Your number one job as a real estate professional is to be a resource to your clients and prospects. We’ve all heard the phrase “trusted advisor” and part of that obligation involves becoming an expert.
If the market is slowing down in your area as the year comes to a close, shift your focus toward educating yourself on the latest changes and trends in the industry so you can hit the ground running in 2020.
FHA changes to condominium financing. The changes that came into effect on October 15, 2019, will create tens of thousands of transaction opportunities across the country. Now, when the FHA approves a condo project, they’re approving it for three years instead of the previous two and they’re being much more flexible with how many investors can be involved in that project. Previously, a certain percentage of the project had to be owner-occupied; now, by lowering that percentage, they’ve made it possible for more condo projects across the country to be eligible for FHA financing. This long-awaited change will help a tremendous number of first-time home buyers get off the fence and onto the property ladder.
Adjust your Dirty Dozen to include someone on the planning board. Your Dirty Dozen is your group of advisors who work around the real estate industry but who are not REALTORS® (like mortgage and insurance brokers, title company reps, etc.). As you plan for 2020, I strongly urge you to include someone from your city or county planning and development board. New construction is slowing down due in part to the cost of material, lots, labor and negative media reports so creativity on the part of municipal planners will be necessary to make new construction – especially in and around urban centers – more affordable.
In the community where I live, if a homeowner had an apartment on their property for their parents or kids returning from college, that apartment had to be 800 square feet or less. In a rural community made up of old farms like mine, someone’s “apartment” could very well be a couple of thousand square feet or more and still be smaller than the main house. In fact, a lot of the elderly farmers wanted to live in the apartment and have their kids take over the main house and mortgage payment. Recently, the bylaw was changed to increase the allowable square footage, which actually added value to approximately 500 homes by a couple of hundred thousand dollars in my small community of 9,000 people. I discussed this change with a local agent who saw it as a window of opportunity to go door knocking, and as a result, he believes he will list 45 of the 500 homes, which are owned by seniors who want to capitalize on their increased property value.
Identify and take advantage of trends. According to a report by the National Association of Hispanic Real Estate Professionals, Hispanics accounted for 39.6% of U.S. household formations and Hispanic homeownership gains represented 62.7% percent of the U.S. net homeownership increase. If you’re a broker/owner, diversity in your office is a great priority if you want to stay ahead of the curve.
Be the solution. It is reported that more than a hundred million online real estate leads were generated last year, but there will only be approximately 5.1 million transactions next year. Obviously 100 million leads don’t represent the actual number of people who want to close a real estate transaction because people have registered on multiple sites. Concentrate instead on building your business by being the solution for the people in front of you – your existing sphere and client base – so they will eagerly refer you. Use technology as a means to better communicate or provide service to your clients, not because it’s the latest shiny object. Use social media strategically to promote your service and stay in touch with your peers, community, and clients. Build your arsenal to include tools and resources to both educate yourself and share with your clients to help position you as their trusted advisor. Here are a few I suggest:
- Down Payment Resource® tracks more than 2,400 sources for down payment assistance and grants.
- FDIC’s Money Smart offers free resources to help learn and teach personal financial management.
- Freddie Mac’s Working with Real Estate Professionals provides materials and resources to enhance your role as trusted advisor.
The best way to compete against big marketing companies that are spending millions, even billions of dollars in the real estate space is to be the expert your client needs you to be. At the end of the day, they want to know how the trends, the news, and the market affect them, and it’s up to you to provide the answers.