There can be no argument about the fact that selling real estate has become more challenging in recent times. However, embracing change and making it work for you will enhance your chances of success.
Real estate industry challenges
Every industry, regardless of its function, faces certain challenges. Some of these have been there from the very start and will always play a role in any individual’s career. However, real estate agents and those involved in the property industry have had to face an inordinate number of new challenges over and above those that they have faced during the last couple of years.
A property market that seemingly slumped to all-time lows, a crackdown by the banks on bond approvals and dramatic changes in the required educational standards have forced many real estate agents to leave the industry for good. And yes, while the pie may indeed be bigger for those who remain – the challenges associated with earning a decent living have changed and will continue to change the real estate landscape forever more.
The real estate agents’ perspectives
We asked three leading real estate companies for their thoughts on what they believed are the three top challenges that modern real estate agents face. And while we would have thought that issues surrounding the amount of commission paid would have played a role, this, interestingly enough, doesn’t seem to feature on anyone’s list.
Gerhard van Rensburg, the national franchise sales and training executive at Leapfrog Property Group, highlights these challenges:
1. Continuous compliance with all the real estate educational regulations as prescribed.
2. Continuous compliance with all other real estate industry regulations as prescribed.
3. Earning a good living at the same time.
“We believe that the sooner agents embrace the challenges that form part of their business and adjust their abilities to make room for those challenges and find solutions, the sooner those challenges won’t appear nearly as big as they seemed in the beginning,” he says.
Bill Rawson, chairman of the Rawson Property Group, notes that while a great many challenges face estate agents in property marketing, thorough training does help agents overcome what he believes are the three most common challenges faced by those selling property in this country:
1. Continuously finding enough stock at a time when stock shortages are the order of the day. “We teach our agents to frequently canvas the area by walking from door to door with leaflets, by phoning potential sellers, by doing free valuations and by making their name known through adequate signage in the area whenever they have a home for sale or are doing a show house. The good agents today will make use of the Internet to advertise themselves through blogs and social media.”
He believes that the best way that agents can market themselves, and in the process generate more leads, is by establishing a trusting client base whose word-of-mouth recommendations to others will lead to more business. On the other hand, one of the biggest mistakes agents make is to fail to keep contact, if necessary on a daily basis, with all prospects they are dealing with at any one time — even if they have nothing new to report, it is still important to keep in touch.
2. Pre-approving bonds and getting buyers to meet the banks’ lending criteria. “The banks’ lending criteria are strict at the moment and, in many cases, they are asking for deposits of 10% to 20%, which can be quite an issue for many buyers and in turn estate agents. To overcome this, the agent can use a reputable bank originator to help him lower the deposit or eliminate black marks on his credit record and get the bond approved. If this fails, then the agent will have to try and show the buyer that he needs to settle for a more affordable home.
3. Convincing the 30% to 40% of home sellers who insist on trying to overprice their home to accept a realistic market related price. “Any estate agent worth his salt will have access to statistics on sales in his area,” says Rawson. “He can use this data to show sellers similar transactions that have taken place and to show them the true market value of their home. The agent can also show the seller that overpriced homes will almost always stick on the market – a fact that will deter anyone who is selling to buy elsewhere. All Rawson agents can have access to a variety of statistics and data which will assist them in determining the true market value of the homes they are marketing. One of the most powerful tools that our agents are provided with in this respect is our Rawson in-house information portal, which has Deeds Office figures for most properties in the country and can give agents many market comparisons with which to work.”
Harry Nicolaides, CEO of Century 21, says that he has been asked this same question countless times in the 25 years that he has been in the industry and his answer will always be that besides challenges faced in the ordinary course of business, there are no real challenges facing estate agents except for one and that is with whom they choose to do business.
“Policies, requirements and procedures change regularly and adapt to external factors, including legislative requirements, marketing trends, systems and many other dynamic changes. This, however, is true for all industries across all markets and all the players across all these industries adapt and continue in growing their businesses and markets. Why then should it be different for state agents? Sure, new laws are promulgated to reflect current situations and current inadequacies, new standards are introduced as well as new technologies and it is the function and requirement of any professional agent who wants to succeed to embrace these changes, get updated and continue offering the best service, product and advice to their clients.”
He states that the property industry is not immune to new requirements and standards being implemented regularly and just like in the financial, medical, mining, education and manufacturing industries (to mention just a few among thousands), estate agents are also subjected to these in our very own industry well.
