Please take this survey on buyer attitudes toward digital marketing services. I will send a report to each participant if you include your email address in the comments box.
It will be fascinating to discover the prevailing beliefs of online marketing from professional Realtors, Mortgage Brokers and Agents, Dentists, Realty Developers, Insurance Agents, Small Manufacturers, and other small to mid size business owners who are facing big decisions about how they’ll be doing their marketing in 2016.
Here are the 11 Questions:
Thank you for your participation and I hope the results help you make better decisions!
No that’s not the Twitter bird making noise, it’s the sound of wise International business investors and startup entrpreneurs talking about how Canada is their new bargain basement shop for opportuntiies. It’s a rare opportunity for US investors and entrepreneurs to exploit the surging US dollar and build a sound, secure, and productive Canadian investment portfolio that has nowhere to go but up.
A recent post from Jeff Hayden revealed that most big fortunes are made from capital gains, primarily from real estate. We all know that if you play your cards really well, getting rich is a very real outcome. If it’s not real estate, then perhaps there are 4 other sectors where big wealth is a high probability: pharmaceuticals, medical devices, app development and digital marketing. Interestingly, Canada is strong in these sectors.
As our natural resource companies falter, our service businesses become much more attractive. You have a chance to pick up businesses in Toronto, Vancouver and Calgary for a song. Pharmaceutical, medical equipment, and digital marketing companies are prime targets.
And how about real estate? TREB just published its July home sales report showing home sales in Toronto which are approaching 10,000 per month. That’s a record and the average price rose a whopping 14% since last summer. With the Canadian dollar continuing its free fall (some say below 70 cents US) , real estate in Canada continues to be a bargain. And Canadian businesses of any kind are a bargain. Low wages and highly skilled workers might be a once in a lifetime opportunity for US business investors.
Reality: greatest potential for growth Friendly and agreeable: Canada is the best country in the G-20 to do business with, according to both Forbes and Bloomberg. Proven: Canada led all G-7 countries in economic growth over the past decade (2004–2013) Reputation: Canada is the best country in the G-20 to do business, according to both Forbes and Bloomberg. Safe and Secure: Free trade pacts and friendly relations with US means your investment is financially secure Market size: access to vibrant world markets with a combined GDP of US$38 trillion Educated: Canada’s workforce is the most highly educated among members of the OECD, with half of its working-age population having a tertiary level education. Low Tax: Total business tax costs in Canada are by far the lowest in the G-7 and 46 percent lower than those in the United States. Excellent banking: World Economic Forum has declared Canada’s banking system to be the soundest in the world. Quality of Life: Vancouver, Calgary and Toronto rated as the top cities to live in the world.
Unfortunately, manufacturing has not returned to Canada as yet. Asia and Mexico have held a grip on manufacturing activities. With an infusion of cash, Canadian manufacturers and service providers can compete very well globally. Americans should view Canada with an eye for global access. Canada’s free trade deals internationally are liberal and attractive.
The US economy is roaring so the bargain basement reality in Canada should keep encouraging Americans with more money to invest, to buy here.
In the next few years, real estate in Western Canada will be a great buy too once the full impact of a $30 a barrel oil is realized.
Canadian business represents the biggest opportunity of 2016/2017. Investigate it and get to know Canadian companies. This is a once in a lifetime opportunity.
How’s the US Weather Forecast for 2016/2017 Shaping Up?
As we head into the fall/winter season of 2016/2017, many realtors are wondering what the weather outlook is in our region. Business entrepreneurs and consumers should take heed of weather patterns as they can affect consumer expenditure and business revenue and intentions.
The dry conditions across much of the US could spell big gains for the solar power industry. Terms such as solar shingles and power converters could become common words in homeowners vocabularies in 2017. If you own a business in this and other alternative energy sectors, I’d like to hear from you.
I’ve got a cross reference of the nation’s weather forecast from different weather reporting agencies. Let’s take a look at future precipitation, temperatures, possible storm events, and regional weather trends will denote the 2016/2017 winter cold weather season.
Selling in the Fall Season for Realtors
While there’s always been seasonality about home sales, given that most buyers wait for the spring you might already be in hibernation mode waiting for spring 2017. However, inquires about buying North American property are coming from around the world. In their locations they may be experiencing much different weather and they may see the off-season as a time to get a lower price.
Don’t close your mind to selling in the fall or winter season. There is no season for good buyers. Opportunities are rare today, and they’re ready when you make those opportunities happen for them.
