Helpful COVID-19 Resources And Information For Land REALTORS®

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The National Association of REALTORS® and its NAR Commercial Affiliates, including RLI, have been compiling helpful information and resources for REALTORS®. This page features highlights of the various programs and resources available to real estate agents impacted by the COVID-19 outbreak. We will do our best to keep this page updated with any additional resources that may be of value to our members and the industry.

NAR Blog Post on COVID-19 Relief Package Passed December 2020

This blog post from December 21, 2020 provides an overview of what’s inside the year-end relief package passed by Congress, including impacts on the real estate industry at large. Read here.

RLI Voices Of Land Podcast Episodes Related to COVID-19 and The Land Market

The new ‘The Voices Of Land RLI Podcast’, presented by the LANDU Education Program, featuring Accredited Land Consultant (ALC) host Justin Osborn just released two episodes for land agents discussing the impacts of COVID-19 on land real estate markets. The Voices of Land RLI Podcast recently released two episodes on the topic, the first being with guest Russell Riggs, NAR Legislative Policy Liaison for RLI, discussing What Land Agents Need To Know About The COVID-19 Stimulus Package; and another with guest KC Conway, CCIM Chief Economist, on The Economic Impact of COVID-19 on the Land Market. Listen now.

Virtual Round Table: COVID-19 Impacts On The Land Market

The REALTORS® Land Institute 2020 Future Leaders Committee presents a panel of Accredited Land Consultant (ALC) land experts from across the country in various different land markets to shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends.

We’ve also captured the highlights from this recording for each land segment in a series of posts on the RLI Blog:

Webinar: COVID-19 Impacts On The Residential Land Market

The housing market entered 2020 with momentum as home-buyers were enthusiastic about low mortgage rates and the multifamily market continued its expansion. The sudden shock brought on by COVID-19 is impacting the housing market and wider economy as uncertainty and layoffs defer decision making.

This webinar will:

  • Help you build a playbook in real-time to navigate through today’s marketplace.
  • Give insights into the current outlook from home builders for land transactions.
  • Showcase on-the-ground experiences with pushing forward entitlements in today’s market.

Watch the recording to get pertinent information from Senior Managing Principal Tim Sullivan and Chief Economist Ali Wolf of Meyers Research in this RLI Hot Topic Webinar from Tuesday, April 28. Hear updates on this topic from our presenters during their company’s weekly webinars.

NAR’s ‘Right Tools, Right Now’ Program

NAR’s ‘Right Tools, Right Now‘ initiative makes numerous valuable resources available to the association’s 1.4 million members at reduced or no cost.

Members TeleHealth

Members TeleHealth, part of NAR’s ‘Right Tools, Right Now’ initiative, provides around-the-clock access to non-emergency healthcare from more than 2,300 board-certified U.S. physicians. Common issues addressed through telemedicine include allergies, asthma, rashes, joint aches, flu and nausea, among others. Beginning April 2, NAR is funding two months of services for members who currently lack access to telemedicine and enroll in this program by April 15. Recognizing that the opportunity will likely draw significant interest from its members, NAR has also negotiated a discounted rate for those who wish to retain coverage following the two month, no-cost period.

“As we continue to solicit input from our members regarding COVID-19’s impact on their lives and businesses, NAR is grateful to be able to offer expanded access to potentially lifesaving telemedicine services,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, CA. “Medical professionals are urging Americans who are sick to stay home, and telemedicine is playing a critical role protecting our communities and our health care workers. We continue to encourage members to limit their exposure and decrease the chance of spreading illnesses to others.” Learn more about this Members TeleHealth.

Coronavirus SBA CARES Act

NAR’s Federal Advocacy team has been working closely with Congress and the Administration to ensure the interests of REALTORS® and their clients are protected in any federal action in response to COVID-19. Many REALTORS® are small businesses, or work with them as clients. In the most recent relief package passed into law, the “Coronavirus Aid, Relief, and Economic Security Act” or CARES Act, there were significant provisions aimed at assisting small businesses during this difficult time. The CARES Act appropriates more than $360 billion total for new Small Business Administration (SBA) programs – the 7(a) Paycheck Protection Program loans and the Economic Injury Disaster Loans (EIDL) advance grants program. View FAQs and learn more from NAR.

Congress Clears Coronavirus Relief Bill

6/17/2020 The Small Business Administration and U.S. Treasury Department on Wednesday rolled out major updates to the Paycheck Protection Program, offering automatic forgiveness for certain independent contractors and creating a broader application form for forgiveness. Read more.

4/23/2020 The U.S. House passed legislation Thursday providing a fresh round of funding for coronavirus small-business relief programs championed by the National Association of REALTORS® and available to REALTORS® through the CARES Act. The Senate passed the bill on Tuesday.

President Trump is expected to sign the measure, which will clear the way for lending to resume as early as Friday under two Small Business Administration programs, the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) Program.

Under the agreement, the PPP will receive $310 billion in new cash, while the EIDL fund will receive an additional $60 billion. The bill sets aside $60 billion of the PPP funding for small and medium-sized community banks, which will provide extra help for self-employed individuals and small businesses that don’t have relationships with larger banks.

“The PPP and EIDL had tremendous demand. Although the rollout was rocky, this latest bill should provide enough funds for everyone who needs a loan to get it. REALTORS® still waiting should contact their lender again and keep trying,” says Shannon McGahn, senior vice president of advocacy for NAR. “We have a wealth of resources to help you through the process, including a new video just posted last night.”

The bill also includes $25 billion for coronavirus testing and $75 billion for hospitals.

Quick Guidance for REALTORS® on the PPP and EIDL From NAR

  • If you’ve already applied for an EIDL: The SBA is processing applications already in their system on a first-come, first-served basis. You do not need to reapply.
  • If you have not already applied for an EIDL: Check back at the SBA application page once the additional funding is signed into law.
  • If you’ve already applied for a PPP loan through an SBA lender but have not been approved yet: Check with your lender to see if they are maintaining a queue of applications during the lapse or if you will need to reapply when the renewed funding comes through.

If you have not applied yet for a PPP loan through an SBA lender: Have the application form filled out and your documentation ready to provide to your lender. (For businesses with employees, have payroll documentation; for independent contractors, have your 2019 Form 1040, Schedule C, and 1099-MISC.) If you have an existing relationship with an SBA lender, you should go to that lender first once the program reopens, but be prepared to try multiple lenders, which you can find on the SBA site.

Additional Resources

NAR Commercial: Webinar – Insights For Commercial Executives

his webinar from April 15, 2020, covers the latest news on legislation and SBA loan programs, key transactional guidance from NAR’s legal team, and insights from commercial real estate executives on their experiences working through today’s volatility and how they are helping clients navigate changing opportunities in the coming months. Watch recording.