Nicolaides says: “Having said that, if we want to talk about the popular topics that are being defined as ‘challenging’ for estate agents, my views are as follows:
1. Estate Agency Affairs Board (EAAB) accreditations – in principle, there is nothing wrong with getting accreditation via the various EAAB NQF and RPL programmes as the net result of all these is the gaining of knowledge and training for the agent and these can only add to the professionalism of the agent who ultimately benefits from them via their offering to clients. This is not a ‘challenge’ facing estate agents, but rather a requirement that has a fantastic consequence of uplifting their capability to become market leaders. In other words, it is also for their own benefit and they should embrace these.
2. The ever-changing and sometimes restrictive bond lending and qualification criteria coupled with rising interest rates – well, exactly what do we estate agents expect? Do we expect that banks grant bonds on every single application at any given time in any given cycle? All industries across all fields have their downward and upward cycles and the property industry is not some special category that must be excluded from these trends. In any case, we are fortunate because in our case when banks become restrictive on home loans or interest rates rise, the price of properties generally decreases accordingly, resulting in a favourable consequence that should not have a diverse effect on a professional agent’s ability to retain market share; and vice versa, when home loans are less restrictive or interest rates drop, house prices generally go up. So, there is a balance. This is not a ‘challenge’ facing estate agents, but a simple adaption to changing market conditions. The ‘challenge’, if there must be one, should be remaining professional and passionate at all times and in any cycle so that a true professional agent will always succeed and maintain their market share in any downward or upward cycle.
3. Technology advances – again I do not believe that this is a ‘challenge’. It is simply a new way of marketing properties and a new form of communication in our industry and agents should embrace it and become updated on these new systems and tools and use them for their own professionalism and for the benefit of their clients. Life is easier and richer now with the advent of television, personal computers, smartphones, emailing and websites so agents must not fear new technology. Most property searches by prospective buyers start with Internet searches; this is a fact that cannot be ignored and the ‘challenge’ for agents is to make sure that they are represented on the Internet and again, if there should be a challenge, it should in fact be ‘challenging’ their own principal or their own brand to ensure that they offer these new technologies to them.”
How agents can rise to the challenge
So how does Leapfrog Property Group assist its agents on the ever-changing playing field? “We provide our agents with maximum support in meeting all the educational requirements, and to ensure compliance with all other industry regulations as prescribed,” says Rensburg. “Our group’s learning programmes assist our agents to incorporate all these matters into their daily operations so as not to distract them from their main goal, which, of course, is to earn a living.”
Nicolaides says that Century 21 resolves these seemingly ‘challenging’ issues that agents have by providing them with relevant motivational courses, training programmes and guidance with regards to getting accreditation with the EAAB, current general market conditions and marketing techniques, home loan application facilitation and updated tools and systems with regards to technology for optimum marketing of their services. Only this way is their effort being complemented by the brand and principal and they are rewarded by making relevant profit for themselves.
Make your brand work for you
“My advice to estate agents is to ensure that their brand and principal, whoever they are, are relevant, updated and doing all they can to ensure their agent’s success,” adds Nicolaides. “The days of the brand or principal being solely responsible for their success are long gone and in fact it is now the estate agent who is the most important aspect of whether a brand or principal is going to be successful or not. The profile and market demand for a qualified estate agent has grown tremendously in the last decade, and especially right now with the new EAAB criteria, and agents must never under-sell themselves or their services as it is they who are solely responsible for the success of a brand or a principal.”
He makes an extremely valid point when he notes that agents should ensure that they join a brand or a principal that can deliver on all these ‘challenges’ to ensure they have a profitable and rewarding professional career.
“Agents are now spoilt for choice of where to offer their services and they should investigate opportunities carefully before decisions are made. My advice further is that their decision should never be based on percentage commission split solely because, more importantly, it should be based on relevance and continuity for their own long-term career and financial security,” adds Nicolaides.
Challenge case closed
So there you have it — and while it’s interesting to note the differences in opinion one thing has become abundantly clear, regardless of what you regard as a challenge, the time has well and truly come to face those challenges head on and remain focused on what should have always been a top priority – being the best you can be in an ever-changing real estate landscape.
“The ‘challenge’, if there must be one, should be remaining professional and passionate at all times and in any cycle so that a true professional agent will always succeed and maintain their market share in any downward or upward cycle.”
News Source: (Lea Jacobs)