Recession
Industry Intel | 03/18/20

 

I wish I could go back to the last recession and tell my worried self that every little thing is going to be alright.

 

I am confident of three things in this Corona Crunch:
1. We will eat something.
2. We will wipe with something.
3. There will be massive opportunity for those who are prepared.

“Out of adversity comes opportunity.” ~ Benjamin Franklin

Roger and I believe this with all of our guts.
When the Great Recession hit, it hit hard almost everywhere, but especially here in metro Detroit.
Other than burying our two boys early in our marriage, the Great Recession was the hardest time in our lives. Even though I knew what I was doing and had been an award-winning agent for over 20 years, the recession Did. Not. Care.
It tested us in every way possible: our faith, our relationship, our health, our confidence, and our finances.
AND YET, we are so grateful for that time. I would not want to repeat it, but the best, most fun, and most profitable years of my 35-year career began after that Recession and after my 25th year in real estate.

So if you’re struggling, have faith. We’re going to get through this, and we plan to grow in the process.

It feels exactly like 2009, doesn’t it? But it doesn’t have to BE just like 2009. We know things now.

We are much more educated, and the country as a whole is better prepared. We have short sale mechanisms in place, homeowner assistance programs, and banks have hardship support. Back then, we were making it up as we went.

Last week, I read some notes from 2011 and 2012 after we began to recover from the Great Recession and began cataloging what I wish I had known.

We made mistakes. Lots of them. Last time, Roger and I thought we were well prepared, but we were not. Six months of bills as an emergency fund was not enough. Investments got hit.

We didn’t recognize it soon enough. The market here in metro Detroit was a slow descent. The auto industry had been downsizing since 2007, long before the rest of the nation heard about it. We didn’t watch our numbers close enough and thought we just had a bad month. Then we had another bad month. Then it was a bad quarter. By the time we recognized that we were in a full-blown recession, we couldn’t recover.

We underestimated the length of it. We didn’t plan on it being so long, we had our emergency fund in place and were a little smug about it. In 2008, when the full impact hit, we didn’t close a house for six months, while still carrying all the expenses of our business.

We did not surround ourselves with like-minded people. Frankly, this may have been our undoing. After a few months into the recession, we let our worry take over, and basically isolated ourselves.

We didn’t guard our mindset. This was the biggie for me. We listing agents are used to being heroes for our clients. The intoxicating feeling you get in a multiple offer situation is addictive; I thrived on it. That vaporized and turned into feeling the disappointment of clients when I had to deliver news of delays and denials of short sales. I felt useless, and told myself so, often. It was an incredibly hard time, and though I didn’t recognize it at the time, I spiraled into a deep depression.

Listen to people who care about you. Ultimately, the stress and anxiety put me in the hospital with all manner of bleeding ulcers. Roger, my partner and the love of my life, sat me down for a talk. He said we could not live the way we were living. Our doom and gloom victim mentality was not only killing our business, but it was also killing our health. I had to stop it and I knew it. All the worry and anxiety didn’t change one thing except my health and happiness. It still doesn’t.

Take control of your thoughts. We agreed to take control of what we could or die trying. It would have been hard for things to get much worse. We hid a ton of our favorite ranting people on social media and even dodged some people we used to hang with. (I highly recommend you do that right now. Don’t make a scene about it, they don’t have to know. Bonus, depression has become a legit reason not to see people. No one will judge you, I promise.)

Change what you should. Just do it. We became implementors of ideas we learned from others, we didn’t know what we were doing, we just did what they said. We became activators of marketing plans and processes people said would work, even when we didn’t know how it would, and we gave back by becoming helpers wherever we could. Don’t misunderstand, there were no rainbows. It was still a hard and frustrating time, but something began to change and it changed quickly.

Opportunities and even moments of joy began to seep back in. We literally had some amazing opportunities that dropped into our lap right when we needed them most. (That’s God showing up in my world.)

Roger and I went on to have the best, most joyful years in our careers after that. Our mindset affects everything. We check ours daily and make a point to tell each other the good things that happened in the day.

Financial Fear. It’s real and deserves respect. It’s right up there with being physically ill. I could write a novella on the subject. Overall, what I learned is to cut expenses hard and cut them early. I’m talking carry out, beer, cable, and getting your nails done. Be brutal.