The offseason is the perfect time to plan your strategy and prepare to grow your sales — don’t wait until you’re busy again.
Farmer’s Almanac Fall and Winter Forecast
Farmer’s Almanac’s Winter 2016/, 2017 Forecast is calling for cool weather in Los Angeles, San Francisco, Vancouver, Toronto, Montreal, Seattle, Minnesota and most of Canada. The southern US looks to be in for great weather this weather. With the southern prediction so balmy, where will you be spending your winter vacation in the next 6 months? I don’t think you will ever beat California for it’s constant 70 degree temps and comfort. The snow country near Denver, Salt Lake City, Tahoe, Whistler, and Boise might be the perfect year for a ski vacation.
Farmer’s Almanac’s Winter forecast is for cooler weather in the Northern US, but still above the yearly normals. That could predict a lot of snow for areas such as in Chicago, Minneapolis, Green Bay, New York, Boston, Philadelphia, Indianapolis, New Jersey and the New England region. Tampa, Orando, and Miami should brace for a wet, humid and mild winter season. It appears California’s drought conditions will continue.
You can check out specific regional and local forecasts via Farmer’s Almanac’s Website however be forewarned that they expect you to subscribe. But go ahead and do it because they’ve got handy tips on gardening, calendars and their interesting skywatch pages.
If you live in Los Angeles, San Diego, Miami, Albuquerque, Houston, or San Francisco, the weather forecast is decidedly similar every day which we all sure appreciate when we get tired of the cold and take a vacation to your city. Yet, in other areas such as Boston, Seattle, Vancouver, Chicago, New York, Portland, Denver, the changes in temperature, precipitation, and winds are a serious matter we must prepare for. The snowy condition throughout the Northern US and Canada, certainly mean we’ll need snow tires on our vehicles. I hope someone is putting them on the driverless cars too!
Next, Let’s take a look at the National Weather Service’s predictions October to end of March 2017.
This is the temperature forecast for October for the US.
Temperature forecast for the last 3 months of 2016 for the US
Temperature forecast for the first 3 months of 2017 for the US
Weather.gov Long Range Forecast 2016
The drought conditions are expected to continue in California for the remainder of 2016 which may support dangerous wildfire conditions in some regions and cities.
When you work for a big brokerage, you give away your autonomy, freedom, income and equity. You create value for Remax, Royal Lepage, Sutton Group, Century21, Sothebys, Home Life or the new kid, Engel & Volkers. How about hanging onto that equity?
I’ve known a few very successful people and what they all had in common was initiative. They didn’t sit around, coast, let opportunities pass, or let less important things get in the way. They always had their mind geared for the business they were passionate about building. They weren’t smarter. They seemed to have this vision of where they belonged and they were compelled to follow that path.
A guy I went to high school with was in the news today. His US/Canada company is valuated at a Billion dollars and it’s growing. He had that leadership quality and now all these decades later, it’s apparent he had to be at the helm of a successful firm.
Entrepreneurial leaders have faith and clarity in the sense that they knew something great was going to happen — the journey and the destination. It’s that expectation that’s made them resilient and creative to navigate their way through to success. Richard Branson, Larry Page, and Elon Musk are a few entrepreneurs who have very positive expectations. Do they have regrets?
Here’s what they really want: Freedom, Autonomy, Money, Self-respect, and to make other people happy. They’ve given themselves the licence and freedom to create their ideal, emotionally fulfilling lifestyle.
Smart Long Term Decisions
Out of millions of realtors, mortgage and insurance agents and other professionals, only a select, special few will launch their own company. The rewards are intense. Realtors such as Darryl King, Merrily Hackett, Barbara Corcoran, and Sam McDadi started off humbly and they’re doing phenomenally well. Merrily’s brokerage Sutton West Coast Realty did $22 billion in sales last year.
What About the Complexity?
Launching your brokerage rids you of your broker split, office and desk fees and gives you more funds for marketing. If you fear the paperwork and compliance tasks, you can outsource to a company such as Realty Point. They could rid you of administration tasks. And when you incorporate, you can defer income to tide you through low sales years. It’s just plain smart.
Do you Need to Start Now?
If you’re of the opinion that you should build this dream incrementally (coasting) you probably won’t have the momentum and power to get there. You can’t coast uphill. It’s wiser to start with the intent of building your realty or insurance brokerage sooner, especially during peak sales years. This intensity gets you focused to create an advantage. If you have good confidence you might even choose hypergrowth strategies to get a smart jump.
