March 21, 2019

The Biggest Challenges Facing Real Estate Professionals

From fluctuating markets and interest rates to the rise of AI technology, the challenges facing real estate professionals require some strategic planning.

The Biggest Challenges Facing Real Estate Professionals

Real estate professionals are facing a lot of challenges. While some of them (like excessive taxidermy) may seem pretty straightforward, others are a lot more complex to navigate. From fluctuating markets and interest rates to the rise of AI technology, these challenges require some strategic planning. But with a better understanding of these challenges, real estate professionals can actually find ways to turn these challenges to their advantage.

Clients with Unrealistic Expectations

When someone wants to sell their house, they often already have an idea of what they think it's worth. When your thorough market analysis shows that it’s worth less than they expected, suddenly, they become a professional appraiser. “Did you take into consideration the finished basement?” “How about the custom shelving?” “Did you know our master bath has two toilets?” Homeowners don’t always understand what makes a home valuable to buyers; they focus on what makes the home valuable to them. And they often can’t see that something they love and find valuable could actually be a liability when selling a house.

But home value isn’t the only unreasonable expectation clients may have. Sellers may have unreasonable expectations for how quickly their home will sell, how much they may have to spend on repairs, or closing costs. Buyers may not understand how long it could take to find a new home, or what homes are within their budget.

So, how can you handle this challenge? If a client will not budge on a list price that is way too high, many realtors recommend turning down the listing. But, before it gets to that point, rely on your expertise and experience in dealing with all different types of people to help them understand the realities of buying and selling real estate. Dealing with different kinds of people and guiding them through a complicated and sometimes frustrating process is what real estate professionals do every day. You can even use this as an opportunity to showcase your expertise and gain their trust.

Market Volatility

Housing markets can fluctuate dramatically, and that can make things complicated for real estate professionals. Not only do home prices fluctuate, but interest rates for mortgage loans do as well. The ever-changing market can scare off people who might otherwise consider moving. A seller might be waiting to see if the market improves; a buyer might think that prices will have to go down eventually.

As real estate agents know, both rising and falling home prices have their benefits. With increased prices come increased value for sellers and increased commissions. With lower prices, buyers can get more house for their money, and home ownership becomes a real possibility for people who couldn’t afford it in a more expensive market.

Keeping an eye on trends in housing markets in your area can help you guide your clients through this obstacle. If a certain neighborhood has just started a price upswing, you can direct buyers who want to be in a trendy or up-and-coming neighborhood to buy there now before it is out of their price range. Whereas if prices are cooling in an area with beautiful homes that simply isn’t as trendy, you can help buyers get more house for their money, if they are willing to forgo the hottest neighborhoods.

It is worth noting that experts expect the nationwide housing market to calm down and stabilize in 2019. But your area might not. And while the nationwide market can impact your local market, being very familiar with your own market, and able to guide customers through it, is the best way to deal with volatility.

AI and Technology

The robots are coming for your jobs! Or are they? There is no denying that technology is on the rise, and artificial intelligence tools are now doing tasks that used to be done by humans. And that’s true in real estate just as it is in other industries. Some of the AI tools in real estate include task management tools, photo organization tools, and chatbots that gather initial information on leads. It is easy to understand why real estate professionals might be a little nervous about what their role will be as technology improves.

But, the reality is that many of these AI tools are here to help you do your job better, not replace you. AI tools can improve professional relationships, help you manage your workload, and even increase authenticity. But you do need to learn how to use these tools to your advantage. You shouldn’t be concerned about the robots coming for your job. But you might want to worry about the agents who are leveraging these tools to provide better service.

The good news is that you can leverage these tools as well. For example, using a service like EvaBot to send gifts to your clients saves you time (and money), and helps you maintain your client relationships, which should be a top priority. This way, you can spend more time doing the aspects of your job that require your expertise, like supporting your clients through the process of buying or selling real estate.

Maintaining a Social Media Presence

With the rise of technology, came the rise of online marketing and social media. If you started out as a realtor before social media existed, you might be a little intimidated by using these tools. But creating a social media and online presence is crucial. Finding an agent on the internet is the third most common way people find a realtor, after a referral from a family member or friend, and being a previous customer.

But tackling social media doesn't have to be overwhelming. If you're not sure where to start, you can always hire a social media specialist to help you establish yourself and gain followers. If you don’t have the budget for that, or if you want to retain more control, you can batch your social media posts, by using a social media scheduler like Sprout or Buffer. This allows you to knock out your social media posts for the day, or even the week, in one go. The important part of a social media strategy is to provide social media content that your customers and clients will find valuable.

Bottom Line

The challenges real estate professionals are facing are not insurmountable. Don't be intimidated by these challenges; learn how to use them to your advantage.