Best Kept Secrets That Real Estate Brokers Don’t Want You To Know
Since the pandemic, the real estate market in the US has been red hot due to the increased demand of relocation. Briefly, millions of Americans are seeking more spacious quarantine-friendly living space including college students moving out of dorms due to COVID-19 restrictions, working adults moving back home or suburban areas to work remotely, young families swapping larger houses in lower cost of living states or cities providing a more comfortable lifestyle during pandemic.
The hot market is also fuelled by the record-low mortgages rates — 2.73% Freddie Mac 30-year fixed rate in mid-February which is attractive to many first-time buyers. Redfin also showed that there is 25% year-over-year increase in single-family sales transactions and a near doubling in mortgage applications, simply put, 2021 is a crucially important year for real estate broker’s career in the US.
According to the 2021 State of the Real Estate Agent report by HomeASAP LLC, 58% of real estate brokers described themselves as optimistic about the housing market in 2021 after a surprisingly strong year in 2020. While the housing market has never been so heated up since 2005, the competition between the real estate agents has also turned white-hot. To separate yourself from your competitors, there are a few thing that you can do in order to close more deals in less time this year.
1. Brand Yourself
First impression matters: think of yourself as a brand, not just a person who sell houses, then you will understand the value of branding. The way you talk and carry yourself will determine if your potential clients find you trustworthy or not. Therefore, know your script and practise until you remember it by heart. Find a tone that you are comfortable with but it should also show that you are confident and genuine so that talking to you should be easy and stress-free.
Another personal touch is sending a personalized welcome gift to all your new clients. Given there are no limits to options to select from, being creative is a great differentiator. Whether a bottle of liquor or wine, online workout subscription or drive-in theatre tickets, just to name a few. It doesn’t have to be expensive, but a small token of appreciation will go a long way. Think of something that represent your brand and try to combine it with something else also something your client might would enjoy base on their hobbies or lifestyle. Keep your welcome gift options varied so there is always something suitable for the recipients. Know more about gift automation to save time:
2. Save income tax- gifting as donation*
Experienced real estate brokers recognise the perfect timing to send your clients ‘thank you” gifts is at this time of the year, just before the tax filing deadline (extended to May 17th this year). Depending on your state and local tax laws, you might be able to get a tax deduction* per gift (*please check with local IRS authorities to confirm).We understand that this amount might be small impractically small for business gift-giving but there are ways to get the most of it when you show your appreciation to your clients.
- Gifts with incidental costs. The incidental expenses such as gift wrapping, engraving, postage and insuring are not included in the $25 deduction limit, according to IRS. In other words, those costs are deductible and you can actually claim the incidental expenses on top of the $25 limit
- Gifting a couple — $25 tax deduction is for individuals but if you are business relationship with a couple (which is very common in the real estate market), you should gift both spouses, instead of one of them since the limit doubles to $50.
- Gifts to enterprises — If your clients are business owners, consider sending a gift to their company as the limit doesn’t apply to gifts for business entities as long as it is for your client’s company for business use. Let’s say you get a $250 home printer for their office, the cost of of the printer would be fully deductible.
Again, please check with local IRS authorities to confirm the gift tax deduction policies.
3. Create sense of urgency — good deals don’t wait
All real estate experts know that you can’t simply wait for the potential buyers to action, it is important to you motivate and educate them. Hence, creating a sense of urgency is an essential skill of a real estate agent.
When prospects are resistant to making a buying decision, sharing market data can assist with overcoming any hesitation. For example let’s say if they think the price will drop, give them figures of the local housing market to prove that it has bigger chance to go up so it’s smarter to catch the deal right now. For instance, 1) a 10.4% annualized increase in December was recorded by The S&P CoreLogic Case-Shiller US National Home Price Index or 2) Core Logic reported this past January, there was a 36% increase in San Francisco Bay Area in sales of single-family homes in eight Bay Area counties.
Furthermore, ackonwledge them that vacant apartments will be less as time goes on. According to Realtor.com’ report in March, the total number of active real estate listings in the U.S. dropped by -51% over the past year meaning the real estate market is more competitive for buyers this year.
Finally, the market is predicted to be even hotter in the rest of the year as more people will be vaccinated and the economy will be gradually recovering.
4. Sweeten the deal
When the clients are on decision-making stage, it is easy that the table turns around and you are the one who has the sense of urgency as you hope for closing the deal as soon as possible. However, no one likes to be hurried to make a big decision unless, there are something that they can hardly resist.
First of all, save them junk fees such as administrative fees, credit report fees, mortgage rate lock fee for them. These junk fees can cost them 3–6% of the sales price and offering to pay for these extra costs is an effective push to close the deal. Common mortgage junk fees:
- Underwriting fee
- Mortgage rate lock fee
- Processing fee
- Courier fee
- Application fee
- Credit report fee
- Administrative fee
- Miscellaneous fee
- Wire transfer fee
- Document preparation fee
- Commitment fee
- Email fees
- Origination and broker fee
Other than that, get them a better mortgage rate so that they won’t look anywhere else. Make it an option that your clients can get discount points (or mortgage points) in advance to secure a lower mortgage rate — one point equals to one percent of the loan amount and will reduce the interest rate by 12.5 -25% usually which will save them loads of money in long run so offer to purchase discount points on their behalf will make it easier for potential buyers to make the decision.
5. Thank your clients properly (and automatically)
After successfully closing the deal, it’s not the end of your relationships with your clients. In fact, it’s the start of potential long-term client relationships so don’t forget to show your gratitude after each deal. And there is nothing more a significant gesture than sending a personalised gift.
The “thank you” gift is different from the welcome gift. The welcome gift is definitely more casual and less specific, think of it as more a stocking filler. Meanwhile, the “thank you” gift is more considerate and customised. It is an advantage to send a tailored gift after the deal since you have spent time with your clients during the sales, you get to know more about their lifestyles and hobbies so that you are confident to get an on-point gift for the client.
As a gifting expert ourselves, we also highly recommend including a handwritten note along with the gift as well. You don’t have to pour your heart out on the message. Keep it simple and say that it is your pleasure to work with them and you hope that you will maintain a continuous relationship in the future. It is a small extra gesture but adds much more value to the gift.
If you ask different real estate brokers how much they spend on gifting on average, the answers would differ as it depends on how much they earn from the deal and how much they are willing to give back to their clients. Giftpack knows the hassle of arranging different gifts throughout the year, considering the budget and occasion for the gifts, also the preferences of the gift receivers are varied. That’s why we were eager to find a solution for the professional individuals and launched a brand new product for individuals — the gift automation service allows you to manage the client gifts all in one place, input your clients’ basic details, and preferences, set your budget and we will do the work for you including generated perfectly tailored gift options, send an email to your recipient for claiming one of the gifts, then purchase and deliver the gift.
On the dashboard, you can categorize the clients in groups, track the gift status, and launch a gifting campaign whenever you want. Client gifting is always efficient with Giftpack, Want to see it yourself? Get on the free trial today.