How Will You Stay Competitive?
If you’re going to be competitive and build significant revenue, you’ll want to leverage the best tools, strategies and talent. There are plenty of agents who actually need to work under your wing. All you need is a system to generate leads and convert those leads. That’s where I come in. If you and your team have a good attitude and pleasant interpersonal and business skills, clients will gravitate to you.
Clarify your process:
create a marketing plan that specifies the source, reach and capture of leads
use a digital marketing strategy that leverages all digital channels
use a prospecting strategy that quickly discovers good leads
maximize your leads with wide exposure on the Internet and local media
increase your conversions by clarifying your UVP to prospects
build your unique value proposition even further
decide on your brokerage business model
bring on one realtor who believes in what you’re doing and can help you build the correct business model
use social media to engage all your connections and build that word of mouth network
test, reiterate tactics, until your lead generation machine is purring like a kitten
I’d be delighted to help you design and manage your complete digital marketing campaign. You’ll get incomparable value and avoid making beginners mistakes.
Has there ever been a better time to be a realtor, property developer or mortgage agent in Toronto and Vancouver? Probably not. CREA, Royal Bank and CMHC are giving the thumbs up for realty transactions over the next few years. Pros are going to do well.
Agents and brokers should be looking for new ways to be the BIG Kahunas of their markets through digital marketing strategies. The payoff for some will be shocking. I hope you’re looking at 2016/17 with an eye for income growth.
RBC is forecasting continued prosperity for the Toronto and Vancouver regions including stronger employment, rising exports, low loonie, low interest rates, and strong consumer spending. BC is forecast to be the strongest at 3.1% GDP growth, with Ontario and Saskatchewan just behind.
2015 was ruined by a huge drop in energy company expenditures and unfortunately, Alberta will see further retraction. As the dust settles in the energy sector, the Ontario and BC economies will grow stronger. In fact, RBC believes Ontario’s growth will pick up steam in 2017 to 2.7%. Both provinces are expected to see full time job gains in 2016 and beyond.
“Although frothy in some areas (e.g., Toronto), we believe that the provincial housing market will continue to be supported by strong demand, which will maintain housing construction at historically elevated levels.”
Toronto and Vancouver: Home Prices Remain High with limited Availability
Toronto and Vancouver home availability and prices will continue as a big story. Nationally, CMHC predicts that home prices will continue to climb over the next two years, but at a slower rate – 1.3 per cent in 2016 and 1.4 per cent in 2017. In this first graph from a report on the GTA housing market, it’s suggested that sales are edging lower due to affordability, however the real underlying problem is a lack of housing stock for sale. Realtors need to be more creative in enticing homeowners to sell.
In Toronto, new housing starts may fall by 5% and another 10% although experts are not in agreement about that slowdown, especially regarding the new condo market. Most growth occurred in only 5 property developments, meaning there may still be untapped demand in the greater Toronto area.
Fewer new detached homes will be built in Toronto and multifamily construction will actually make up more than half of new homes constructed there in 2017. Existing home sales will drop to 87,500 units by 2017 as prices grow much too high for first time buyers. If China’s investment rule stays relaxed, more Asian buyers may support a less precipitous drop from 2015’s record home sale numbers and prices.
In Vancouver, CMHC forecasts Vancouver’ s host housing sales will slow only slightly in 2016 and 2017. Affordability is the issue that will cool sales from their record hot numbers. New housing starts are expected remain strong with 20,000 units under construction. The home resale market should grow to their highest levels in the last 10 years and moderately slightly in 2016 and 2017. 2015 was a sizzling year, rising 9% so a further 3% grow is actually fairly positive for realtors and mortgage agents.
Seniors in Vancouver and Toronto
In another story in the Advisor, it’s reported that seniors in Toronto and Vancouver may not want to sell their homes even though they may not be able to afford to live well in retirement. When seniors run out of money, they may have to sell their homes. Some may turn to reverse mortgages which are becoming a hot type of financial service.
That means much of the available housing stock may not be sold. Seniors can live in them until they die and that means a good portion of the resale market will not enter the market. Of course, creative real estate marketers may find a way to help seniors understand the advantages of selling now while prices are so high. Seniors have options such as living in low cost Caribbean or South American countries, or moving to regions of Canada that are cheap. With more babyboomers entering retirement, the sales potential of senior sellers and buyers will be of interest to innovative real estate agents.
