What the FUD? How to Combat the Fear, Uncertainty & Doubt of a Shifting Market

What's up, real estate team builders. Lars Heddenborg here, the founder of Real Estate B School. Today, we're going to focus on what the FUD is going on with the real estate market, the economy in the US probably in your local area and around the world. So it is crazy. So fud, if you don't know what FUD stands for, I know some of you are like, no way is he gonna drop an F bomb to start this episode. It's fear, uncertainty, and doubt. And so the backdrop to the conversation today that we're going to have is I had been through this before. It was a hard time. I got into real estate in early 2007, before, in my local market, before there were any signs of a market shift. Looking back, right? We're really, really smart. We can say, man. In June 2007 in Charlotte, North Carolina, inventory went from, like, you know, not a lot of homes on the market to, like, straight through the roof. I think it was like 14, 15 months of inventory. And here's the good news, and I'm going to give you some actionable steps that we can. We can dig into. My sales grew from 27 sides that first 10 months in 2007 in real estate to 44 to 58, to 118 in 2010 to 178. The market was still really soft in 2011, 2012. 248 sales. That's when I did one transaction of the 248, 312, 420 or so. That's when I worked one, one day a week, like 40 days that year. So the backdrop is that it wasn't easy. There were some things I had to do that other agents weren't doing. In my market, the roster went from 15,000 agents to 5,000 agents. It was a very, very crazy time. So regardless of what you think, I'm not going to do a market update on this episode. I probably will do some of them going forward. There are kind of two schools of thoughts, right? That, that, that housing is going to be okay even as rates continue to increase because demand is still really strong. And we'll still sell six, six and a half million homes in 2022. And going forward in that sort of range, that six million range, that homes will still appreciate at slightly slower rate.

Right.

We won't see 20% month over month comparisons from the year prior as we have in the past. And then there's another school of thought that, like, it's all going to be really bad. Like mortgage applications. Are you know have plummeted interest rates like the 75 basis point hike on the fed funds rate is just the beginning. We're going to see probably 1 1/2 to 2% more increases in the base lending rate which will impact mortgage rates. Obviously some of that is baked into where mortgage rates are at already. But here's the thing, it really doesn't matter. The fear, uncertainty and doubt that we're seeing the headlines, the bleeding headlines. And when I mean bleeding is in the news, if it bleeds, it leads. So if someone can put a headline out there that says the housing market is going to crumble, the bubble is going to burst, that is going to allow folks to, to go in that rabbit hole of it's going to end. So here's what I think is going to happen is I think we're going to see a period of time where it's a little bit of softness. Buyers and sellers are a little bit of a stalemate. I think, I think it's going to go back to an okay market. I think the fear, uncertainty and doubt is going to get the best of agents that are marginal. So I think our rosters in terms of number of agents selling homes is going to come down, which is going to be a good thing. But you may be freaking out and you may be like what the fud should I do right now? Because I am me, not personally, but you are in a state of, you know, you are feeling fearful, you're very uncertain about the future and there's a lot of doubt in how do you navigate what might may be a long sort of economic winter here. And so there are three things I want you to focus on. Number one is that you can only focus on what you can control. This has been so true for me just in my parenting where if you have heard my personal story, you know that my father who since passed away but he was an alcoholic, drank. My parents divorced it for because of that reason and he drank actively until I was 15. And so he was all about. He became sober and was very active in Alcoholics Anonymous and the Serenity prayer. God, grant me the serenity to accept the things I can't control, the courage to change the things I can and the wisdom to know the difference. That is my prayer for all of you. And it doesn't really matter what your faith is. It's this concept of give me peace. God grant me the serenity to accept the things I cannot change. We cannot change where the economy is going. We cannot change interest rates. We cannot change if Buyers want to sit on the sidelines or they have to shop for a lower price point home. We cannot control. Well, to a certain extent we can control sellers and influence them, giving them good advice about where the market's headed and that sort of thing. Generally though, we can control most of all that stuff.