Those that cut their expenses deep and early will have an easier time of this. If the Covid Crunch is temporary, you’ll have some extra money. If it’s longer, you’ll be better prepared. Where to start? Take your bank statements and credit cards over the last six months and highlight every single unnecessary expense. Opportunities to keep your own money will become apparent with those colors glaring at you, and instead of feeling bad about it, feel freaking empowered by every dollar you cut.

Every person’s financial situation is different, so I’m speaking to real estate agents here.

Agents wake up every day of their life unemployed. We invest hundreds and thousands of dollars in marketing a product in which we control neither the price at which it will sell, or whether it will sell at all. It’s a darn crapshoot, as they say; an educated guess at best, and a bigger gamble than anything in Las Vegas.

Honestly, it takes a special kind of crazy to love this profession, but some of us are exactly that brand of crazy. If you’re still reading, it could be a giant sign this applies to you.

What we know. We are going to recover. How long will it last? I don’t know, but the good news is we are in a much better place nationally than the last recession, and we have really smart people globally working on this.

What opportunity?
Growth. If this interruption lasts a while, just like in 2008, many agents will have no choice but to withdraw from the market. There will be more business for those remaining.

If you are doing it right, this is an expensive and emotionally taxing business, so be prepared. I don’t mean to smack you with the truth, but if you found it stressful being an agent in last month’s market, you better buckle up. Because if this doesn’t settle down soon, we are going to be in a real estate rodeo, and your clients will expect you to know how to RIDE. So calm it down with the woe is me and learn how to manage this thing.

Flattening the Corona Curve. The actions of every agent matters. Frankly, I find it irresponsible that others are waiting for “Trump”, “the government,” the National Association of Realtors, or their MLS Board to impart upon them a moratorium where common sense and personal responsibility should be. Stop doing public open houses.

This might have turned into a bit of a rant, but I’m frustrated with some of you. It’s hypocritical that Agents hide behind these governing entities when it’s convenient, and then shake a fist with “don’t tell me how to run my business!” when they want to. Take personal responsibility for your decisions and own them. It’s called wisdom, and it’s the best tool we have.

AND I’m sorry if this makes you mad, but using “but, my client wants an open house” or “I’m tired of people telling me how to run my business!” as an excuse to cover your fear of financial loss, I’m asking you to be honest with yourself, and find a better way to get the job done.

Be an innovator. We’re finding new footing, too. Instead of hosting a come-one-come-all public open house that puts everyone at risk, do a Facebook live open house, post it across all the socials, and schedule private showings with any interested buyers to minimize risk.

If a buyer is interested, and does not have an agent, they will still call you. And stop allowing overlapping showings. And keep doing all the other “disinfecting” things we have committed to memory by now. We are going to be ok.

Be a good colleague. One thing (well, two) that I dislike about our profession is we are encouraged to be competitors instead of colleagues. Some agents are so hard to deal with, I’d call them adversarial. That’s a shame because acting like that in a soft market can put you out of business. We can negotiate competitively without being adversarial. (At least, the good ones can.) Plainly stated, don’t be a Richard. (My sincere apologies to all the genuine Richards out there.)

Because when the market turns from a seller’s market to a buyer’s market, whose listing will you want to sell to your great buyer? I know my answer, and it isn’t Richard’s.

Ask for what you need, but don’t steal or plagiarize. We are a generous profession. I owe my colleagues so much; we help each other all the time. If you want to thrive through a tumultuous market, earn the right to ask by contributing back equally.

The number two thing I dislike about our profession, in case you’re curious, is throwing around our number of sales or sales volume. Nobody cares. Especially in times like this. It is definitely in the schmuckish category.

Be a positive contribution. An educated agent who takes a pragmatic approach to their business in this market will draw opportunity like a magnet. People want to work with informed, calm, and confident allies.

Also, recognize the difference between an intelligent agent and an educated agent, because they’re entirely different.

Be an influencer. Not only do great agents play a critical role in preserving and protecting values in our local market, but they also influence agents around them. Look to experienced agents for guidance in times like this, I do. “A rising tide raises all ships.” This is so true. Raise the tide.