Realtors who build their own brand of innovative services can get an edge in the coming years. Persuading homeowners to sell their home and progress with their lives, is just one example of innovation that top selling realtors will use. What else will they be doing? Take a look.
Millions of realtors, mortgage agents, new home builders, custom home builders, dentists, insurance brokers, architects, medical specialists, and vacation resort managers are all competing to be the Big Kahunas of their markets. Some will, and from humble beginnings.
The title graphic is courtesy of Inman. In the US, almost 10k agents had at least one transaction per week, or at minimum $20M in sales.
What do these BIG Kahunas do that sets them apart and launches them into continuous success? They:
establish an unbeatable/incomparable unique value proposition
find the right clients, customers and business partners
find the best mentor
get the funding required
make their clients very happy
go all out to make their client successful
help their client learn
take the burden and pain away from their clients
think creatively, innovatively and persistently to solve client’s problems
strive persistently to become the BIG Kahuna in their market
Here’s 21 Big Kahuna Success Tips
Visualize your customer – Yes, think about who you’d like as your clients and build your marketing to capture those exact prospects – dig into their lifestyle and dreams
Build a great digital content strategy as the foundation of your marketing strategy — do this strategically so each channel drives the other simultaneously (omnichannel)
Build inbound content that’s interesting, informative and sharable – this builds excitement into your brand image
Build one very strong niche – such as ecology-mindedness, tax reduction, technology, entrepreneurialism, health, local sports, business trends, job trends, education, etc — whatever subject you believe will make your agent brand stronger.
Advertise in local news flyers/sections have good reach to homeowners and buyers
Advertise via Facebook, AdWords, and Linkedin ad platforms using excellent advertising techniques
Create original and valuable stories/statistics/events for reporters/bloggers to talk about
Use your linkedin account, plus your own prospect search to connect with investors, agents, and professional people who may need to buy or sell
Use an email strategy to build prospects into your inner circle
Be Generous – Do lots of good deeds – refer business, compliment, promote, offer help to your prospects with any issues they’re having, and set a tone of giving
Be Awesome — this means being yourself but extending your sphere of interest to touch prospects dreams
Stop thinking negatively — there are no limitations, only an abundance of leads and sales – create your own leads
Take a vacation – Get Fresh! – you can’t lead if you’re depressed and worn out. Get away from the source of your stagnation or low productivity to refresh or renew yourself – wipe the hard drive for a fresh, new, strategically effective start
Use interesting apps such as Hyperlapse to create interesting videos to showcase your homes/condos/neighbourhoods.
Hire a creative/innovative digital marketer with a winning program just for you
Building and maintaining a leadership position in your market requires professional help. How many helpers do you need? Start with one, but pick someone who is awesome. If they don’t add tremendous value, you’re wasting your money and time.
I was driving by a familiar area in town one day and noticed that a large 14 acre ranch was up for sale. Right in the heart of my town. Very rare and valuable land. I wondered how many millions it would go for in the market right now.
The For Sale sign was from Daryl King, a top millionaire realtor in this area (he has a small army of 34 agents working for him now), at least tops in selling high value properties (a great niche). The property owner has many other superb realtors to choose from, however they chose Darryl King, one of the top real estate agents in North Toronto.
This happens frequently in other areas of business where people choose whoever they think is the “BIG Kahuna” in the market. It’s probably why Donald Trump sits on a mountain of cash. Despite his horrible personality, real estate executives want to work with him. When the idea of selling a luxury house comes to mind, so does Daryl King’s team.
It doesn’t seem to matter whether they’re like Mother Theresa or Genghis Khan, the BIG Kahuna’s get the business. More people are drawn to who they believe is the top dog, rather than choosing someone who is more in line with their true interests and situation. BIG Kahuna’s make the most of wide visibility, authority, and opportunity. They leverage everything from advertising to partnerships to after-sales support to ensure everyone believes they are the best and will get them the best price.
BIG Kahunas pursue marketshare, aiming to monopolize any market they can. And monopoly, arguably, is the goal of most millionaires. Of course, excellent branding and marketing can help move toward a type of uniqueness that is monopoly. By hiring me, you are very likely to dominate your city market. Be the BIG Kahuna.
Show You Believe what They Believe
Foremost in the matter of choosing the BIG Kahuna is the belief they’ll ensure success via their network, skills, or marketing power. So begin to develop a BIG Kahuna image yourself and they’ll believe in you. Good incentive to brush up on brand image strategy.