COVID19 Webinar for Commercial Real Estate Agents

CCIM: Coronavirus (COVID-19) Resources and Guidance For Commercial Agents

CCIM Institute has prepared a resource page for commercial real estate professionals to provide additional professional guidance around Coronavirus (COVID-19). This page hosts information about FEMA extensions, Tax Extensions, and updates on other legislative advocacy issues.

SIOR: COVID-19 and CRE: What You Should Know

As CRE leaders around the globe, you are feeling the impact of COVID-19. SIOR has provided a collection of resources available to you to keep you up-to-date on latest news and industry impacts.

IREM: COVID-19 Resources and Information for Property Managers

If you are a property manager, this page from IREM is filled with resources for dealing with the impacts of COVID-19.

Diving into Water Rights: A Primer for Land Agents

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“Water is the ultimate zero-sum game; the volume of water used by one right holder sourced from our common pool of water ultimately diminishes, to some degree or other, the volume of water available to other water right holders.”

– Dr. Charles Porter, 2014

Nothing is more basic to successful human congregate settlement than the management and sharing of freshwater resources; the way in which Americans manage their freshwater resources defines the overall quality of life. Today’s REALTORS® must gain a working knowledge of water rights in their geographic area of practice.

Who Owns the Water?

The first question that arises – who owns water in the United States, the public or the individual citizen? The answer is an eternal favorite – it depends – on the geological container in which the water resides. Ownership of water varies from state to state but is always categorized in three geological containers in which water resides, surface water, diffused surface water, and groundwater.

Surface water is water that exists naturally in a river, creek, or stream. Most states own their surface water and describe it as water in a “watercourse” that is generally defined as:

…a channel, comprising well-defined bed and banks, a current of water, and a permanent source of supply. The flow of water need not be continuous, and the channel may be dry for long periods of time.

There are two state-by-state variations of surface water rights in the United States, riparian rights and appropriative rights. Riparian water rights are based upon ownership of land appurtenant to surface water; riparian rights tend to be the basic water law in states east of the Mississippi River. Riparian rights are usufructs only, or rights that allow use of the water but not ownership of the water. Appropriative rights are based upon a grant or license from the state to use the water for a certain purpose. Appropriative rights tend to apply to those states west of the Mississippi River. In most western states, appropriative rights are further permitted based upon first-in- time, first-in-right, a concept referred to as prior appropriation.

The United States “Americanized” the traditional English Common law riparian concept in 1826. According to Professor of Law T. E. Lauer the origin of the American riparian doctrine was rendered by a United States District Court in Tyler v. Wilkinson:

The origin of the American riparian doctrine of water use, whereby each owner of land upon the banks of a watercourse has the right to make a reasonable [emphasis added] use of the water, is customarily placed shortly after the year 1825. Traditionally, the creation of the riparian doctrine has been ascribed to two of the greatest early American jurists, Joseph Story and James Kent.

water rights

The introduction of the reasonable use idea is the driving concept in the permitting of surface water in most states and in some states, even applies to legal uses of privately owned groundwater. As opined by Jurist James Kent in 1828, the American definition of the reasonable use of water is:

All that the law requires of the party, by or over whose land a stream passes, is, that he should use the water in a reasonable manner, and so as not to destroy, or render useless, or materially diminish, or affect the application of the water by the proprietors below on the stream.

What constitutes a reasonable use of water is regularly a matter of hot debate between up-streamers and down- streamers. The situational aspect of reasonable use is subjective and determined in the eyes of the beholder; the same specific use can be usually be argued for or against easily and credibly. Most states broadly define reasonable use of water as water used for irrigation, municipal, domestic and livestock, and industrial purposes.

“Today’s REALTORS® must understand the human-water interface and the foundational role water plays in the quality of life of their communities.”

The second geological container is “diffused” surface water, or water that runs across the surface of the land either from rainfall, snow melt, condensation, or caused by other atmospheric conditions. Diffused surface water is owned by the private landowner in some states such as Texas, but not so in other states.

Private ownership of diffused surface water ends when the water enters a surface water watercourse or in some states, when it disappears into the ground and becomes groundwater.

The third geological container is groundwater. Groundwater is “water that exists underground in saturated zones beneath the land surface.” Groundwater rights are owned by the public in many states but owned by the private overlying landowner in other states. Private and absolute ownership of groundwater is recognized in Connecticut, Indiana, Louisiana, Maine, Massachusetts, Mississippi, Rhode Island, and Texas.

ground water well

In other states with no comprehensive groundwater regulations, ownership is ill- defined in their statutes or in their state constitution. Some states may claim to own the groundwater yet allow unlimited withdrawals without any liability to neighbors, making the practical matter of ownership in those states moot. The geological containers of water exist conjunctive in the hydrologic cycle.

Surface water, diffused surface, and groundwater are, have been, or will ultimately be in union with one another. Diffused surface water feeds both surface water and groundwater.

Groundwater feeds surface water both in the underflow and via natural springs. As water flows downhill above or below ground, the containers feed and deplete each other visibly and invisibly. A single molecule of water is like a chameleon as to its ownership, changing legal status as it flows through the hydrologic cycle.

Another fact of water is that it ignores political boundaries. Setting workable public water policy based upon surface political boundaries and not upon the natural boundaries of the water itself is problematic. A shared common pool water existing in several political boundaries risks conflicts between regulatory agencies weakening prudent management of the resource.

Yet another fundamental concept in water rights is ‘beneficial use’ which is generally accepted to be the use of:

… the amount of water which is economically necessary for a purpose authorized by this chapter when reasonable intelligence and reasonable diligence [emphasis added] are used in applying the water to that purpose and shall include conserved water.

A vexing question arises – what is reasonable intelligence and reasonable diligence? Of course, my use of water, and yours likely as well, is always based on reasonable intelligence and reasonable diligence, right? Beneficial use varies from state to state, clearly defined in some but loosely defined in others. The California legislature so clearly defined beneficial uses of water that their list is five pages long!

water fall

Why Land Agents Should Know Water Rights Basics

Why is it so important that real estate licensees in the United States have a working knowledge of water rights in their practice area? First, land with water is more valuable than land without water. The sales price we recommend to our clients to ask and offer is significantly impacted by water rights and water availability.

Second, it is our duty to assist our clients in determining the characteristics of any given tract they are selling or are interested in buying. We, of course, cannot provide legal advice, engineering advice, or hydrologic advice to our clients unless we hold licenses in those professions. A prudent REALTOR®, though, assists clients in finding the professional help they need.

