Work in Real Estate? 5 tips for overcoming a slump in home sales

After two years of a red-hot market, it is time for real estate and mortgage professionals to prepare for a downturn in their business.

earlier this summer housing prices were on fire. Now there is talk of a “housing slowdown”. Due to higher mortgage rates and more people vacationing this summer, US current home sales fell for the sixth straight month in July, the longest streak of declines in more than eight years.

One of my clients in the Midwest recently put his house up for sale and has no interested buyers – none. A few months back, we were sure that it would sell out in a few days. The plan was to sell the house and pay off his construction loan on his new home before converting to a permanent mortgage. Now, that plan may need to change.

Several mortgage companies have already laid off thousands of employees, and one company, Sprout Mortgage, based in East Meadow, NY, closed in early July. Real estate brokerage companies such as Compass and Redfin have also cut their workforce.

Real estate is cyclical, and while sales won’t dry up completely, anyone involved in the industry should get their finances in place now if the current recession lasts several months.

Here are some tricks to consider:

Build an Emergency Fund Twice as Much as a Salaried Employee

No one wants to be caught borrowing money to pay their bills. whereas put enough money away While it’s normal to cover six months’ worth of expenses in a savings or money market account, it’s best to plan for the long term if you work in a cyclical industry.

Consider keeping a reserve of six to 12 months available to cover your expenses, which is about twice the amount recommended for salaried jobs.

take control of your lifestyle

When the market was booming, you may have started spending more money than usual – dining out often, buying new technology for the home, and taking more vacations. Many families can save hundreds of dollars each month by eliminating or minimizing such expenses.

Review your spending over the past year and determine how you can save money that may be needed to help save cash.

Delay any major discretionary purchases

if you’re saving for a new car Or other large discretionary purchases, consider putting them on hold. This money may be needed to pay for essential living expenses. to see maintain your current vehicle For the next six to 12 months instead of taking the risk on a new loan with fixed monthly payments.

Pay off any committed major expenses now

Review your upcoming expenses to which you are committed and determine if an item can be paid for now with surplus cash flow. For example, if you signed a contract to renovate a home to begin in a few months, pay most of the estimated expenses ahead of time, or know that funds are set aside. When your home project finally begins, you may need those renovation funds for essential expenses.

continue marketing your business

Home sales may be down, but many people still want to sell their home and buy a new one during the coming year. How can you make sure you are top of mind when sellers need to sell, or buyers need to buy?

Review your list of top sources for referrals and connect with them now. Don’t wait until you have a hard time starting business-development activities. Be active on Facebook, LinkedIn and other social media channels to make sure you continue to make sales to potential sellers. Try telling someone new every day what you do for a living!

Partner and Wealth Advisor, CI Brightworth

Lisa Brown, CFP®, CIMA®, is the author of “Girl Talk, Money Talk, The Smart Girl’s Guide to Money After College” and “Girl Talk, Money Talk II, Financially Fit and Fabulous in Your 40s and 50s”. He is the wealth management firm CI. Practice Area Leaders for Corporate Professionals and Executives in brightworth in Atlanta. For nearly 20 years advising busy corporate executives on their finances has been his passion inside the office. Outside the office he is an avid runner, cyclist and supporter of charitable causes focused on homeless children and their families.

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