It’s one of those buyer core beliefs worth looking closely at. Simon Sinek says people will buy from you if you believe what they believe. Big estate owners believe Darryl King has similar values and beliefs, and he is singly most able to get that extra one or two million dollars, and that he might be networked with multimillionaires. Maybe he isn’t.
Buyers and sellers believe the BIG Kahuna has the connections, selling power, persuasiveness and klout.
The BIG Kahuna removes the fear and paves the way to a big sale price. Big Kahunas seem to get rid of all the pain (okay, it’s the Witch doctor that actually does that:)
King has been a top real estate agent and broker for a long time and of course over the years has built a lot of connections whom he has likely groomed. And he has 34 realtors on his own team — a telling sign of a BIG Kahuna.
In Vancouver, Merrily Hackett is the BIG Kahuna in a market with plenty of top earning real estate agents. Every community has its top dog. The huge opportunity for you is that you could be the BIG Kahuna of your market. All you have to do now is dominate the digital marketing space!!
And a lot of what is digital marketing today is barely understandable as marketing anymore. It’s social word of mouth, being found, being helpful, and building personal connections, and supporting important causes. In the realm of high priced real estate, Adwords, Facebook, and Linkedin Ads are used more to dry up opportunities for competitors.
As an agent you need to be thinking about how you can leverage digital marketing to extend your personal reach and strengthen your personal connections. It’s the perfect high definition medium to marry your beliefs to your prospects and clients. It’s all about shaping belief.
I attended a seminar in Markham, Ontario last Monday evening. It was hosted by Julie Flippin of Small Business Savvy. She’s a sales coach who helps small business people discover what is holding them back from achieving success and get on with building a successful business.
It was fascinating to hear her talk about how we all need to fight our demons and become successful by taking action.
Are You Getting at it?
What Julie does is find out why you’re not succeeding. She asks you questions about how you spend your time, who you spend time with, how you victimize yourself, how to rewrite your life story and self-understanding, and what to do about the people who are not enriching your life and career.
All excellent topics to explore, because the reason we’re failing is all around us and inside us. If you’re going to reno a house, you have take out all that nasty stuff and throw it in the trashbin.
But what if you just take a chance and forget all that psychology and rewriting your life stuff? What if instead, you just get at it without thinking? What if you trust your heart about the grand results, lifestyle, and freedom you are capable of creating? What if you disregarded fear and took a chance?
Getting Past Failure by Associating with the Right People
If you’ve been with the wrong people, as we all have, you know how they can sap your strength and diminish your confidence. I want to remind you that success changes everything. Your confidence rises as you build success, and as you get feedback from great people. If they don’t support you, they are toxic. Finding good associates or others who support your goals and who appreciate what you offer them is vital. Brains, expertise, technique, and hard work will only get you so far.
Let Others Help You Improve
Sometimes attending a big event gives you the sense of camaraderie of being with people in your profession. You gather energy, ideas, enthusiasm, and your mind and heart begin to soar. I’ve attended big conventions in Boston, San Diego, Dallas, and Toronto and you do get a bit of euphoria going for you afterward. These are those moments where you can launch yourself to your full potential.
Brian Buffini is hosting a real estate convention in Toronto on Dec 3rd. It’s $95 and a good way to hear some articulate real estate pros give you motivation, direction, process, and tips on improving your realtor marketing results. There are plenty of speakers covering everything from social media to confidence building. Let me know if you’re going.
Of course, if you already know you need to do digital marketing to build your business, then you could just get at it! You have the answer — go with your heart and your head will thank you.
Brian Buffini emphasizes a knowledge of money (or do you just need to value money more?)
If Someone Else Did it, You Can Do it – Become a Millionaire in Real Estate
If you’re a 21 to 36 year old realtor, you’re very smart. Most agents are approaching retirement and they’re going to leave the whole housing market to you. That’s brilliant positioning. But how’s your business development going? Are you ready to take charge and become a millionaire real estate agent?
Is there an easy way?
Everyone reaches a point in their career when they need to let go of their “shtick” and adopt a new approach — changes that will position you to go to the top. And yes, even 25 year olds have a Shtick.
