Many agents
in Canada are experiencing challenging times. Transactions are down significantly,
consumer confidence is low, and the media only exacerbates these issue. Many
experts expect a mass exodus of agents from the business throughout 2023.
From a consumer
standpoint, poor retail clients don’t know how to interpret the wide range of
data bombarding them. There are still multiple offers in some markets, prices
are falling in some neighbourhoods, and we are experiencing one of the hottest
rental markets on record.
The problem
is the consumer is actually scared of transacting in this market. On the
selling side, there is confusion regarding the worth of a person’s house, and the
buy side is even more daunting.
Buyers are expecting
the market to continue to fall; therefore, offer prices are trending down. At the
same time, sellers are digging in their heels, not wanting to sell their house
for a lower prices. We are seeing lower inventory levels, and buyers are looking,
but most people are scared of transacting right now.
The question
is: who is transacting? The answer: The investor.
Investors have
been sitting on the edge of their seats, licking their chops. In fact, they
have been waiting for many years for this current shift in the market cycle
where the best opportunities present themselves.
Warren
Buffet, a world-renowned investor famous for his insights, profoundly declared
an investor’s motto: “Be fearful when people are greedy,” which typifies the
last decade of mass purchasing and double-digit appreciation. Buffet finishes
the quote, “Be greedy when people are fearful.”
Investors
look for deals when the public is scared and sitting on their hands, which is
an excellent time for liquid investor clients. The challenge for many agents is
understanding how to work with an investor client.
Investors
are a sophisticated clientele as they are typically more educated than most
realtors because they have invested in themselves to become educated, plus they
have money in the game. Investors know rental rates and expenses and want
details like the expected return on investment (ROI), the property’s net
operating income (NOI), and cap rates.
Herein lies
the issue for realtors. Investors can tell immediately whether a realtor
possesses the knowledge and skillset to serve them adequately. A common
scenario many investors experience is this: the investor provides the agent
with their investment criteria consisting of property type, price point,
cashflow expectations, ROI etc. The agent typically provides the investor
prospective properties via the proverbial email drip campaign, which a) puts
all the onus on the investor to crunch numbers and b) the properties provided
often make no financial sense, completely missing the mark on any of the
previously stated investment criteria. Once this happens, the investor is
moving on to the next realtor.
Agents fail
to realize that the investor is not waiting for a life event like a death,
divorce, or work transfer to transact. An investor is always looking for deals,
often transacting multiple times per year. Investors are not emotional buyers;
they often purchase high-priced real estate and will become loyal clients when
the agent provides the investor properties which correspond to their criteria.
Another
benefit to understanding the language of investing and possessing the
knowledge, skillsets, and tools to work with investors successfully is lead
manifestation.
Lead
manifestation fundamentally changes how agents interact with anyone they come
into contact with. Agents are always looking for ways to maintain relationships
with their existing databases. Instead of the latest market update,
conversations can be centred around building wealth, which everyone is
concerned with and eager to discuss.
Agents can
engage people by having conversations centred around retiring earlier, quitting
their day jobs, going on more and better vacations, or simply building
generational wealth. Agents can have these conversations with virtually
everyone, including current and past clients.
Consider
this: past clients already know you; they trust you. Why not go back to them
and get them excited about the idea of building wealth, which will only lead to
more transactions for you and help them achieve higher success?
Lastly, an
agent must consider their retirement. Agents all know they don’t have a pension
plan. When it comes to retirement, the day they stop selling is when the
commissions stop flowing. This is why it’s so important for agents to invest in
the industry they are in and purchase investment property themselves. Even one
property can change a person’s life, and it’s no different for agents.
Source By: Real
Estate Magazine