In this week’s episode of The Lad, we look at the real estate industry and how it works and the challenges and rewards that come with being a real estate agent.
First up, a quick recap of the current boom in home-buying.
There’s an estimated $13.5 trillion in home purchases worldwide this year, according to research firm IBISWorld.
That’s up from $11.9 trillion in 2016.
In 2018, the market value of the largest home-equity deals fell nearly 20% to $10.6 trillion, according the real-estate brokerage Trulia.
This means the market has been trending upward for quite some time.
“There’s a lot of pressure to get a great deal, but there’s also pressure to make sure you’re doing it right,” says Jim Haines, a principal at Hainers Real Estate in San Diego.
Hainys company, Hainer Properties, handles the majority of all U.S. home sales, and he has seen this trend accelerate in recent years.
“You can see the real economy has taken off,” he says.
Hains says the trend in sales is the result of an increase in mortgage originations and a more flexible marketplace, with buyers being more flexible about how they purchase a home.
“As you know, when you’re buying, there are going to be a lot more choices,” he explains.
“The more choices you have, the more options you have.”
Hainres says this flexibility has created a real opportunity for real estate agents, as homebuyers have been forced to make more informed decisions.
“When they’re trying to make a decision, they have a lot to think about,” he said.
“It’s a little bit like the NFL or college football, where the best quarterbacks don’t play the best teams.”
But that doesn’t mean that agents aren’t getting value from their work.
“I think the key is to not only think about your best interests, but also what’s the right value, right now, and how to get there,” says Hainen.
Real estate agents can earn commissions if buyers choose to buy the property through a broker, but Hainens says the real value is in the long-term relationship.
“We can provide a service to people who want to buy a home, who want the opportunity to purchase a property, and the value that comes from that is really huge,” he adds.
“They’ll be happy.”
Here are five ways agents can make a real impact on the real world.
Take on a project that makes sense for you.
A big factor in real estate development is a project’s financial viability, says Jeff Cushman, the managing director of real estate firm Cushmans Residential Advisors.
“If the project is going to make sense for the seller, then that’s a deal-maker for the buyer,” he tells ABC News.
The key is figuring out what a project needs and what it can afford.
“This isn’t just about buying the property, it’s also about the value of what the buyer can expect to pay for the property,” Cushmen says.
“A project with a lot less value is one that might not make sense right now.
A project that is overvalued is one with a long-run financial impact.”
Be proactive in your negotiations.
Realtors are looking for projects that can bring in a significant amount of revenue and make a significant impact on a community.
“Realtors want to see projects that are going in a positive direction, and that can be financially sustainable, which means having a high quality of life,” Cuspert says.
But Cush says he doesn’t have a problem with people taking on projects that may not be in the best financial shape, as long as the buyer has the means to pay back the loan.
“What I find is people who are going for a project with great financials, and a good project that’s going to bring in an important revenue stream, then they’re going to want to negotiate, but they should be doing it with the buyer in mind,” Cusher says.
Take a proactive approach.
“Agents have a fiduciary responsibility, and if they are going against the advice of a broker or someone else who has made a decision based on information provided to them by the broker, they should follow that advice,” Cushing explains.
Real Estate Brokers are often seen as a facilitator of the realtors market, helping them make a good offer and help the seller to understand the potential value.
But the realtor’s role is more important.
“In my opinion, the realty broker should be a facilitators of the buyer’s decision making process,” Cusspert says, pointing to the role the real house has in helping the buyer to make