Remove the Small Mindedness
Open your mind because here’s how you’re going improve your career outcome. If you view yourself as an entrepreneur, investor, thought leader, and mover and shaker, you’ll get things moving. The real value is what spins off this train you’ll get rolling. Your original idea may not work, but once in motion, the very best opportunities appear.
vastly improve your leads by leveraging digital media
improve your lead quality by attracting the best qualified prospects
explode your reach to tens of thousands of people
be present everywhere so you’re easy to find
increase variety of investors and buyers
open your presence in home services, mortgage, travel and other industries to access new types of business that you can refer to others
better capacity to capture and close any deal that comes along
exposure to multi-millionaire investors
more visibility as a credible expert
more time to focus on critical areas of your business
hiring agents to start your own office
help your new agents expand their networks
leverage their networks for results at scale
Sometimes We Have to Reinvent Ourselves
Merrily Hackett, a Vancouver real estate agent, was in danger of bankruptcy and seemingly going nowhere. But necessity made her more creative. She improved what she was weak in. Her company is now the biggest real estate agency in Canada with 25 offices and earning billions in sales.
Sales brought that (competitive spirit) out in me. I strive for excellence. I’m driven. When people say that I can’t do it, that tends to motivate me even more. — Merrily Hackett, Sutton Realty.
Millionaire agents build their success through prospecting, constant prospecting. They sleep, but they never stop. Their marketing machine works round the clock. This marketing persistence is only one of the keys. You’re about to go to more parties, if you leverage digital to get invited in on all the sweet deals.
Feed Your Drive
If you become content with a sale every few months, you lose that driven spirit to build your presence and huge volumes of leads for yourself. Competition is intense now.
With thousands of realtors now, you may fail, if you don’t outcompete them with a smarter digital marketing strategy. Real estate marketing is reasonably challenging, but top realtors such as Merrily Hackett master it by leveraging technology, experts, and other real estate agents.
Now, it’s all about 2016. It takes time to gear up. Time for you examine the top realtors and study what they do.
Some of what today’s top digital realtors do:
try something new even if they don’t know how to do it
build a lot of high quality, useful content
create new content that is optimized for Google rankings
have an attractive website with full MLS listings
have an effective, friendly brand image
promote and advertise extensively – including in person events
be customer focused – showing you are truly working for them
be likable – project an image of helpfulness and positive spirit
be authentic and honest – build transparency
be trustworthy – show you believe what they believe
use determination – a calm, confident, no quit attitude
create a positive, engaged presence on Facebook and Twitter
use an omnichannel strategy that focuses all effort and resources
communicate a clear, significant, personalized, unique value proposition
use a drip email campaign that adds value
follow up on leads in a helpful, information seeking and engaging style
With these in mind, here’s a winning Realtor’s plan of Action:
Target Persona: Build the best view of your target persona — you must know your target audience well. If you’re a North or West Vancouver, West Bay, Sandy Cove, Kerrisdale, or Shaunessy area realtor for instance, your ripest target is upscale, perhaps Asian, an investor, between 30 and 50. Your time should be spent studying your prospect’s lifestyle, beliefs, values, attitudes, personal expectations and what they don’t know.
The Real Goal: How will you attach yourself to their dreams? How will you establish yourself as an important, helpful person in their lives? How will you get them to let go of their “preferences” and hire you?
Relevant, Personalized and Persuasive Content: Before you can go big with advertising, you need highly relevant content – your content confirms to them that you believe what they believe. It also shows your expertise and commitment to hard work. Keep in mind that to them, you are your content.
MLS Property Listings – your MLS listings fed through your MLS associations listing feed is published into pages that your SEO guy can optimize. One top realtor has 8 million pages indexed in Google from his site. That creates a lot of visitors and they like looking at homes.
Big Promotion. Don’t spend your money until you have your content in place and you’re ready to engage them strategically via social media. And when everything’s ready, don’t get cheap with your ad budget – do Facebook, AdWords advertising, and local print news flyer sheets too. Top realtors have ad budgets well above $100k per year. Advertising works.
Powerful CRM and Lead Management Software
If you can’t afford a real estate webmasters account, there are other CRM tools you can use to help you engage your contacts and build your database of customer prospects. And, of course, you’ll have more time to personally engage with your prospects and customers, rather than struggling with digital marketing tasks.
It’s a perfect storm of economic, legal, and tax conditions that’s giving the real estate market a reputation of a place to score ultimate, once in a lifetime riches. And many are clamoring in to capitalize. Investors, home sellers, and agents alike are jumping on their chance to make more money.
And shadow flipping is the hottest tactic going in Vancouver and Toronto. Whether the practice is good or bad really depends on your attitude toward capitalism and ethics.