Technology. What worked before isn’t enough. Technology is now THE dividing line and distinction between agents. Our team has been capable of being entirely virtual for some time. By virtual, I mean if our building burned down overnight, we wouldn’t miss a beat. All our documents, processes, and systems live safely and securely in the cloud. We have all the latest technology from video conferencing, live remote showings, and electronic signatures. If your broker is not providing these tools, you’re at a serious disadvantage.

A Word to Brokers. You are under a lot of pressure, but that’s what you signed up for. Those that deliver will thrive, and the competition is fierce. Agents should not have to go into your office to hand in an earnest money deposit or pick up their paycheck. Agents shouldn’t have to go into the office for anything. You should offer all the technology an agent needs to be completely virtual. Secondly, if you’re taking longer than 24 hours to release an agent’s money, there’s a problem and your agents will lose trust in you. You need to fix that.

Accommodate every request possible. I listed my first home in a virtual meeting yesterday, with the seller click signing as I went through the explanations. An agent who sold my listing requested that the buyers be able to close tomorrow at the home they purchased, which is vacant. It has no furniture and no copier, nothing. With a baby, they were reluctant to have the closing parties in their small apartment. We were more than happy to accommodate the buyer’s request.

Demand support. Agents, if your brokerage or title company is dismissing these Covid protocols or special closing requests as inconvenient, unimportant, or if they are unable to accommodate them, you need new people. We need different tools to navigate this market, stat, and they’re available. This is our new environment, position yourself to grow in it by having the proper team for support.

Evaluate everything. We have to be willing to be truthful with ourselves. Fix stuff we aren’t doing so well, make adjustments, change our processes, our thought patterns, even our affiliations, if necessary.

There’s no more time to prepare. It’s showtime. We’ve had almost a decade to prepare for this, and it’s time to show up, not run around in circles wringing our hands and waving our hand sanitizers. We were thrust into some weird dimension that looks familiar but isn’t at all the same. Adjustments are to be expected. You were born for such a time as this.

Sell homes. For goodness sake, this is what we do. I see some misguided energy in the “feel bad I’m taking care of myself” department. Nonsense. Get the job done, but work smart and don’t put yourself or others at risk for any amount of money. It’s not worth it.

Be a Helper. This is our team anthem. Treat everyone as if they are in triage. Cover for an agent who isn’t feeling well. Check on your elderly clients. Deliver some groceries to their porch (don’t go in). And with colleagues, take the “tone” out of your responses, and get deals done. Help wherever you can.

Be a Solutionist. We know how this shift started; we trust history that we will recover. What is unknown is the messy middle. Find solutions to problems as they arise, but keep a calm, level head.

Lastly. Guarding your mindset is your oxygen mask in this situation.

Those of you still reading,ย  you’re the Ones. The Opportunity magnets. Find your tribe, whatever their brand, and go be the leaders you are. Opportunity will find you.

Comments

  1. Michelle Poccia says:

    Gwen, I want to shout this from the mountain top for all to hear!
    Thank you, my favorite life colleague.

  2. Amamda says:

    Awesome. Thank you. Yes. We can make the difference in peopleโ€™s lives, their security, their peace of mind. Be a helper. Be smart. Give everything you have to give. ๐Ÿงก

    • Would you please just write a book already. I’ll be your roadie. I appreciate your wisdom and willingness to always share.

  3. Brenna Harrington says:

    Thank you for this โ€” a great read and reminder. Weโ€™ve got this!

  4. Carolyn Goffar says:

    Thank you, Gwen!! I agree with everything you said. I’m glad you said it and said it the way you did! No one should take anything you said as offensive, just the truth. If anything they should be thankful for everything you just shared.
    I hope more agents take the time to read this, as it could be some of the most valuable, true and from the heart advice most agents will ever get. We need to pull together, support and help one another.
    Thank you again for sharing!

  5. Dawn Thomas is a friend and colleague and I saw her post. You rock! I found myself over the years in some of the same situations. Made some really dumb decisions. In a much better place now. Ask Dawn about REV! You and your team in my opinion would be a very good match. Brokers and agents sharing and caring…checking their egos at the door! Now may I ask a favor? I would like to share portions of this discussion with a small congregation I attend. I will give you credit for your sharing and add a few personal experiences of my own. Thank you for sharing.

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