Archives for August 2011

How to find people that need your help on Facebook!

Love this trick for finding people on Facebook who need your help…

 

The next generation of real estate agent teams Meet boomer, Gen X, Gen Y consumers on their on terms

By Bernice Ross
Inman News™

The median age of first-time buyers is approximately 31 years of age. According to NAR, the median age of REALTORS® is 56. The issue for the real estate industry is: Will these two groups be able to bridge the gap and work together?

Intergenerational challenges

Until recently, the “I am the real estate expert” model dominated the industry. Before the advent of IDX (Internet Data Exchange) and third-party vendors that publish listings data, consumers had to rely on agents to access what was on the market.

Not only were the agents the experts in terms of what was on the market, they also controlled access to it.

This situation gave rise to the “expert model” in real estate. This is a perfect fit for people born before 1965 (boomers and traditionalists), who value expertise. As a result, real estate professionals have often marketed themselves as “Your local real estate expert.”

While this approach still has value for older clients, “expertise” may be less prized among Gen X and Gen Y. Gen Xers may prefer to do their own research and make up their minds independently, for example, while members of Gen Y may decide by surveying their friends. (Of course, these are general trends and there are always exceptions.)

The disconnect occurs when older agents work with younger clients. For example, it’s common for older agents to point out how well they know the market, their experience in maneuvering through the red tape of closing a transaction, and that the price they recommend is the right price if the client wants to close the deal.

This approach turns off younger clients. In fact, many younger clients are put off by what they perceive to be parenting behavior.

Older agents are often focused on building a relationship with their clients. As a rule of thumb, most Gen X members prefer to keep their own counsel. They’re interested in information that will help them to make better decisions — not in having a business friendship.

Gen Y also wants information. However, they don’t want it from an expert. Instead, they value peer-to-peer feedback. Consequently, the agent must approach the Gen Y client as the agent would approach a friend with whom they are on equal terms — not as an expert to a beginner.

If you can contribute to Gen Y’s peer group, you may be invited in as a valued resource. Again, you’re not likely to be invited as the “expert,” but rather as a friend who sells real estate.

Innovate or slowly fade away

The challenge is that if you don’t innovate now to meet the needs of the next generation of real estate consumers, your business will slowly dwindle to nothing.

Jimmy Macklin, the Gen Y founder of Tech Support Group for Real Estate Agents page on Facebook, described it this way: “I’ve always felt that our only true competitive advantage is our ability to innovate. Nostalgia is poisonous and it’s boring.”

Describing today’s top producers who have failed to step up and become involved with the social media, Art Aviles, a real estate broker/owner at ANA Realty, summed it up like this: “The top 10 percent of yesterday, and today, might very well not be the top 10 percent in the near future. Why?

“Generation X, Y, and watch out for Z! We are social media junkies and will not fly with you if you are not tech savvy. Remember that they are some of the present clientele, yet most definitely all of future business. One last thing: Social media and real estate tech is still a baby (who) just recently learned to walk and passed its “terrible twos.” Wait until it’s in puberty! Bye-bye if you didn’t innovate by then.”

Bridge the Gap

For older agents, just learning all the new social media terms can be daunting. On the other hand, doing face-to-face listing presentations, handling confrontational negotiations, and mastering the basic real estate fundamentals can be equally daunting for younger agents.

As one astute member of Gen Y put it, “The Gen Y (members) have the pipeline, but they don’t have the skills. The boomers have the skills, but many of them no longer have the pipeline.”

The solution to this challenge is a new type of team that pairs a member of Gen Y (born 1977-94) with a boomer (born 1946-1964).

While a common scenario is a parent joining with a son and/or daughter as the heir apparent to the business, an increasing number of REALTORS® are finding that partnering with someone who is 25 or younger than they are is smart business.

If you’re feeling puzzled about how to best work with clients who are 25 years or more apart from you, why not try partnering with a member of the other generation and share the best practices that each of you bring to the table?

That’s a win-win for you, the other agent, and for the consumers you serve.

2 ways real estate agents can save on driving expenses

Most real estate agents and brokers spend a good deal of time behind the wheel of their car. Indeed, it’s not uncommon for real estate agents to drive more than 20,000 miles per year for business.

Fortunately, local transportation costs are deductible as business operating expenses if they are ordinary and necessary for your real estate business. Obviously, such expenses are ordinary and necessary for real estate agents and brokers who usually do most of their work away from their office.

It makes no difference what type of transportation you use to make the local trips — car, SUV, limousine, motorcycle, taxi — or whether the vehicle you use is owned or leased.

If you drive a car, SUV or van for business (as most real estate agents do), you have two options for deducting your vehicle expenses:

You can use the standard mileage rate; or
You can deduct your actual expenses for gas, depreciation and other driving costs.

Most people use the standard mileage rate because it is simpler and requires less recordkeeping: You need only to keep track of how many business miles you drive, not the actual expenses for your car, such as the amount you pay for gas.

If you use the standard mileage rate, there is good news: Due to the rising cost of gas, the Internal Revenue Service has increased the mileage rate for the second half of 2011.

How the standard mileage rate works

Under the standard mileage rate, you deduct a specified number of cents for every business mile you drive. The IRS sets the standard mileage rate each year. Ordinarily, there is a single standard mileage rate for the entire year. However, there are now two rates for 2011:

51 cents per mile for all business driving during Jan. 1, 2011, through June 30, 2011; and
51.5 cents per mile for driving during July 1, 2011, through Dec. 31, 2011.

To figure out your deduction, simply multiply your business miles by the applicable standard mileage rate.

Example: Ed drove his car 10,000 miles for his real estate business during the first half of the year, and 10,000 miles during the second half. To determine his car expense deduction, he simply multiplies his business mileage by the applicable standard mileage rate. His deduction for the first half of 2011 is $5100 (51 cents multiplied by 10,000 miles equals $5100). His deduction for the second half of the year is $5450 (54.5 cents multiplied by 10,000 equals $5450).

If you choose the standard mileage rate, you cannot deduct actual car operating expenses, such as maintenance and repairs, gasoline and its taxes, oil, insurance, and vehicle registration fees.

All of those items are factored into the rate set by the IRS. And you can’t deduct the cost of the car through depreciation or Section 179 expensing because the car’s depreciation is also factored into the standard mileage rate (as are lease payments for a leased car).

The only expenses you can deduct (because these costs aren’t included in the standard mileage rate) are:

Interest on a car loan;
Parking fees and tolls for business trips (but you can’t deduct parking ticket fines or the cost of parking your car at your place of work); and
Personal property tax that you paid when you bought the vehicle, based on its value. This is often included as part of your auto registration fee.

You must use the standard mileage rate in the first year you use a car for business or you are forever foreclosed from using that method for that car. If you use the standard mileage rate the first year, you can switch to the actual expense method in a later year, and then switch back and forth between the two methods after that, provided the requirements listed below are met.

For this reason, if you’re not sure which method you want to use, it’s a good idea to use the standard mileage rate the first year you use the car for business. This leaves all your options open for later years.

However, this rule does not apply to leased cars. If you lease your car, you must use the standard mileage rate for the entire lease period if you use it in the first year.
By Stephen Fishman
Inman News™