Right.

And so what can you control? You can control what you consume. I fallen a little bit prey to what I'm about to preach to you, so I fall prey to this as well. Watch what you consume, you know, watch where you're spending your time. What are you consuming? Are you in the headlines and the fud, Are you going into, you know, these rabbit holes of YouTube and podcasts that are all doom and gloom and are you getting away from the core activities that you must do to be successful in real estate? So how, you know, with no sales background prior, no business building experience, how, how did I come into real estate and sell 27 homes in 10 months and then 44 homes as agents are at this point getting out of real Estate in 2008 and then 2009, 58 homes and then 118. So how did I do that? I remember often, most every day telling myself like, nobody can tell you you can't sell a home today. And I remember it was a double negative. So nobody can tell you you can't sell a home today. So that means I can sell a home today. Like my goal was to sell a home every day. I failed most every day. But that second, 44 homes in my first full year in real estate, I sold about a home every week. But every day, six, seven days a week, I went out and I said, nobody can tell me I can't sell a home today. So what are you feeding yourself? What are you telling yourself? Where's your mindset around what's going to happen to me? It's this monumental opportunity where the fud, where will get the best of many agents and they'll leave this business altogether. And where does that leave you? Can you manage, you know, your, your what you're putting into your brain and what's in your heart around what's coming so that you can, you can, you know, control very little, but you can only control what you can actually control. I know that doesn't really. There's not a profound statement, but it's the truth, right? You can only control your activities. So, so that's Number one. Number two, and this is me in 2007, 2008, 2009 and 2010. Those three years and 10 months roughly, I was obsessed with new business development. So new business development is the first conversation you're having with a would be buyer or seller client. So it's called lead generating. How many hours a day are you lead generating? It's been a kind of market where homes are just selling and people are wanting to sell and people are moving and that sort of thing. So you could just have your license and sort of be successful without really applying the disciplines. And it's not necessarily specific to the real estate industry. Any good salesperson is obsessed about new business development. So using myself as an example, I had like one lead source and one script and all I did was generate leads and follow up with leads. That first conversation, which is new business development, most of them weren't ready to transact, but I would send them useful information at the time on like distressed sales or builder closeouts or you know, the stuff they thought they wanted and they never bought those homes, but that was sort of the hook I gave them. And, and then I put lead follow up sequences in place and it was tech sequences or email sequences, property alerts, those sorts of things. Whenever a good property came out, I would blast it to everyone in my buyer database. And I sort of made it a habit. I focused mainly on buyers in those early days, but I actually did the work right. I actually made my follow up calls. If somebody wasn't ready to make a move, I would call back, call them back in half the time they said they would make a move. And I would be relentless with the follow up and building systems and working on doll productive activities in the business. And when I was in between appointments so time blocked, sitting physically at my desk, 12 to 15 hours of new business development and then in between appointments, If I had 15 minutes or you know, five minutes, I was making follow up calls. I was, I was doing the job of a salesperson and I didn't have a background in sales. So this to me though like the lifeblood of our business is our ability to bring new buyers and new sellers, you know, and so I focused initially on buyers and then I put seller lead gen systems in place where I was able to build a database of sellers that indicated they wanted to sell their home in the next 1 to 12 plus months or so and just the same lead follow up systems there. But it was a crazy amount of focus on new business development. So for me it was meaningful conversations every day and I would not give up until I had whatever that target was. It's north of 20, it's way more than you think it is a meaningful conversation is a two way conversation with a decision making adult about real estate. And if they responded to an ad you put out there for distressed sales or a home evaluation ad, if they're responding to you, it's obviously a better lead. And so maybe you can bring your numbers down and still have the same conversions, but the amount of conversions, meaningful conversations you have, the amount of consultations you set, the amount of consultations you hold, so appointments held and then new buyer clients and new listings taken, right? Those four numbers, you will not succeed in any market unless you're. Well, that's not true. You could succeed in a market where everything is flying off the shelf and there's lots of transactions to go around. But if you want to take your unfair share in a shifting market, you have to pay attention to new business development obsessively and track those four key numbers. Number three, in terms of just, you know, getting through this fud, fear, uncertainty, doubt, this shifting market is. You have to know where you're going. So in late, some time, late 2009, before I started, you know, the leverage approach to real estate and bringing in people to do the parts of the job that I didn't love so much, I wrote a business plan where I was really clear. So I made all the mistakes you can make in building a business, all the people mistakes, leading and managing others and holding others up to a standard that pushed them and it was uncomfortable. And building tracking systems and I had never marketed before. So I did all this stuff that I had never done before. I just pushed through all of it. That said, I was always clear on where I was going, meaning like written out in all the areas of life that matter to me. In my finances, in my relationships, in my business, with my physical body, I knew exactly where I was going to be in the future. Three years out and five years out and at the time even 10 years out. So that 2010 plan, when the market was probably at its worst, I had a 10 year vision. So 2020 hit every one of those financial goals, every one of those relationship goals. You know, we live an amazing life only because I decided in advance I was going to get there. The market had nothing to do with it. The market had nothing to do with my success. I just predetermined that I would do the activities necessary. I would not get bogged down with all the stuff that doesn't matter, the news, social media. I would focus on what I could control. And that was what I did every day. And, and it clearly like the thing that would get me through doing the things that I didn't want to do was the vision of what my life could look like if I was consistent in those core base activities. So my question for you, as we're entering into what might be the most fud world we've ever been in, and you know, we're just divided politically, there is real stuff coming. Politics aside, real economic turmoil is coming. We've been kicking the can on all of it for a long time. And back in 2010 when I spent some time with Tony Robbins and did wealth mastery and all the same stuff, we've really managed to delay this reckoning for a period of time. And all of the reasons that you probably have your own opinions about have led us to the point where it's going to go down. But your real estate business doesn't have to suffer even a little bit. Even a little bit. You just have to commit to get better. You have to commit to do the tasks necessary to succeed, eliminate or delegate or automate everything else.

