People only pay attention to marketing when you are offering them something that will benefit them. When marketing and you’ve targeted prospective clients you have to communicate what those benefits are. In real estate, like any other market the benefits of homeownership change with the economic environment. When interest is low your mortgage payment will be less which creates an incentive to buy a house that you might not be able to purchase if interest rates are higher. . If rates go low enough you may be able to purchase that dream house you were unable to afford when rates were high. If the cost of your monthly mortgage payment is lower than 30% of your gross income it should loosen up your finances and allow you to make some luxury purchases, or do some traveling. You may also be able to swing a 15-year mortgage instead of a 30-year commitment and pay your home off in half the time. Pay double the principal and pay it off in 7.5 years.
Unfortunately, there is a negative side to having a low-interest rate. It tends to create a seller's market as it did over the past few years as we were shuttered in from Covid. Rates were extremely low, and in a town like Las Vegas housing inventory was low. Builders have been reticent to construct large housing tracts since the recession of 2008. This scenario puts the seller right in the catbird seat with agents receiving 20-odd offers as soon as a house hits the market. Buyers are faced with wait lists and bidding wars, leaving many with no choice but to go to extreme lengths to keep offers competitive, including waiving appraisals, inspections, cash offers, and offers substantially over the asking price. A low-interest market can be great for the seller but a tough road for the buyer.
You have to communicate what is best for your client. Should interest rates climb to a level experienced in the mid-eighties with interest rates above 15% it might be a better time to rent until interest rates recede. Rents will typically go up in a high-interest rate environment, but a client is typically taking a year lease and is not locked into a 15 or 30-year commitment. Marketing rentals can be lucrative. The usual compensation is the first month’s rent. Not as exciting as a 15 or 20-thousand-dollar commission, but if you get enough of them in your pipeline you can do well with them. A big upside is there isn’t as much paperwork involved compared to a sale.
When it comes to renting or buying, you are a professional. Make sure that you are marketing the correct content to your target market. A Boomer who has lived in the same house for forty years may be interested in downsizing or moving to another state to be closer to his friends and family. He may not be looking for a rental. A millennial couple who have started their careers and have children might already be renters and are looking to upsize their apartment or get something in a different neighborhood that is closer to work and has more amenities. All marketing is communicating the best deal for your client. If what you are offering doesn’t benefit them then time is wasted.
The biggest mistake agents and other salespeople make is marketing for themselves instead of their clients. Nobody cares about your story unless it pertains to them. A billboard on a bus bench has a picture of a real estate agent saying “Call ME.” Call me for what? This does not incentivize a client to get in touch with you. Marketing with a message meeting the client's criteria is important.
This is a low marketing strategy because it’s designed for the agent, not the audience. You have to think about what a client in your target segment wants and needs. The first thing is usually money. The seller wants as much for his property as he can get, and the buyer wants in on a sale that is below market. Other things to think about are amenities, like shopping. A home in an active community is important to some clients. Are there events going on like theater and music, places where you can enjoy yourself and meet new friends? Are there biking trails, or walking trails? Does the house come with a pool or is there a community pool and gym? What are some of the layouts they will be looking at as you take them through a neighborhood? Are the houses new or are they older and in need of repair?
Pay attention, listen. Listen to what they want. Once you find out what they want then it’s time to educate the client on the particulars of neighborhoods and homes that you are showing them. Display your knowledge and give out as much information as is practical. Disseminating information increases trust and your professional value. Knowledge is key. Without it, the client doesn’t need you.
Robin Basichis
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