RISMEDIA, June 16, 2009 Given the new Home Buyer’s Tax Credit and the abundance of low-priced inventory available, it is not surprising that first-time buyers account for more than 40% of all current transactions. But just who are these first-time buyers? What is the best way to cultivate their business? In this month’s NAR Power Broker Roundtable, we ask three industry veterans to share their experience and insight on this topic.
Moderator: Virginia Cook, Special Liaison for Large Firm Relations, NAR
Bill Raveis, Chairman, CEO, William Raveis Real Estate, Shelton, Connecticut
Ed Forman, Founder, Chairman, Watson Realty Corp., Jacksonville, Florida
Mary Frances Burleson, President, CEO, Ebby Halliday REALTORS®, Dallas, Texas
Virginia Cook: NAR statistics confirm existing home sales are continuing to rise in most areas of the country. Given the new Home Buyer’s Tax Credit and the abundance of low-priced inventory available, it is not surprising that first-time buyers account for more than 40% of all current transactions. This is one reasons NAR provides a variety of consumer focused publications REALTORS? can use to attract this growing sector of the market. With practical titles like, Why Rent When You Can Buy? and How to Use the First Time Buyer’s Tax Credit, they directly target the entry-level home buyer. To better understand the new first-time home buyers, we ask-what’s so different about these buyers?
Bill Raveis: Well, no doubt this recession has been a game-changer in the industry and today’s young buyers totally get it. They are much more savvy than the first-time buyers of even five years ago, who were only just beginning to look online for listings. Today’s young buyers are far more informed about mortgages, property values, short sales, market conditions, the whole nine yards-and the way to cultivate their business is through technology and social networking. You’ve got to give them everything they need the way they want to get it.
Ed Forman: Absolutely. The home-buyer tax credit is attracting young buyers in droves-especially young, single women. In our company, we have created a task force to look at what these buyers want, and we’ve developed some very effective first-time buyer seminars. But basically, this group lives by Facebook and LinkedIn. They are attached to their Blackberries, their i-Phones and their cell phones, and they’re checking listings on their PDAs. That’s where you’ve got to be if you want to reach out for their business. Those kinds of communication capabilities are what we look for when we recruit new agents, and that’s how we are retraining veteran agents whose more traditional business methods are suffering.
Mary Frances Burleson: I agree. We are fully involved in virtual tours and online open houses in Dallas-and one-stop shopping is more important than ever. You need to be able to provide for mortgage needs, insurance…the whole package, all under one roof. These young buyers don’t have the time or interest in doing things any other way.
BR: And once you reach them, whether via e-marketing or other means, you have to be super-responsive. Our call center gets over 8 million visitors a year, and you can bet our people are very proficient at what they do, not only greasing the wheels for first time buyers but up-selling those ancillary products.
EF: The good news is that it’s worth the effort to attract first-time buyers, because they are the ones who are fueling the industry. Let’s face it, there are great values out there, and recovery has to start from the bottom up. The seller of that $200,000 condo you just sold to an entry level buyer will likely move up to a $400,000 property.
VC: That’s true, but it sounds like the top of the market has a way to go before it recovers.
BR: No doubt. Our high end market is hurting-badly. On the other hand, there is plenty of low-priced inventory for those folks who are lining up to take advantage of the first time buyer’s credit. There is something else to consider, too. We are getting a lot of bright, young recruits these days from the fallout on Wall Street and the banks. And unlike past recessions, when we attracted good agents who left as the economy recovered, I think these people are in it for the long haul. They are the ones we will continue to need as technology marches on.
EF: True, although sometimes, even “low technology” can attract today’s first-time buyers. Our sales associates go to lunch most days wearing badges that say, “Ask me about the $8,000 tax credit.” You might be surprised at how many people are actually stopping to ask.
MFB: And that’s great, because some things never change. Good, professional agents are always key in this business. Regardless of technology, buying a home will always be an emotional decision. Rates and the tax credit may be driving the market, but even the most technically oriented buyer wants a human hand to hold through the process.
The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Virginia Cook, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.