Real estate agents in markets with international buyers benefit from an Internet marketing presence. A real estate website is your interactive marketing arm that is immune to time zones and available any where in the world that has the Internet. With the dollar falling in value against foreign currencies coupled with the residential real estate market in a slowdown with prices falling in at least 77 of the major metropolitan areas, American real estate has become the international bargain.
Hawaii continues to attract international buyers, especially from around the Ring of Fire. According to the NAR, 47% of foreign buyers bought their US property for vacation purposes. This may account for the fact that condominiums and apartments are twice as popular with international buyers as American buyers.
If buying follows the 2006 trends, real estate agents can expect over 50% of the foreign real estate investments to be in the Florida (26%), California (16%) and Texas (10%) markets. Positioning your real estate website for your market’s international clientÃƒÂ¨le is an important part of your marketing strategy. With 13% of the buyers coming from Mexico, with an additional 3% from the rest of Latin America, bilingual websites in these markets are positioned to capture the Latin American buyers. Certain real estate websites have also added web pages translated into European and Asian-Pacific languages to attract and educate the international buyers. Europe, at 33%, was the largest foreign buyer in the US market.
The National Association of Realtors in its October 2007 The Global Neighborhood Report noted “The Internet has also provided a vital conduit to potential buyers around the globe, making property details and related market information one click away for anyone with interest and an Internet connection. And if softer housing prices have tempered some U.S. homebuyersÃ¢â‚¬Å¡ enthusiasm to move forward with a transaction, quite the opposite could be said for many foreign buyers, who are witnessing even better deals when weak-dollar prices are converted into their currency equivalents. For example, the British Pound Sterling, worth $1.44 in 2001 rose to nearly $2.00 in mid-2007, allowing a U.K investor to buy considerably ‘more house,’ simply through favorable exchange rates.”
Real estate websites positioned for the European and Caribbean markets have begun including a translation glossary of American to British words. For instance in the UK, a “closing” is a “completion” and a “condominium” is a “flat”. It is a simple addition to a website and follows the sales principle of not having your customer leave your website to get service you can easily provide.
Knowing the attraction your real estate market has for the international buyers and investors, helps you create the web pages and add the web tools that foreign buyers are looking for. Working with a real estate web designer will aid you in making sure your content and page set-up are optimized for the search engines so your potential international clients can find you in their Internet searches.
In a softening commercial real estate market, an opportunity exists for investors interested in building or retrofitting commercial property to energy efficient standards. Where opportunity exists for investors, it also exists for real estate agents specializing in the commercial real estate market.
The Wall Street Journal reported in September 2007 that “Overall, the number of U.S. buildings certified under the U.S. Green Building Council’s elite Leadership in Energy and Environmental Design (LEED) standard stands at 6,000 and is forecast to top 100,000 over the next four years.” Besides energy efficiency, large corporations are also including sustainability factors in their commercial property retrofitting, such as using recycled materials.
Citigroup Inc., which has 92 million square feet in its real estate portfolio, is in the process of going green with its commercial real estate. Citigroup had energy audits conducted on its property and has adopted various power-saving measures. Also in the works is the redesign of Citigroup’s bank branches to allow in more daylight and use more recycled materials. Kaiser Permanente, twenty seven new and existing hospitals in its real estate inventory is also embarking on a plan to green their buildings.
Howard Liggett, President of Distressed Real Estate Consulting Services, recently wrote “The [LEED] designations are conferred by the US Green Building Council and the labeling of a commercial office or professional building as LEED certified has created a new value-added marketability for the leasing agent. Simply put, LEED certified buildings are attracting greater numbers of tenants.” Part of the draw of LEED buildings is the greater amount of natural lighting and better air quality.
The Urban Land Institute foresees that the “income-generating industrial and apartment sectors remain favored investment categories.” Part of the market push behind the apartment sectors is that experts figure demand for rental housing will go up due to the tightening residential mortgage market.
By marketing to the commercial real estate trends on their real estate website, Realtors who specialize in the commercial markets can increase their presence on the search engines. Buying and leasing trends translate into the specific keywords which buyers and investors are using to find commercial property. Web pages and blog entries covering the market trends in buying and leasing of commercial property in your area boost your real estate website’s visibility. Position part of your website’s marketing to capture the greening of commercial real estate.
A home buyer’s mortgage can benefit from buying real estate with plans to improve the its energy efficiency. Traditional frame homes built prior to the 1970s were not built with energy efficiency of today’s houses. Houses built in the days of low heating costs may have little to no wall and ceiling insulation and heat transferring wooden exterior doors. This leaves a large market of houses that can qualify for a Energy Efficient Mortgage (EEM).
The Federal Housing Administration (FHA), a federal agency which insures private loans, backs EEMs that allow mortgage lenders to add 100 percent of the additional cost-effective energy efficiency improvement costs to an approved home mortgage loan. The FHA limits are a cap of $4000 on homes under $80,000 or 5 percent on homes over $80,000 with a cap of $8000.