Third, often overlooked but of high importance to our overall civic duty, is the significance that water has on the fair market value of land and its resulting impact on the ad valorem tax base that is so important to the quality of life of any community. In most of the United States public school education through the 12th grade is the most cherished social value, and most often is funded by ad valorem taxation. Some hospitals and other critical public services derive their funding from ad valorem taxation as well. As the water resources in a rural city are sold or leased to an urban area, now more than ever a battleground of conflict nationwide, the ad valorem tax base in the rural city inevitably declines leading to a decline in public school funding and other public services. This, in turn, creates a downward spiral of quality of life in the community.

underground water

Frustratingly, there is no “one size fits all” water law or policy that can be applied to a country with such wide geographic diversity as ours. The federal, state, and local governments all have and/or claim some jurisdiction over water, with policies and jurisdictions that exist in open conflict. The route to understanding water rights is challenging, but essential to the value REALTORS® add to their clients’ transactions.

REALTORS® should begin their search by reviewing their state’s constitution and seeking help from the state and local agencies responsible for water use permitting. Some states have county agriculture extension agents that are a great source for water rights information as well.

Many states such as Texas recently created statutory duties requiring real estate license holders to become “geographically competent” in the region or area in which they work; competence in water rights therefore is now the law. Today’s REALTORS® must understand the human-water interface and the foundational role water plays in the quality of life of their communities.

This article was originally published in the REALTORS® Land Institute Summer 2020 Terra Firma Magazine.

Charles Porter NLC20 SpeakerAbout the author: Charles Porter, Ph.D. is an award-winning author, speaker, testifying real estate expert in over 600 cases nationwide, and has served in various faculty teaching roles at St. Edward’s University since 2008. In 2016 he earned a Ph.D. in Economics and Business from the Universitat Jaume I in Spain with “Cum Laude” distinction. He is also a well- recognized water rights expert. He was recently appointed to the Education Standards Committee of the Texas Real Estate Commission. If you have any questions related to the content in this article, Charles can be reached at crporter@sbcglobal.net

This article was originally published in the REALTORS® Land Institute Summer 2020 Terra Firma Magazine.

Winning Large Land Listings

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Having spent over 40 years in the land business, I am occasionally asked about the biggest change I’ve seen in those four decades. The answer is one we can all be proud of, and it’s an excellent starting point for this article on winning large land listings. It’s the change in the culture of our profession.

With RLI leading the way through offering the ALC Designation, LANDU Education Program, annual National Land Conference as well as regional and state chapter events, the level of knowledge and expertise of the average land professional has improved dramatically.

The expansion of knowledge and expertise have allowed us to keep pace with rising seller expectations. As land prices have increased, sellers have become increasingly particular in the process they use to select a listing agent. It’s assumed the agent will have the level of skill and knowledge needed. Land education that was once considered optional is now a must.

“Better is not Differentiation” – Shark Tank

A major shift in the thinking of the seller has changed the way we now present ourselves and our services to them. Not long ago a listing presentation was 75% about the agent and their company, and 25% about the seller’s property. Today its 25% about the agent and their company and 75% about the seller’s property. The person who is able to articulate differentiation more clearly will win the listing almost every time. This is especially true for large properties. As the price goes up, the need for differentiation becomes even more important.

As a rule, brokers and agents create differentiation one of two ways. They show value by putting together a strong detailed presentation illustrating how they are different and uniquely equipped to help the seller sell their property, or they cut their commission.

That’s the big picture but each presentation will involve finer points of differentiation, as well, that need to be emphasized or countered. For example, a competitor may have more experience than you, the seller wants to auction and you don’t do auctions, your competitor has the same marketing tools you do and you are not much different in any way. You need to be prepared to address these and other points that will arise.

Experience Helps Win Large Land Listings

Let’s look at experience first. After my presentation for RLI’s Virtual NLC20 event, someone asked “How do you get in front of the seller to present in the first place?” I get that question a lot. Some have the misconception that other REALTORS® are just invited to present. If they are invited, it is only after a lot of hard work. You must consistently communicate your message to those who own the kind of property you want to sell and use every opportunity you have to show that you are relevant in that market. If you are doing that and still being looked over it’s almost always about experience.

This is common, many agents skip an all important step and try to compete for prime listings before they are ready to do so. It sounds odd but the first step in getting large land listings is to get experience. It’s extremely hard to win this type listing until you are proven. So, how do you get experience when sellers won’t list with you because you don’t have experience? You find someone who has experience you can partner with; you borrow their experience.

The truth is you need an experienced partner for the same reason the seller wants experience. There’s a lot more likelihood you will get the property sold. Establish a network of people (RLI is an excellent place to start) you can work with on specific properties. Get a partner for each property type: farms, ranches, recreational, timberland, commercial, etc., and for separate geographical areas. In Texas, for example, selling property in West Texas is different than selling in East Texas so get someone who knows the territory. Often when you cross a state line things change, so having a partner in the state will be helpful. Also look for opportunities to gain experience. Work with other agents in your office on large Listings. Help them gather information and build a package or prepare a listing presentation. If your company does auctions, help show buyers around on inspection day. Your focus should be to do everything you can to add that deal as one you worked on as part of your experience.

Selling someone else’s land listing is a great way to get the credibility to win more listings. Get to know the players in your area, tour their listings when you have the opportunity, know the inventory in your market so you can work with buyers. It doesn’t take many sales at this level to make a big difference in your resume.

land listing ranch

Sometimes you will find yourself in a presentation where it appears you are not really much different than some of the others you know you will be presenting against. The level of experience is close to the same, they’ve had some nice sales of similar properties and you have too and you both use almost exactly the same marketing tools. If you know the competitor that well, you probably have an idea how they will present and how you can present differently. If you think they may just show a website or publication, you dig deeper. Know how many visitors the website has or how many subscribers the publication has. Know the kind of followers the source has and why they are the kind of people who might buy the seller’s property. Show examples of properties similar to the seller you’ve sold or that others have sold through that source. If nothing else, prove that you pay more attention to detail and are more thorough that your competitor.

Consider An Auction To Land Large Listings

There is no better example of differentiation than trying to convince a seller to give you a conventional listing when they have a reason they need to sell at auction. That scenario literally defines differentiation. Remember, differentiation is giving the seller something they want that your competitor can’t do for them. While every property is not right for auction, many of the deals that do go to auction are large properties with a motivated seller. When I had my brokerage, the biggest sale in my market almost every year would be an auction. I wanted that business but, even with auctioneers charging a significant upfront marketing fee, I was never able to win a single listing from an auctioneer. The seller simply had needs that could only be met by the auction method. For example, auction allows the seller to choose the day the property will sell.

