Savvy real estate agents approach each new year with a sense of opportunity, but also with the knowledge change is always on the wind. The real estate industry was slow to adapt to the digital age and is still in the process of getting itself up to speed. However, in the wake of digital disruption, real estate agents also need to equip themselves with other skills that bring them into the new decade poised for success. Surprisingly, some of the biggest challenges and opportunities will require a return to the soft skills that make a broker and their agents successful.
Here we explore the unexpected top skills real estate brokers will need in 2020 to continue to see growth and increase revenue.
The Art of Persuasion to Combat the Likes of Purple Bricks
You are probably thinking I wasn’t worried about DuProprio, why should I worry about Purple Bricks? Although Purple Bricks entered the Canadian market with small potatoes in mind, what they plan for the future is yet to be seen. They were open for business in four markets: Ontario, Alberta, Manitoba, and British Columbia and had a modest projection of selling 280 homes in their first year. The problem is, they are highly competitive when it comes to fees, especially for homes priced over $500,000.
Purple Bricks’ pricing structure is the same regardless of the housing price, therefore people selling their homes at higher prices can find it hard to ignore the savings. The flat rate is just under $3000, with $499 due up front and the balance of $2499 due at the time the home is sold.
The best defense against the flat rate fee is to ensure you are bringing your people and selling skills to the table. And what’s important to note is that the selling isn’t directed at the property, but instead at selling themselves. Real estate agents need to be prepared to defend their 5 percent commission with the following points:
They are experts at staging a home which requires an agent to be present
Person to person interaction should never be underestimated as an important aspect of smooth real estate transactions
Commissioned agents go above and beyond such as helping to keep the home clean for viewings for busy families with children (agents can list their own unique value proposition)
Agents should be leveraging their community and personal social media channels to help sell their clients’ homes
Agent connections within the community helps to find buyers
Despite this being the digital age, soft skills will become more important as people look for a more personal touch.
Consider the International Real Estate Opportunities
Although the Ontario government is trying to discourage foreign buyers with a Non-Resident Speculation Tax, there are many lucrative opportunities available to foreign investors in the Canadian real estate market. Brokers should consider either taking a course on global transactions or hiring an agent who can specialize in this area for their brokerage.
Considering that international buyers often buy sight unseen, pay more because funds are available and also tend to pay cash, understanding how to cater to this buyer group could prove to be a major win for brokerages. The CIPS - Certified International Property Specialist Course is available online, making it even easier to hone your skills in global transactions.
With a CIPS designation, agents become part of the only international designation recognized by the National Association of REALTORS®. Agents can then provide services and complete transactions in 45 countries.
Understand the Senior Home Ownership
While seniors were once major contributors to real estate inventory, more are determined to remain in the homes they currently own. This is adding to the supply challenges in markets like Toronto. There used to be a continuum between the aging population and the younger families entering the housing market. As seniors retired, they sold their homes, often downsizing to save money and take advantage of the equity built up in their homes. This left a good selection of affordable homes for younger buyers to purchase on the market.
According to the Canada Mortgage and Housing Corporation (CMHC) in 2016, a quarter of Toronto homes were owned by people 65 and over. This is 4.5 percent more than the previous decade. While this sounds like it could be problematic, seniors are also remaining in the work force longer. As a result, they have access to more funds, which in turn allows those currently not owning a home to make home purchases. If you can begin to understand the needs of the plus 50 age group, you can help gain clients who might be looking at housing decisions in the near future.
You have an opportunity to target those looking to make home purchases they might not have made a decade ago. Some areas to expand your over 50 knowledge would include:
Using pensions, RRSP, RRIF accounts in real estate transactions
The impact of Old Age Security on real estate decisions
Helping people in this age group find homes that can affordably be renovated to allow them to age in place
As a Seniors Real Estate Specialist, a designation officially granted by the National Association of Realtors, agents and brokers can win new clients and build ongoing relationships. As well, you might just gain an edge over the competition who is more likely focused on learning more about selling to millennials.
Become Well-versed in Government Incentives and Policies
Real estate brokers and their team need to make it as easy as possible for their clients to buy or sell homes. With constant changes to government policies and incentives, it can become confusing for clients to know where they stand and what resources are available to assist in their transactions. A good example is simply being positioned to assist buyers in addressing the stress test. The Mortgage Qualifier Tool might not be known to everyone, and helping clients use the tool can provide the information they need to determine if they can pass the stress test.
While the stress test is old news, the latest government incentives to assist first-time buyers is quite new. If you understand how the First-Time Home Buyer Incentive (FTHBI) works, you can advise clients on whether or not it makes sense for them. Many people don’t realize the incentive is a form of equity sharing, which can end up costing them more money in the long run. Having a clear plan to explain the pros and cons of the FTHBI will improve the value you bring to your clients.
Although real estate brokers and agents have been focused on developing skills to address the demands of the digital age, 2020 will also require a refresher course in soft skills. Expanding expertise to include foreign transactions, the 50 plus age group and the government policies and incentives will allow brokers to explore the possibility of creating new niches and specialties within their communities.
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