Fannie Mae also offers an EEM. Fannie Mae, a federal government chartered company, works “to reduce mortgage interest rates for consumers, expand homeownership and affordable rental housing, and improve the liquidity of the mortgage market for investors and consumers.” Fannie Mae has a loan that offers to finance not just home ownership, but also the energy efficient improvements home buyers want to make. Fannie Mae’s HomeStyle Renovation Mortgage is a cost-effective way to combine a client’s home purchase or refinance with the home renovation costs in one loan with only one closing.
Real estate agents selling homes in housing markets such as Colorado Springs, Colorado, San Diego, or Pensacola Florida with a large military presence should be aware of the Veteran Administration’s (VA) EEM. The VA mortgage is available to qualified active and retired military personnel, reservists and veterans for energy efficiency home improvements when buying their home. The VA caps the energy improvements between $3,000 and $6,000.
The key to getting the EEM loan is getting the house energy audited. Most certifying companies are certified in the Mortgage Industry National Home Energy Rating Standards that sets the national procedures for home energy ratings. Make sure they are also a professional accepted by the secondary mortgage company, such as Fannie Mae, that the mortgage company is using.
The audit creates a report with a list of home improvements necessary to bring your house to the level of energy efficiency necessary. Usual recommendations are improved insulation, tighter and better insulated windows, and better sealing on ductwork and weather stripping. If the hot water or air conditioning system is aged, it may also be on the list of items to be replaced.
Awareness of EEMs helps the real estate professional creatively approach “fixer upper” homes and may help the first time home buyer afford a house more in the size they need. The EPA and Residential Energy Services Network (RESNET) have websites with information on the certification standards and energy efficient home repairs for researching articles to provide information on your real estate website.
The age of environmentally friendly homes is the growing real estate market on the horizon. Arizona, California, Oregon and Washington are a decade into the green trend of minimizing or eliminating a house’s negative ecological footprint. Driving the trend is not just a desire to clean up the planet; home heating costs consume over 30% of America’s energy! With California dealing with summer energy shortfalls due to increased air conditioning loads, housing construction techniques in the California real estate market have more than just a “save the trees” feeling driving the market. When the Pentagon spends $1.5 billion to environmental and energy efficiency renovation, you know a trend is well into its maturing phase.
In an effort to further prod the energy efficient house market, Congress passed the 2005 Energy Policy Act. providing for a tax credit for building energy efficient homes to building contractors.
Components that create energy-efficient environmentally-friendly houses are wide ranging – from construction techniques, water usage, to the house’s power source. States, such as Florida with its Green Home Program, have green home certification programs that allow home sellers to list a third party verification of their green home. Interestingly, in 2006, over 60,000 Energy Star-rated houses were added to the Texas real estate market with many of them costing the same as less energy efficient homes in their same markets.
Green home construction techniques are noted for walls and roofs with high insulation factors, recycled building materials, low power lighting, insulated windows and doors, solar exposure positioning, toxin reducing low VOC (Volatile Organic Compounds) paints and formaldehyde-free carpet and plywood. At comparable pricing, green homes are a natural fit for first time home buyers who are looking for the most house for their mortgage payments. With lower energy costs, the first time home buyer, usually on a tight budget, can stretch the income farther with a green house.
The effect of the greening effort has caused construction changes, even with companies that do not see themselves as green home builders. With the rise in LP and electricity costs, traditionally constructed homes have begun to use 2 x 6 external wall framing versus the 2 x 4 framing. The additional two inches of insulation translate into year-round energy savings. With the building techniques able to construct air tight houses, builders are taking care that the air/moisture barrier and insulation layers are done correctly so that mold problems are not created by moisture trapped in the walls.
Between energy costs rising and Hollywood celebrities keeping the climate change problems in the news, more buyers are paying attention to the EPA’s Energy Star program. Whether it is regarding an appliance or an entire house, the real estate market is getting greener. Make sure you include information on your local green market on your real estate website!
On the other hand, this means established real estate agents as well as new agents both must overcome “change of brands” barrier to gain new business in 40% of the market. Advertisers are aware, that regardless of what market – real estate, soap, or cars, people build a brand allegiance. What advertising ingredients does your real estate website need to help you break through that barrier?
You know that your website must capture attention and offer real estate information that is of real value to buyers and sellers in a very competitive market. What elements of advertising can move someone to try your services over the company that their family has always used? When someone is emotionally attached to a brand, that brand has become a part of their identity. Your call to action needs a strong message that allows someone to shift a part of their identity. The message on your real estate website must “rings true” for them.
Your real estate website’s call to action needs to go beyond curiosity arousing headlines. It must offer a high risk/reward scenario – remember they will be moving out of their comfort zone – balanced with a safety net.