Auction allows the seller of a prime property to get more than they might have listed it for conventionally because the seller does not have to disclose his asking price first. Auction allows the settlement of ownership dispute or estate liquidations with more transparency. Auction provides a cleaner “as is” sale without contingencies, and auction compresses the marketing period and accelerates the sale time.

“Don’t act like an amateur and expect to be paid like a professional” – Jared James

All those things are extremely difficult, if not impossible, for a conventional broker to do. The only way you can win part of that business is to find a good proven auctioneer to work with and offer auctions yourself. It’s unlikely that you will be able to recruit the kind of auctioneer you will need as an associate. You will probably have to work on a co-op basis, with you finding the auction and bringing them in to help negotiate the contract and do the sale. Experience is extremely important in the auction business. A failed auction can cost you credibility and take years to recover from. Do your homework.

Choose an auctioneer that has a history of success and fair dealing then work hard to hold up your end of the bargain and form a long and lasting partnership.

Nail The Presentation To Land The Listing

All these things should come together in a formal presentation. Remember, your presentation is the seller’s first glance at your work as it relates to their property. It’s hard to spend the time and resources preparing when there is a chance you might not win the listing, but you have to. It’s game day and not a time to hold anything back. Your goal should be to have the most professional presentation the seller is going to see put together in a way that highlights the seller’s property and your differentiation.

By now, I hope it’s evident that winning the best listings is a long-term commitment. It won’t happen by accident. Create a plan with a timeline for getting the training and education you will need to deliver the highest level of service. Form and maintain a strong network of professionals by specialty and geographical area, build an exceptional listing presentation and learn to express your value in terms of how you are different, and how and why that difference will help get the seller’s property sold. Aim for excellence every day. It’s hard work but, in the end it’s well worth it if you’re winning large land listings.

This article was originally published in the REALTORS® Land Institute Summer 2020 Terra Firma Magazine.

Richard Thompson, United CountryAbout the author: Richard Thompson began selling land in 1974 and joined the management team of United Country Real Estate where he now serves as Executive Vice President in 1988. He participated in hundreds of land transactions as an agent and broker and assisted with many others nationwide in his current role. His experience includes farming wheat, soybeans, cotton, milo, rice, hay and cattle which helps him connect with a broad range of sellers. His specialty is listing and seller representation.

The Future Of The Land Brokerage Industry

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As nearly all businesses are forced to pivot quickly in order to meet consumer expectations amid the Coronavirus pandemic, a glimpse into the land brokerage industry — which has been evolving rapidly due to technological advancements and changing consumer behavior—is extremely relevant today.

Technology’s Disruption of the Land Brokerage Industry, and the Coronavirus Pandemic Acting as a Catalyst

Prior to COVID-19, technology was already making a noticeable impact on both our businesses and personal lives. Technology has forever changed communication, shopping, banking, education, entertainment, and, recently even how we visit with our doctors. But we didn’t fully understand how suddenly the benefits of technology would shift from being a convenience to an absolute necessity.

Most of the world came to a screeching halt a few months ago. Meanwhile, the innovative, forward-thinking businesses have proven they don’t need to stop their dribble to pivot; they’re going straight to the hoop for the score. Those effectively wielding technology are dominating the marketplace, whether we like it or not.

Before the pandemic, it had been predicted that 40% of both blue- and white-collar jobs would be lost to technology over the next 15 years. Since the onset of COVID-19 and the shutdown of our economy, it’s become clear that loss of American jobs to technology will occur more rapidly than originally predicted. And the real estate sector is no exception.

future of land brokerage industry

Long before Coronavirus had become a household name, massive disruption had been going on in the residential real estate sector. Companies effectively leveraging technology, data, google rankings, artificial intelligence, and social media were covering ground faster than Murder Hornets. That’s why we must learn from these residential companies.

They are changing the industry’s message with marketing slogans such as “Real Estate, Made Simple” and “Finally, the Way Real Estate Should Be.” Some of these businesses are demonstrating how the residential real estate industry has been ripe for disruption.

On a related note, businesses in general are seeing consumers demand more transparency. Consumers expect relevant, accurate, free-of-charge data to be at their fingertips to assist them with their decision-making process. If businesses are unable to meet their expectations, they’re on to the next vendor.

“…86% of real estate agents will be replaced by robots over the next 20 years.”

A recent Oxford University study predicted that 86% of real estate agents will be replaced by robots over the next 20 years. This statistic could be scary, but it’s not all doom and gloom. The real question is, will you be part of the 86% pushed aside, or will you be part of the elite 14% who are taking the time to learn how to stand out, stay relevant, and remain valuable? If real estate professionals can better serve clients by providing exactly what they need on a personal, emotional, and technological level, while saving them time and money, we become invaluable.

As real estate brokers, our path ahead may not be as easy as it has been in the past, but it’s important to seek opportunity in every challenge; do not sit victim to the changing circumstances. Be coachable and seek mentoring from others who can provide valuable tools and insight into changes and updates in the land brokerage industry.

As consumers take the lead in communicating what they want from land brokers, it’s important to go above and beyond to protect our brands and reputations, at all costs. Take caution: enabled by tools like Yelp, Google, and Facebook reviews, the service industry is being placed under a microscope more than ever before. Consumers will have access to how well or insufficiently we’ve performed, and they’ll base their buying decision on that information, and for many of them, that information alone.

The Bottom Line

There is no way to slow the pace of technology. We must embrace the impact it’s making in every industry, especially in new ways of connecting and presenting valuable information to our consumers in the land brokerage industry.

They are the ultimate shot caller, deciding who wins and who loses. Only those companies that can reach and provide the best consumer experience will win. Participation trophies in the land brokerage business are a relic of the past.

This article was originally published in the REALTORS® Land Institute Summer 2020 Terra Firma Magazine.

Aaron Graham, ALCAbout the author: Aaron Graham, ALC, is Partner and Chief Innovation Officer with National Land Realty. He’s a licensed real estate broker in Nebraska, Iowa, and Kansas. Since he entered the real estate business after retiring from a successful NFL career, he’s brokered over $300,000,000 of land transactions throughout the Midwest.

RLI 2019 APEX Award Winners

Getting To The Top: Tips From The Nation’s Top Producing Land Agents

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The Realtors® Land Institute is excited to share top advice from the winners of our 2019 APEX Awards Program, sponsored by The Land Report, as the top producing land agents in the country for 2019. The APEX Awards Program is designed to recognize the excellence and performance of the best in the business by distinguishing agents with these prestigious production-based awards.

Andy Flack, ALC

“To be successful at anything one must become knowledgeable, whether by education, experience or both. At the same time, persevere, be consistent, and exhibit high integrity and a hard work ethic. Excellence in all facets of your profession. And also, successful people know that ‘no’ is a powerful word and a complete sentence.”