Right.

So what are you focusing on now that some you can either automate, eliminate or delegate. That's not paying you the amount of money that you want to get paid. So that's the challenge for you. That's what I'm going to lead out with. Look at where you're spending your time and really consider like, is this the best use of my time and going to lead the front stage of my business, meaning sales and marketing, bringing new business in. Is this the thing I should be spending time on today? Or are you getting bogged down and you're just not efficient with your time or you're spending on things like running business errands or running personal errands throughout the day versus just sitting your butt down and focusing on the tasks that will move you forward in a meaningful way. And so that's my challenge for you. If you want to have a conversation about your business, really dig into like, what are you doing now? What's working, what's not working? Where do you want to be in the future? I'll take you through this three year vision process and what's holding you back or what obstacles have you seen to, you know, to get from 50 sales to, you know, 150 sales? Let's say you've had that vision before, but you've never taken meaningful action. I can actually figure out with you what's been holding you back and what some of the obstacles are. And then if there's an opportunity where we can work together. We'll definitely have a conversation around it. Go to partnerwithrebs.com that's partnerwithrebs.com Real Estate B School. It's short for partner with rebuild. BS.com and we'll just get on a call and we'll talk about your business and we'll just kind of figure it out. Right. I've been there. I've been through a time like this. I feel like I was made for this time. Also, I'm so fired up around the opportunity that this uncertainty is going to create and the chaos and the economic turmoil. I am so excited about it, even though it's hitting me financially as well.

Right.

You know, my investments are not doing anything right now. They're all sort of depressed. But I'm looking at everything long term. I have a clear vision of where I'm going to be financially, and opportunities like this are like, everything's on sale and it's just awesome. And I think the worst, unfortunately, is yet to come. But these steps that I've just laid out for you will help you along the way. So much love, much respect. We'll talk to you soon. Bye. Bye.