to put money aside regularly for the times when deals aren’t happening. She also has her brokerage automatically put aside her HST funds so that she can pay the government without thinking twice about it.
“When you first get into the business, you blow your cheques on expensive cars or trips, but now I try to invest money or put it into a separate account,” she says. “For every deal I do, I keep $500 and treat myself.”
During the slower times of the year, “I emphasize my marketing, networking and volunteering,” Ingles says. “I’m always volunteering and it makes a difference. For example, I’m always at church working in the kitchen, and now that people know I’m in real estate, they ask me how things are going and come to me with real estate questions. I do industry networking, too, through OREA and CREA.”
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It really pays off, Ingles says. All of her business during the past year was either from repeat customers or from referrals. “If you give, you get, but you must give unselfishly,” Ingles says. During slack times, she also prepares marketing materials for distribution during busier periods. Her signature postcards – “they get a great response” — go out four times a year, so she readies them in advance.
“I try to be ready so that when I’m busy, I don’t have to do other work,” Ingles says. Ingles also finds that the slower season is a good time to take industry-related courses; most recently, she took a class focused on electronic signatures. She suggests that for those new to the business, it’s a perfect time to ask a more experienced colleague for advice and guidance.
Georgiana Woods, a Toronto REALTOR® with 28 years of experience, notes that REALTORS® who are early in their careers probably spend everything they make “because they need to do so.” However, it’s important to develop a business plan and a budget, she says, so they know what they need to spend each month, as well as for the year.
“Be aware of the rainy day syndrome and save for a rainy day,” Woods says. “Don’t spend every penny you make if you can help it, because I can guarantee there will be rainy days in real estate: times when a deal doesn’t close or when interest rates go up.”
“Don’t spend every penny you make if you can help it, because I can guarantee there will be rainy days.”
Even during slower times of the year, Woods stays busy because she’s looking ahead. “You must prospect continually,” Woods says. “I also believe in automated systems that are working when you’re not, such as emails and newsletters. It’s important to reach out and connect with people on a regular basis.
“Use database marketing. I work through my database of clients and put aside time for calls and prospecting daily. I keep records through a contact management system with notes on whether someone’s daughter just graduated from college or if they had a new baby. If you don’t remember them, they won’t remember you.”
At slower times of the year, Woods reviews her systems and ensure that they are up-to-date. She also takes some “me” time to go to the gym and makes more time for her family, since time is a commodity that can be scarce during the busier months.
Woods also takes time to build up her networks. She has created a chain of REALTORS® across Canada whom she can turn to when a client needs a referral in another market.
“I’m hugely into networking and brainstorming,” says Woods. “I arrange an annual get-together for us so that everyone knows someone they trust in other markets. It’s nice to be able to send clients to someone who will take extra special care of them.”
Tips for Surviving the Slower Periods:
- Build up your rainy day fund
- Put savings into a separate account – if you don’t see it, you can’t spend it
- Host open houses for colleagues to make contacts
- Phone people to say hello
- Join groups and volunteer
- Get all the training you can
- Never give up.
by Elaine Smith
Sources: Lydia Ingles, Don MacDonald, Georgiana Woods