– Andy Flack, ALC, HomeLand Properties, Inc., Huntsville, TX, APEX 2019 Top National Producer and APEX 2019 Broker of the Year in Timberland Sales

Ryan Sampson, ALC

“Listen to what your client’s goals are and, once you truly understand them, work your behind off to make them a reality. You are only as good

as your client’s success.”

– Ryan Sampson, ALC, CCIM, Eshenbaugh Land Company, Tampa, FL, APEX 2019 Broker of the Year in Commercial Land Sales

“My best piece of advice is to stay client focused and help them accomplish their goals. In the words of the late Zig Ziglar ‘You will get all you want in life, if you help enough other people get what they want.’ So our job is to really understand our clients’ goals and objectives, and to help them meet those goals and objectives.”

–          Dean Saunders, ALC, CCIM, SVN Saunders Ralston Danzler, Lakeland, FL, APEX 2019 Broker of the Year in Ag Land Sales – Ranches

Steve Bruere

“Collaboration and abundance are two things that are a huge part of our culture at Peoples Company. There is no shortage of opportunities to pursue and, when you open up communication with others in the industry and within your own office, it creates more opportunities for everyone. This recognition is more about the collaborative culture at Peoples Company and a reflection on our team more so than an individual achievement. Most of our auctions have 10 to 15 of my colleagues involved. It’s truly a team effort and wouldn’t be possible without the abundant culture and collaborative efforts at Peoples Company and others in the industry.”

–          Steve Bruere, RLI Member, Peoples Company, Clive, IA, APEX 2019 Broker of the Year in Auction Land Sales

Marty Domres, ALC

“I personally don’t think there is one single piece of advice that I can give. There are several things that need to happen to be successful. The first piece of advice, is to learn everything you can learn about real estate, learning is a never ending process. The more you learn the better you get! Persistence definitely pays off! Don’t give up! Concentrate on building long term relationships. You have to be useful, by providing information, a product, or a service. I can’t tell you how many times property deals have come back to me. Last, always be honest! If you don’t know, tell the client you don’t know, but you will get back to him with an answer as soon as possible! These are the things that have worked for me. I hope this advice helps you!”

– Marty Domres, ALC, CCIM, Domres Real Estate Investments, Inc., APEX 2019 Broker of the Year in Residential Land Sales

Troy Louwagie, ALC

“Helping buyers and sellers acquire and sell farmland continues to be a people business. Buyers and sellers rely on their Land Broker to be their Trusted Advisor. We do this by providing professional services above and beyond what is asked. This is done by treating people with integrity and honesty. Also, by keeping up to date with what is going on in the land market and by communicating it with your clients at all times. Making this a top priority builds lifelong relationships. If you do these things, everything else will fall into place.”

– Troy Louwagie, ALC, Hertz Real Estate Services, Mt. Vernon, IA, APEX 2019 Broker of the Year in Ag Land Sales – Crops and APEX 2019 Wrangler

Joey Bellington

“I know this advice may sound very basic, but sometimes the basic things are the best things! It is this: always put the interests of your client before your own. As brokers, we have so many different ways we can handle our business – some ways are good, some are bad. Usually   the simplest way for me to stay on the right track is to do my business with integrity, and then simply put my clients’ interests first. When a broker learns to do this well, that is, when they are really building a career they can be proud of, instead of just closing one sale.”

– Joey Bellington, RLI Member, Whitetail Properties, San Antonio, TX, APEX 2019 Broker of the Year in Recreational Land Sales

The RLI APEX Awards Program, sponsored by The Land Report, celebrated its third year with a record 105 applicants totaling a combined $2.65+ billion in qualifying transaction volume and 3,535 sides represented. All land professionals recognized as part of the RLI APEX Awards Program are active members of RLI. The 2019 APEX Top Twenty Award winners were ranked by qualifying production volume. For more information on the award winners, make sure to get a copy of The Land Report, one of the industry’s leading magazines for landowners and land professionals, which will publicize the top winners in their upcoming Spring 2020 issue. All land real estate professionals are invited to join RLI and apply to the prestigious APEX Awards Program next year. Learn more at https://www.nationallandconference.com/national-land-conference/rli-apex-awards-program

This article was originally published in the REALTORS® Land Institute Summer 2020 Terra Firma Magazine.

Subdivision land real estate course

Secrets To A Successful Subdivision Land Development Process

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Successful vs Unsuccessful Development Projects

My name is Bobby Mink and I have the pleasure of being one of the instructors for RLI’s Land University (LANDU) Education Program.  Having been around the construction industry for over 40 years, I realize the need for great training sessions like Subdivision Development.  As a residential builder for many years, I had the chance to see the impacts of both good, and not so good development planning. As I was promoted through the management ranks through the years, the importance of great planning and a really good land development processes became painfully clear. There are a few areas that are a part of our Subdivision Development class that make a huge impact on the success or failure of a Subdivision Development.

The Research and Analysis Phase

The first area is the research and analysis phase. I have worked with organizations where every detail was gathered, reviewed, and processed. Those developments generally turned out really well and extremely profitable. I have also worked with organizations where our “gut” says this is a good deal for us. In those cases, the lack of thorough and detailed analysis created for catastrophic subdivisions where profit margin, price and product missed by a mile.

The Contract Phase

The next area that creates a real challenge when buying and developing a subdivision has two parts that really impact the journey. Part 1 is the contract phase. In the organization that had a well-defined process, the company with good systems and processes created a relatively predictable timeline for the development. In other organizations, the “gut” process usually produced a timeline that was missed by a mile.

Pitfalls To Avoid During The Contract Phase
  • Not taking into consideration how long it takes to get all the site inspections done.
  • Not knowing how long it takes to meet with city officials.
  • Not knowing how long it takes and how difficult it is to meet with neighbors and Home Ownership Associations (HOAs).

This lack of process can create an ever-moving target for the investors, the builders, the sales and marketing team, and the community.

Development Phase

Part 2 of this challenge is the actual development or vertical construction phase of the process. In the organization with good processes, there was a defined and managed schedule with scopes of work that moved along relatively predictably. Knowing that unforeseen things can arise, and we can have bad weather, sickness, vacations, or supplier and trade contractor issues, a well-processed and well-scheduled subdivision development can have a somewhat clear start and completion time frame.

However, if there are not good development processes and schedules, this phase can drag on for months longer than planned. Once again, for a builder planning on new houses starts to hit his projected numbers for the year or for a sales and marketing company planning on new homes for an agent to sell, this type of unpredictability is catastrophic. You may not only lose your builder client, but you may also lose your sales and marketing team and risk changes in the development’s codes, inspections, municipality buy-in, and neighbor and HOA challenges all because of a lack of execution and process. And, it is super frustrating and costly for everyone involved.

