Real estate business

How to keep a real estate business afloat in a crisis

Realtors are independent contractors and all independent contractors work without a safety net. No unemployment benefits, no employer-sponsored health care, no 401k-equivalent contributions. In return, they don’t pay taxes on every paycheck and they have the freedom of 1099 employees. But when the economy falters, 1099 workers are the first to suffer. In a crisis like the one COVID-19 has brought us, as with the 2008 recession or the months following 9/11, the independent entrepreneur can only think of one question: how long until my next deal? Can I pay my rent? How long will my savings last?

There are no ready-made answers to these questions. All over New York, across the United States and around the world, real estate agents, mortgage brokers, waiters, singers, instrumentalists are wondering the same things. And the same goes for small business owners like me. We share the concerns of these independent contractors since we too fly without a parachute. For us, the questions are more like this: how to do the payroll? How can I repay the loyalty my employees have shown me without throwing myself and my business under the bus? What functions can the business survive without performing? What I have learned, in my life as an agent, and now in my life as a small business owner, is this: be brave! Act quickly and intensely enough to solve not today’s problem, but the problem a week from today, or a month from today, or three months. Now is the time to act. Although some decisions look different, they are similar to the agents and small business owners who support them. Here are some ideas for agents:

● Do you need all those cable channels or can you use basic cable (which probably supports your internet service as well) and find out more, or rent the shows you really want to see by going online.

● Do you need a landline and a cell phone? I’m not sure I need both, even as a business; I’m looking to see if I can just forward all calls from Warburg Realty to the appropriate person’s cell phone.

● If you spend days at home, can you sacrifice your personal marketing plans and do some real personal marketing – contacting people directly by phone, or by email or FaceTime. Or create a few virtual groups on Zoom, to discuss books, or opera, or sports, or what everyone’s cooking for dinner, or just to help you and others in your sphere feel less isolated.

● Let’s all cook for a change, even though we can always get food delivered to town. Cooking is fun and a great stress reliever. Plus, it’s a lot cheaper than meal delivery.

Speaking of stress relievers, let’s not forget yard work for those of you out of town. Pick up the remaining leaves. Start sowing for your vegetable garden. Establish a schedule for pruning plants that need pruning in the spring. Connecting to the basics of life, like tilling the soil or cooking a good dinner, helps us remember that this too will pass. The more anxious we are, the more cortisol we produce and the less our immune system works well.

I try to keep all of this in mind when planning the future of my real estate brokerage. What steps do I need to take NOW to ensure that we will still be strong three months from now? Are we looking to mitigate rents? Are we reducing staff or their salaries? How will our insurance, or the government, help manage these expenses? We have already taken steps to remove all non-essential items from our overall budget, including events (we would not be able to do these under any circumstances), conference attendance (mostly canceled for the foreseeable future) and non-essential computer functions.

For the rest, we’ll wait and see. What I have learned from the crises Warburg Realty has faced so far is this: the sooner you act and the bolder you are, the more likely you are to live to sell another day. New York will still be New York when this is all over. The city always bounces back. I saw time and time again, in 1988, in 2001, in 2009, that New Yorkers were filled with excitement as these traumatic events came to an end. Markets rebound. Optimism returns. Sales are starting to explode.

Join me in making a plan to stay there. We’ll toast to each other on the other side.

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