Your agent bio has to present your personal unique selling point (USP). Make it something that is worth taking the risk of forming a new professional relationship. As one salesman put it, “To sell a $450,000 house, you need to have a $450,000 relationship.” National Association of Realtors surveys have shown that integrity and trustworthiness are the top two traits looked for in real estate agents. Whether through testimonials or stories, convey your integrity and trustworthiness as a foundational strength, but also an USP that goes beyond that.
Advertising tests have found that people love to read about themselves or information directed to them personally. Real estate websites regularly convey that the agent listens to clients. Instead of making that claim, tell a story of how you helped someone buy a house that was perfect because your listened and found how they wanted to feel once they were in their new house. Your real estate website positioning may carry the message that you “put them in a house with room to grow and a yard to start a garden” versus just “put them in a 1800 square foot house with a yard.” By having website content showing how you heard a home buyer’s emotional need or dream, you better convey your ability to listen.
People buy on emotion and find reasons later to back up their decisions. The best way to convert visitors to new customers and overcome the “change of brands” barrier is to show you understand their needs and problems better than anyone else. Maybe use the headline “I will put you into the house your mother never dreamed you wanted.” A subheading of “It was over 100 miles away” may not turn a clients mother into a referral though.
The real estate market slowdown has benefited internet marketing of properties at the expense of print ads. According to ChicagoBusiness.com, the major newspapers are seeing a cyclical downturn in print ads due to both the housing starts slowdown and the overall real estate market situation. The question looking to be answered by the markets in the next few years is once the market picks up; will real estate advertising be firmly shifted to the internet?
Real estate agents and advertisers alike see the internet growing as the most effective advertising media due to its interactive nature. With this growing dominance, marketers do not see that the revival of the real estate market will necessarily translate as a recovery of the print advertising market.
Pointing to the research showing over 75% of people entering the real estate market go online and do property searches, Jim Townsend, of the Classified Intelligence ad consultants company, thinks the greatest threats to newspapers are real estate websites with property listings. “A lot of the Realtors we talk to tell us the only reason they keep advertising is that their clients expect to see the ad in the paper.”
Other advertisers have found the best benefit of print ads is to drive business to their real estate websites.
In the broader market of real estate websites, in the last year, even with a downturn in the market, venture capitalists have recently invested $62 million into four websites: Trulia, Redfin, Zillow and Terabits.
Why is the real estate Internet trend running counter to the market downturn? Pete Flint, Trulia’s CEO, realizes that “There’s no doubt that a lot of brokers are feeling some pain right now. They’re spending less on advertising … but they’re spending a significantly larger portion online, because it’s cheaper, and it’s where the audience is.”
Zillow’s CFO, Spencer Rascoff notes of Zillow, “Our growth actually accelerated in the back half of the year. In a down market, buyers, sellers and agents need more tools.”
From the major real estate websites to the websites generated for individual real estate agents, the Internet is turning into the most viewed and cost effective advertising tool of the current real estate market. Given internet marketing’s success with real estate advertising, print advertising will have an uphill battle to recover its lost ground.
The real estate market has the Federal government trying to pass legislation helping mortgage lenders and home owners survive the sub-prime mortgage market correction on one hand. On the other hand the Department of Justice (DOJ) has launched investigations into the real estate brokerage industry.
Last Fall, the DOJ unveiled a new area on its Anti-Trust Division website aimed to educate real estate buyers and sellers to the DOJ’s view of the real estate brokerage situation. One area the DOJ took into account in their process is the Internet’s affect on buying and selling real estate.
The DOJ notes “the Internet helps consumers to educate themselves about other areas of home buying and selling. For example, consumers can use the Internet to research brokers, mortgage and lending options, and recent home sales and home valuations in their community. Consumers also can find information about schools, crime, and other variables related to home purchase decisions through a host of online sources, including websites hosted by their municipalities.”
One real estate broker commented at the DOJ public hearing that “Today’s sellers and buyers are more educated and more knowledgeable thanks almost entirely to the growth of the Internet.” Hopefully, your real estate website is one that is educating your market.
Like many real estate buyers, the DOJ also scanned the National Association of Realtors’ research on its website to find what real estate research people are doing on the Internet. “Features ranked as most useful among home buyers searching for a home on the Internet were photos (identified as very useful by 83 percent of home buyers), detailed property information (81 percent), and virtual tours (60 percent).”
When the Federal government realizes a trend in the real estate market, it must be a well set trend. Indeed real estate agents can review the DOJ’s April 2007 Competition In The Real Estate Brokerage Industry Report’s Section II on the Internet’s Affect On Real Estate Brokerage to see if their real estate website is offering many of the tools the DOJ has found helpful to real estate buyers and sellers.
The DOJ’s conclusion is that with greater education, broker’s fees should decrease, which, for some reason is what they are interested in seeing. A real estate agent’s conclusion from the same facts would be to make sure their real estate website is getting a good share of the potential clients’ growing use of the Internet to find agents, view property and get educated on the real estate process.