It’s not too late, you know. Remember that first draft of your 2012 To-Do list was created in the hustle and bustle of the year-end business cycle and the chaos of the holiday season. Before we slip out of the first quarter, there is still time to take another look at the reality of the day and make a few adjustments. This piece has been created to give you some ideas.
First of all, remember that 2012 is a presidential election year. Regardless of your politics and philosophical perspective, the fact is that somehow, magically, economies tend to get better around this event. There has been no small number of positive turns over the past 60 days. Unemployment rates are down and the Dow Jones really, really wants to blow past 13,000. The real estate marketplace is showing excellent growth, and for the first time in years, the media are beginning to report the “top 10 places where housing values are going up.” Consumer spending is up (albeit on credit) and overall attitudes are looking quite positive.
No one is suggesting that Americans should declare Friday to be a national party day, but overall there is clearly a positive feeling in the air. For an industry that has been peering out of bunker slots for the past few years, this must be taken as a positive sign and that, in turn, calls for a positive response.
As a starting point, revisit your “surf’s up” action plan. Most of the brokers we work with have been creating a list of changes that they plan to implement once they receive the signal that normalcy has returned. Many of these lists were started back in 2009 when survival was clearly a question and brokers said to themselves, “If I survive this downturn, I am never going to make this or that mistake again.”
The single most popular item on the North American real estate broker’s reform list seems to be the adoption of universal accountability. Brokers declared that if they survived the downturn they would never again operate a business in which they are the only accountable participants. Universal accountability exists when everyone working with the brokerage accepts full responsibility for the success and yes, the profitability, of the firm.
The second most popular item on the list sounds like a New Year’s resolution and goes something like this: “I promise I will take charge of my business. I promise I will be an effective leader with a clear vision and a dynamic action plan.”
The fact is that our industry sort of lost its way in the leadership department during the last 25 years. It was during that period that the boomer generation agents popularized the mantra “I don’t need no stinkin’ boss.” Today both X and Y generation agents understand the need to have someone on the team that can glean a vision from the big picture and who can manage human and financial resources into the realization of that vision for the benefit of all concerned. They may not want a “boss,” but they very much want a leader with a vision, a plan and the passion to make them happen. They understand the benefits of today’s technology and the opportunities created by the new consumer. They just need someone to help them bring it all together. The awesome role of the now common “team leader” reflects these developments.
Another popular To-Do list item traces its roots back to those firms who waited too long to get on the short sale land rush and missed the distressed property ground floor. Now these folks are lining up to not make that same mistake relative to the rental play.
The industry has been hashing out the rental issue for the past two years. Thankfully it has overcome the initial threats of the naysayers who suggested that home ownership was on the rocks and that rentals would become the rule rather than the exception. The industry now understand that, for a variety of reasons (higher mortgage eligibility requirements, lower wages and salaries, high student loan debt for instance), more Y generation households, compared to generation X households 10 or 20 years ago, will now have to wait a bit longer to be financially strong enough for home ownership. This “rental delay” is creating another great opportunity for brokerages that understand that the draconian property management of the past has now morphed into the more Marriott-like rental practices of the present. The new objective is to build relationships with tenants that will mature when they are ready to purchase.This new trend also ties nicely into the fact that more and more foreign investors are moving into residential property ownership and will be seeking enlightened management options.
Foreign investors also appear high on the broker list. In 2011, foreign investment in American real estate continued to grow in leaps and bounds. In communities like Miami, more than 60 percent of residential real estate was purchased for occupancy or rental by foreign investors. This raises two possible additions to the brokerage To-Do list.
The first item is to get fully engaged in the foreign investment segment of today’s marketplace. There is no need to wait for a magic moment in the future. It’s here now. An excellent starting point might be to review the results of the October 2011 NAR survey of the Miami marketplace. It offers some excellent insight into the dynamics of how this emerging segment operates. Another must is to get involved with the international market energies of your local REALTOR® association.
The second element involves identifying what your community is doing about putting out the welcome mat for foreign visitors who may be considering investment, relocation or just plain tourism. Check out local quasi-public (Chamber of Commerce, REALTOR® association and/or Economic Development) and government websites. Do they incorporate appropriate messages relative to foreign participation particularly for Chinese and Brazilian visitors? It appears as though Asia and South America will power this initial flow of capital into local real estate markets, including many markets that have had no prior experience with this opportunity.
These and many other ideas, tools and trends are just waiting to be incorporated into the traditional brokerage as it senses and investigates the next phase of its history. Before the end of the month, take a few moments to review your current vision to ensure that it embraces all of the options and opportunities that the new year has brought. We can do this.