So, my best recommendation is for land agents to join us for RLI’s newly-updated LANDU Subdivision Land Development class that I teach so you are prepared to execute the best and most profitable developments you can!

Bobby Mink, LANDU InstructorAbout The Author: Bobby Mink is from Atlanta, Georgia and has been in business management for over 20 years. From Builder to Project Manager and General Manager to Vice President of Operations and Development as well as Vice President of Sales and Marketing and Chief Operations Officer. Mink has had the opportunity to manage all types and levels of the building industry as well as managing sales and marketing. Mink has managed and grown several startup home building opportunities using strategic planning, fundamental systems and tactics to achieve the desired outcome and turn around opportunities for struggling companies. He has also used his experience with land development to use great start up processes for new developments being acquired and being brought online. Through his corporate coaching, Bobby has helped solidify corporate structure, communication, accountability, clarity and teamwork for countless organizations. As the owner and Head of Coach for Choice Consulting and Management, LLC, Bobby has had the opportunity to coach business owners on how to grow their companies, set up streamlined processes, effective communication, accountability, increased profitability and customer service by putting in place good, fundamental proven business principles that help individuals and organizations to reach their full potential and inspire that change with passion. Mink has been an instructor for the NAHB for over 12 years. Bobby is the author of his new book “CHOICES’. He is also a John Maxwell Team Member, DISC facilitator, Certified Church Growth Coach and holds designations from the NAHB in CMP (Certified Marketing Professional), CGB (Certified Graduate Builder),  CSP (Certified Sales Professional), GMB (Graduate Master Builder), CAPS (Certified Aging in Pace), MIRM (Member of the Institute of Residential Marketing). If you have any questions on this topic or about this course’s content, I can be reached at bmink@choiceconsulting,man.com or 678-561-2169.

 

 

Wire Fraud – Protect Your Business and Your Clients

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Wire fraud is a growing problem for everybody involved in real estate transactions.  This article will discuss Business Email Compromise (which may culminate in a theft by wire fraud); what Business Email Compromise (BEC) is and why it is important for you to know about; as well as what you can do to identify potential problems to protect your business and your clients.

What is Business Email Compromise (BEC)?

phishing imageBEC is also known as phishing or wire fraud.  Frequently, a fraudster poses as somebody else (possibly a known person, a potential client or business associate) to gather sensitive information and/or install malware onto your computer.  Once they hack into somebody’s email, they usually wait in the background of a transaction.  Software is often used to scan the content of emails and alert to an upcoming transfer of money.  Just before money is to be transferred, they come out of the shadows and attempt to divert the money to an account under their control.  Remember that email addresses and telephone numbers can be spoofed.

Why Land Agents Need To Know About BEC

BEC is the most prevalent wire fraud scheme targeting businesses today.  It has been reported in all 50 of the United States and in 177 countries.  Real estate agents, title companies, law firms, sellers and buyers (in real estate transactions) are the most targeted for wire fraud.  Although your email and computer system may be secure, somebody else’s in the transaction may not be.  It only takes one person in the transaction to be hacked to introduce a risk of loss that can affect everybody!

BEC is a fast growing problem and has been described as the modern day bank robbery.  However, it is much more lucrative and the criminals are less likely to be caught.  According to the FBI’s Internet Crime Complaint Center (iC3), from 2015 to 2017 there was an 1,100% increase in reported victims and a 2,200% increase in reported losses.  Between October 2013 and July 2019, over $10 Billion of losses were reported in the United States.  Since some businesses are afraid of reputational damage, the actual losses may be higher than what was reported.  The FBI estimates there is an average of $8 Million in losses each month in real estate transactions in the United States.

The FBI estimates there is an average of $8 Million in losses each month in real estate transactions in the United States. 

As a result of this growing threat, to protect your business and your clients, be suspicious and at high alert.  Whenever the movement of money is involved, assume that somebody’s email has been hacked and you may be communicating with a fraudster!

How To Protect Your Business and Your Clients From BEC

A wire fraud causes numerous damages to you and your clients in addition to a loss of money.  As mentioned above, the fraud may cause reputational damage to a business or its agents.  There is also a considerable impact on efficiency.  A lot of time and emotional energy can be expended trying to get the money back, checking computer systems, changing passwords, etc.

Even though tactics change, there are a few common “red flags” that you should be aware of:

  • Multiple or changed wiring instructions. Wiring instructions are rarely changed because business bank accounts are not frequently changed.  Some bogus reasons that have been given for changed wiring instructions may include: “the account has been closed” or “the account has been placed on hold by the bank and is not effective at this time”.
  • Bad Grammar. Many (but not all) fraudsters are foreign and may misspell words, use a word or phrase incorrectly or not as commonly spelled or spoken in American English.  For example, “authorisation (British) vs. “authorization” (American).
  • Unusual Wire Recipient. Generally, deposits and closing funds are wired to accounts in the name of a settlement attorney, an escrow or title company or the real estate agent holding earnest money.  Any other payee on the account should be considered to be a red flag.
  • Changed or spoofed email address. The changes may be subtle and missed if somebody is in a rush.  For example, instead of Baker@TheTitleCompany.com the email address might be changed to JohnBakerTheTitleCompany@gmail.com or there could be a very subtle change to the name such as John.Baker@yahoo.com to John.Bakar@yahoo.com.  However, sometimes the fraudsters are able to hack into the actual email account and send emails form it.
  • Does the communication make sense in the context of the transaction? For example, is the “settlement agent” asking for a wire so they can send a check for the closing?

wire fraud security

So, What Can You Do?

  • Be cautious if the person on the other end of the emails wants to rush things. Fraudsters want to create an urgency and cause you to rush because that increases the chance you will miss “red flags”. For this reason, it has been noticed that many attempts take place on Fridays and at the end of the month because of the increased transactional volume.
  • Only send information to the person(s) who need it. Be cautious with “reply to all”.  The more people that are on an email string the higher the chance that your email goes to a fraudster.
  • Be cautious before clicking on a hyperlink sent by an unknown person and “hover” over links before clicking to see a preview of where it will take you.
  • Keep all software patches on and all systems updated.

If you discover you are the victim of a fraudulent incident, immediately contact your financial institution to request a recall of funds.  The longer you wait the more likely the funds will be lost forever!  As soon as possible, file a complaint with the iC3 at www.ic3.gov.  You can also obtain internet crime prevention tips and crime schemes at the iC3 website.

