Did you read the subject of my blog and think "I didn't know real estate agent's made a salary?". We don't. Self-employed. Freelance contractors. Whatever you want to call it. We are on our own when it comes to making our way in this industry, just like every other small business owner. But, this latest recession (which felt like a depression to me and many of my fellow agents) taught me some really valuable life skills for stretching those dollars I did make. Looking back, I'm proud of what I accomplished. DFW has been in recovery mode for about a year, and my business in 2010 has been remarkably improved over last year, but, I am still living the way I learned to live two years ago. The lessons I learned, to stretch our spending dollars, have become habit. They are now very deeply ingrained habits and they are the new norm. Here are a few tips that helped me get by on less:
1. If you don't have to be out on the road, then don't.
I moved my office home in Summer, 2008, when I could see that hard times were on the horizon. Not commuting from Prosper to Frisco every day saved gas and maintenance on my car. The only thing I had to do as move my files home and invest in a higher production multi-function printer/fax/copier (I like the Brother MFC for the speed and yield). Just like the weatherman tells you when there is an ice day during a Texas Winter, "if you don't have to be out on the road today, then stay home".
2. Just say "YES!"
Although I had gotten pretty picky after nine years in real estate, about favorite types of clients and locations to help them sell or buy a home, in Summer of 2008, I decided to take a piece of wisdom from the Jim Carrey movie Yes Man, "Just say YES!" When someone would call my office and ask if I worked way over in Fort Worth (which is really only about 40 minutes drive-time from Prosper, TX outside of the rush hours), I said "YES!". When someone would ask me if I would help them with a short sale, I got trained, I got certified, and I said "YES!". It felt very much like my first year in real estate again. I had plenty of time on my hands and big gaps between my closings. I remembered that I had said "YES!" to just about every request as a rookie, and that was going to be my philosophy during the recession. It was not that big a stretch to go back to working a larger geographic area and a much wider price point in my client base. Those first-time home buyers are still favorites of mine, because they make me feel so needed and I can set them off on the best course to impact great home buying decisions over the entire course of their lives.
3. Take leases!!
I never completely stopped working residential leasing. I did a few when I was a brand new agent. It was a lot of work for a little bit of money. But, the money comes in faster and can solve an immediate need for cashflow. Two or three residential leases, and you darn near have a wage. A dozen leases, and you are actually making a monthly income. You are working your hiney off - make no bones about that. But, keep your eye on the prize (survival), and keep pushing forward. A residential lease rarely takes longer than a few weeks from start to finish, and can keep groceries coming in between your home sales. Don't turn up your nose to leases. I recently worked a luxury home lease in McKinney, TX where I was able to work a fantastic lease arrangement for a client who wanted to build a home from the ground up and needed some flexibility to lease a home for under one year. Demand for leasing is still great in 2010. People need time to recover from financial catastrophes, defunct businesses, and depleted financial reserves. There are so many people in this boat, leasing will continue to be strong for at least another couple of years in DFW. Add to that the number of people moving to DFW for jobs, who still have homes to sell in other areas, and there is more leasing opportunity than you can shake a stick at.
4. Reduce household expenses.
This is a big one. And, it hurts. But, it doesn't hurt near as bad as I thought it would. Shopping began to consist of store brand groceries, sale racks and thrift store finds, and garage sale treasures. But, cutting expenses almost became a game. How could we live the life to which we'd become accustomed, but do it in a way that cost a lot less? We sacrificed our weekly movie night for a Sunday matinee before Noon every other week. That saved over $100 a month. We backed off on our cell phone programs and combined under a family plan for a savings of over $200 a month. The helpful contractors who cleaned the house or kept the lawn were sacrificed for our own sweat (and tears, like when we have to mow the yard in August). Savings there added up to another $200 a month. We've enjoyed 4 staycations in the last two years, and a one very budget-conscious getaway to Scottsdale, AZ. I learned a lot about travel deals and how/when to schedule trips, and I will take that knowledge with me through the rest of my life. We gave up the gym membership, in exchange for walking twice a day around our community. The savings there was a decent $39.95 a month, but we gained neighbors who actually know us now. The McMansion subdivision with the cold stereotype became the warm and wonderful neighborhood. This was not a sacrifice. This was a major gain in our lives. We're a cash-and-carry family now. If we want something, I get out there and work harder and earn it. The best thing that came out of this change has been that we're a happier family than we were two years ago. We do more together, and there is great family pride. Now that things are a little easier financially, we are working toward rebuilding reserves and continuing to take care of ourselves in every way.
5. Set the pride aside.
I knew that listing inventory would go way down during the recession, and we all know the old adage "list to last" in real estate. So, I set the pride of self-employment aside and joined a team during the recession. It was time to circle the wagons. I needed to be on a team of hard working agents who all worked hard to grow their businesses, and these agents needed to have been in business around the same length of time I had or even longer. I wanted to be with people who had also ridden out past recessionary periods and come out victorious on the other side. This would not be a life-long partnership. This was a temporary fix, to reduce my out-of-pocket expenses and maintain the cross-marketing of homes that comes from carrying a higher level of inventory. I made a one year commitment to a team, and I was open-minded to the option of extending that to a two-year commitment if the market had not turned around. But, I never stopped acting as a self-employed individual, who was responsible for generating my own business. It took one year, and I left the team and went back to being on my own in May, 2010. I respect the team members and still office with them. My coming to their team helped them, too. And, we are all still in business. Goal accomplished. It was a hard thing to do, setting my pride aside as the business owner, in order to join a team for a while. But, I'm the first to admit that you cannot live on a prestige sandwich, and it was actually good to have a humbling moment in my real estate career to remind me not to buy into my own hype. Real estate is a job like any other, and hard work is the only thing that makes us successful. I remember to thank God every day for my health, happiness, and well-being. And, I am grateful to be running my own business for the 10th straight year.
I know the economy is improving, but there are housing markets still in jeopardy and others still in recovery. The outlook is bright for those who will find a way to stay in the game. I hope I've given you a tidbit to take into your own real estate career, especially if you're too new to have ever been through a recessionary period before as a real estate agent. This was my second recession, but I know it won't be my last. Most importantly, remember to re-invest in your business and yourself. Investment and reserves are signs of a healthy business. Marketing materials have never been less expensive, and you'll be well-prepared to gain market share as your area improves. Your new signs, riders, frames, and keyboxes will get noticed, and you'll gain new business because your materials are bright and shiny while others are worn, rusted, and haggard.
Have a blessed day!
Ronda Allen - Realtor
Certified Purchasing Manager - C.P.M.
Short Sale and Foreclosure Resource - SFR
Texas Affordable Housing Specialist - TAHS
CEO of comingsoonhomes.com since 2005
Activerain.com #1 Realtor in Prosper,TX and Top 150 in Texas (8/2010)
RE/MAX Dallas Suburbs - #1 Office for RE/MAX in the North Texas region 2009 AND first half of 2010!
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