Shadow-Flipping is a legal tactic to sell properties fast and make a quick profit. It’s officially known as a contract assignment.
It happens this way: A home owner has made an offer of sale to buyer, and before the deal closes there’s a time period where the owner can sell it to someone else. This time period is called contract assignment. What could be wrong with that? Well, some might say it’s not ethical behavior. Yet it’s legal and nothing new really.
In the mid-2000s, during a condo boom, such assignments were so common that some developers put in clauses to forbid them. “The market was in a similar state to what it is now,” Darcy McLeod, president of the Real Estate Board of Greater Vancouver, said in an interview. “It was escalating quickly, and at that time, there were a lot of condos available and a lot of speculative investors were jumping in and buying condos that were expected to be completed one or two years in the future, and speculating that they could probably … sell the contract prior to completion for a profit.” from the Globe and Mail
Quick Flips involving your Real Estate Agent
The agent of the home seller can actually do a shadow flip. They can work with another buyer to purchase the property and then sell it to someone else for a much higher price. They can flip it multiple times in this way, thus increasing the home’s price.
Under real estate association rules of ethics, the realtor is supposed to be acting only in the home seller’s interest. In fact, they could be doing it all for their profit motive. In the case of a quick flip, the owner selling the property doesn’t get a cut of the ensuing profits from the flipping activity which some pundits believe they have a right too.
It comes out appearing as though the agent may be scamming their client by recommending they sell at a lower price, all the while knowing someone else they know is going to buy it for a lot more. Should the original owner get a cut of any ensuing profit? Should the terms of the contract assignment be nullified so that owners can’t sell the property while they’re waiting for another offer to close?
What’s odd about this is the owner is already agreeing with an offer, and instead is going to cut out on them and sell it to someone else. So contract assignment may encourage unethical sales activity.
So while the contract assignment is supposed to facilitate unethical behavior by the seller, it wasn’t really intended as an opportunity for the agents to make money on the side, or other parties. The fact agents are making more money may irk the public. It seems agents don’t a lot to upgrade their professional image as a group and the public is all too happy to jump on them.
If an assignment sale happens before the official sale closes, then no land transfer tax is owing. In Toronto, the land transfer tax is outrageous so you wouldn’t want to pay that. It’s a neat loophole allowing real estate speculation somewhat tax-free. It seems excessive taxation may increase the use of shadow flipping.
Some are suggesting Shadow Flipping or Consignment Sales is fueling higher real estate prices, however the practice is still minimal and couldn’t possibly be doing that. It’s likely part of the hysteria around Vancouver and Toronto about high real estate prices and the desperation to control them.
Government Greed and Meddling
Shadow Flipping is an embarrassment to governments because it reveals how ridiculously over-legislated and regulated real estate is. And they’re frustrated when can’t get the taxes. Some rumours suggest they’re out to change tax laws. Eventually, eyes come back to organizations like the Ontario Municipal Board who are desperately trying to keep everyone within the GTA region. There’s thousands of square miles of scrubland just north, west and east of Toronto that could take up the excessive demand for homes. Less demand in Toronto means less pressure to gobble up the limited parkland in the GTA. Problem solved. With new land freed up for development, current resale and new home prices would fall in Vancouver and Toronto.
“Vancouver’s geography is well documented, but in Toronto, development restrictions contributed to 2015 seeing the lowest annual number of detached home completions in 37 years (and that’s not a population-adjusted number),” said BMO Nesbitt Burns senior economist Robert Kavcic.
And while governments have no problem pulling in immigrants from all over the world, it seems it just adds fuel to the fire. What the real estate industry needs is for governments to take their hands out of everyone’s pockets and stop telling us what to do.
If the owner of a property doesn’t like the offer they’ve been given, then they shouldn’t accept. Or the seller should delete the consignment clause, with the agent to specify they will not be involved in any quick flip arrangement. The realtor association could abolish the consignment phase and demand that deals be closed very quickly, let’s say within 7 days.
However, what isn’t solved is government meddling in business. The reason prices are so high in the GTA is because there are no properties available. Governments with their Places to Grow Act, and The Green Belt Act along with the OMB have stopped development and reduced supply to fill the market.
In Vancouver, land is in extremely limited supply, and on top of that land use is restricted. So again, it’s governments who are the cause of home shortage. And home shortage equates to higher prices with people desperately bidding for a place to live.