James Miller, EsqAbout the Author: Jim Miller, Esq., is an Associate General Counsel for Investment Property Exchange Services, Inc. (IPX1031).  IPX1031, a Qualified Intermediary, is a national leader in 1031 tax-deferred exchange transactions and a wholly owned subsidiary of Fidelity National Financial, Inc. He is also an instructor for RLI’s Tax Deferred 1031 Exchanges LANDU course. For questions or more information on exchanges, call (888) 771-1031 or visit the website at www.ipx1031.com.

Building Your Land Agent Brand

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Building your land agent brand can be a challenge in a saturated market, where many people think they can be real estate agents, and many of those agents also think they know enough to play the land game. Differentiating yourself from the social media savvy rookies who may be all hat, no cattle, is a newer battle land agents face today. However, the ongoing dilemma is sharing your unique advantages from even the seasoned agents, whether you share the same brokerage firm or are an independent agent competing with big name firms.

The foundation of consistently communicating your distinct value is a well-designed brand promise. You must be able to communicate not only the problems you solve, but how you solve them uniquely, in order to get people to part with their cold, hard cash.

The formula is simple: your name + solves this specific problem + uniquely this way + for these specific people.

However, filling in the formula with your details is not-so-easy. In fact, most people get stuck on the uniquely this way and for these specific people parts. Some of the vanilla answers business professionals use in an attempt to differentiate include claiming, “exceptional customer service” or “very experienced” as their unique way of solving problems, and identifying “anyone who wants to buy and sell land” as an ideal customer.

The reality is, countless agents in your market, let alone the country, could likely claim those exact same things. So they aren’t unique, nor are they specific. It is essential that you dig deeper, evaluating who your best clients are and what they all have in common. When you find the sweet spot of clients you enjoy working with and who are also your most profitable clients, it is time to study those people and try to replicate them through your branding and marketing efforts.

A Tale of Two Brands

To illustrate how a clear brand promise can increase your reach and revenue, consider the power of two high-end brands that consistently gain market share, despite their substantial price tags and limited audience: Rolex and Louis Vuitton.

You will never see them market, nor advertise in the same places as Wal-Mart or Dollar General. Wasting time and money advertising to the eyeballs that are interested in budget-friendly retail is not in their best interest. They are clear on who their exact ideal customers are so they can:

  1. Share their brand promises through compelling storytelling that emotionally triggers their ideal customers.
  2. Visually uphold their brand promises in a way that delights their ideal customers.
  3. Deliver on their brand promises in a way that meets the high expectations of their ideal customers.

How to share your brand promise through compelling storytelling

Your personal story holds all of the clues you need to differentiate yourself. By following the breadcrumbs you have left behind in life, patterns will emerge that combine your personal satisfaction and your ability to effectively contribute to people and situations. Consider all of your professional and personal experience when reflecting on what makes you unique. For example, if you have served in the military it communicates that you have achieved a special kind of discipline and dedication. You are likely to attract others who have or do serve in the military, as well as those who especially respect people who have military service. Does serving your country have anything to do with selling dirt? Not exactly, but it is a piece of your story that can create an emotional connection with your ideal customer.

Perhaps you have political experience, empowering you to navigate the law and key stakeholders involved in a deal. Or maybe you not only broker the land sale, you also offer land management. Or perhaps you are the third or fourth generation in your family to be a land agent. How do you think that stacks up against a rookie when you can reference a lifetime of multi-generation land conversations at the dinner table?

Be intentional about telling such stories through your blog posts, videos, social media, website copy, while networking, in media opportunities, when speaking, or through any other marketing activity you pursue.

land agent branding

How to Visually Uphold Your Brand Promise

Rolex and Louis Vutton both have visually compelling brands that invite prospects and customers into their story of luxury, prominence, and success. They are sharing a glimpse of what it feels like to sport their products. Their visual branding is designed to evoke an emotional response to trigger a purchase.

Of course, another reason why it is important to understand your target market is to understand what other brands they enjoy, thus giving you a roadmap of how to visually stimulate your ideal customer. You can simply ask your previous and current clients what their favorite brands are via a survey, or you can simply observe along the way. For example, if your ideal customer wears an Apple Watch, has an iPhone, and is concerned about how close the nearest Whole Foods is to the property you just showed them, you can do a quick scroll through those websites and social media profiles to get inspiration for your own visual branding and messaging. Whether it is font selection, the amount of white space, color selections, or the style of images, you can easily use those visual cues to help you craft your own visual brand.

Remember, you can’t illustrate a book until you write the story, so be sure the visuals for your unique visual brand represent your unique brand story. The visual side of your brand is merely an aid to telling your brand story. Importantly, your branding should always be consistent, so be sure whatever path you choose is the one you remain on day in and day out through all marketing channels.

rolex branding

How to Deliver on Your Brand Promise

If a Rolex watch or Louis Vutton purse had any issues, undoubtedly, its owner would know the respective company would fix it in short order. They are trusted to deliver on their brand promises of quality, excellence, prominence, and more. In the same way, you must make it clear that you will always deliver on your brand promise.

First, you must do good work. While that seems obvious to the experienced land agent, it is unfortunately not the norm. Simply doing what you say you will do will go far for your brand reputation. Further, be sure to secure testimonials as soon as you delight your customers. Allow your customers to toot your horn for you and reap the powerful benefits of peer reviews. Be sure to note any awards, certifications, education, and media coverage you received, as appropriate, which are also forms of social proof that you are great at what you do. While you may feel like you are bragging, any such announcement is a small blip on the radar of the average person who consumes an incredible amount of content each day. If you do not share your successes, how do you expect anyone to choose you instead of a less worthy agent who may not look out for their best interest? Save your potential clients from a lazy or inexperienced agent for the job by simply sharing the proof that you will have their best interest at the forefront of all you do.

Clear Branding Equals Clear Marketing

When you are clear on your brand you become clear about how to strategically market your brand for results. Understanding who you serve, what problems you solve, and how you solve them uniquely, empowers you to position yourself through targeted campaigns and strategic networking. You can’t be everywhere, all the time. Not every social media channel is for you, nor is every magazine, conference, or website somewhere you should invest time and money, as your ideal customers are not everywhere, either. Further, when you are clear on your brand, you can get clear on your internal processes and train your team to uphold your brand promise, as well. Remember, no one wants to be sold to, yet your ideal customer wants to buy from someone who attracts their business. If you effectively share your brand story and the results it gets, you will become the only option in your ideal customer’s mind, eliminating competition altogether.

Amber HurdleAbout The Author: Amber Hurdle Consulting empowers companies to strengthen their brands from the inside out through talent optimization. They do this in three ways: By working with leaders on their personal brands, so they become self-aware and see and harvest the greatness in others. By using a scientific, repeatable method to recruit, retain and inspire top talent, amplifying world-class employer brands; and by leveraging those strong leaders and a “best places to work” environment so that happy employees are serving happy customers, ultimately elevating their business brands. Amber is married to Geoff Hurdle, ALC, and together they have three children and a fur baby: Kristen and Brittany, also in the land business, Derek, a junior in high school, and Nashville Gibbs the Cavapoo, who continuously works on being Instagram famous. Learn more at amberhurdle.com.

land market outlook

Seeing 2020: Land Market Current Conditions & Outlook

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The longest economic expansion in U.S. history continues to churn out more output and job additions with each passing month. November 2019 marks 125 consecutive months of growth and the momentum factors hint at the trend continuing into at least spring of 2020. Then what? A recession? Not likely, except for one policy error.

Though the populace is intensely polarized politically, as related to the economy, U.S. consumers are indicating high confidence. The consumer confidence index was 125 in September, well above the 100 neutral mark seen throughout 2019. For reference, the index has been under 100 for nearly a decade starting from 2007. The solid expression of confidence about the economy is without a doubt due to the very low unemployment rate of 2.7%, an all-time high in total household wealth in the country as the stock market boomed, and record high real estate values. The prior peak in the net worth of all households was $70 trillion in 2007 right before the last recession, sunk to $60 trillion at the depths of the foreclosure crisis, and then rose to $113 trillion as of mid-2019. Quite an incredible feat, though we should be reminded that wealth holdings have become much more concentrated at the top. All this could mean good things for the land market outlook in 2020.

Consumers consequently are opening up their wallets. Consumer spending rose 2.6% in the second quarter of 2019, after adjusting for inflation, and has been the prime engine for GDP growth over the past few years. Spending on consumer durable goods – with a long product life span – has been even stronger at 4.4%, attesting to the longer- term positive assessment of the direction of the economy. There is no over-borrowing to fuel personal consumption. Finances are coming from an employment growth of 2.15 million net new jobs, rising wages from $27.30 per hour to $28.09 over one year, and higher wealth by a few trillion dollars. Miraculously, there are more job openings today (7 million in August 2019) than the number of unemployed (5.7 million workers).

However, there is not as happy a story for businesses. Corporate profits are indeed very high, especially after cuts to the corporate tax rates a few years ago, rising from $1 trillion in 2008 to nearly $2 trillion now.

This partly justifies why the stock market is near record highs. But even with healthy financial conditions, companies have been less aggressive in spending the cash for machinery, factory expansion, and other investments.

Business investment spending contracted in the second quarter of 2019. Spending on equipment barely changed, but spending on commercial building fell by 4.7% from a year ago. Though assuring no oversupply of commercial real estate construction, the fact that businesses are pulling back is concerning and raising the question as to why.

gdp growth land market outlook

The timing of businesses getting cautious is directly related to the raising of tariffs and hostile rhetoric towards international trade. In fact, many companies in their public statements during quarterly earnings calls say they are cautious because of uncertainty related to trade prospects. REALTORS® specializing in commercial real estate have witnessed that trend as leasing activity markedly slowed in the second quarter to only 3.1% growth compared to better than 10% gains in 2016 and 2017, and 5% gains in 2018. Moreover, even business travel has weakened, as evidenced by falling occupancy rates at hotels, which is now at 72.4%, a full 100 basis points lower than from a year earlier.

The most troubling aspect is the actual slowdown in global trade. U.S. exports fell 1.7% recently while U.S. imports grew by only 2.6%. When both exports and imports decline for a few straight quarters, then a recession is near certain with job cuts. In a growing economy, both exports and imports should be rising by at least 5% per year. This slowdown in trade has had repercussions elsewhere. Just about every notable economy is experiencing slower economic activity in 2019 compared to recent prior years. The International Monetary Fund (IMF) cut its global growth estimate to 3.2% for 2019 after having forecasted 3.6% earlier in the year. The economies of the world appear to move in sync, like a rising tide lifting most boats — and the movement reverses when trade restrictions are put in place. The stock market has nearly always cheered at the promise of a trade agreement and sunk following the rhetoric of a trade war and retaliations of more tariffs. More positively, it is becoming clear that both the U.S. and China are looking for a deal. In such a case, business spending could boom.

One promising sector that could help with future economic growth is real estate construction. America is facing an acute housing shortage – for both single- family owner occupancy and for multifamily apartments. Home prices and rents have been rising far in excess of wage growth for five straight years.

Vacancy rates are at historic lows. The underproduction of new homes over the past decade has cumulatively resulted in around five to six million housing units that are needed today. Even in a normal year, only around 1.5 million new homes can be constructed. Therefore, increased construction needs to occur for multiple years. In 2020, specifically, housing supply is expected to improve, with housing starts expected to hit 1.4 to 1.5 million, up from 1.275 million in 2019.

With home builders still likely to be constrained by what they call the 5Ls — labor, land (lots), lending (financing), lumber (raw materials), and restrictive laws (regulation) — housing starts will still not match the demand from household formation (1.2 million), or the replacements for demolished or obsolete housing (about 450,000). All that means more demand for land and lots.

“…more demand for land and lots.”

In the commercial market space, industrial properties have outperformed retail spaces, arising from the stronger growth in online shopping and quick distribution warehouse needs. Investors are paying much more for industrial flex/warehouse properties on account of low rental vacancy rates and the sustained demand for e-commerce sales. Given that warehouses can be built in off- center sites far away from downtowns and population centers, the demand for land will grow in outlying regions.

In the meantime, the interest rates will be at near historically favorable conditions. The Federal Reserve will more likely cut its fed funds rate a notch in 2020 rather than increasing. It just means that 10- year Treasury yields will remain low at around 1.6% and the longer term borrowing rate at under 4%. In future years, watch what happens to the federal deficit, which is expected to be near $1 trillion in 2019 and projected to surpass $1 trillion in 2020. The total federal debt level, adding of all past deficits, will reach 100% of GDP in a few years, well above the 60% that many economists consider as manageable.

The bottom line summary is that while the economy is experiencing the longest running growth period in U.S. history, there is no reason why it has to falter. The economy is expected to finish 2019 with only moderate growth of 2% due to soft business spending activity, after having notched up a solid 2.9% in 2018. For 2020, a recession is not in the cards, but this assumes some type of truce in the trade war. A trade agreement will be better still and will lift business spending.

“…expect continued job creation, income growth, and rising demand for land.”

Construction spending has to rise to relieve housing shortages and low vacancy rates in commercial real estate. Therefore, expect continued job creation, income growth, and rising demand for land.

Lawrence Yun NARAbout the author: Dr. Lawrence Yun is chief economist and senior vice president of Research at the National Association of REALTORS®. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1.4 million REALTOR® members.

Broker Tips For Choosing & Recruiting New Land Agents

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The Value in a Value Proposition

For a land real estate business to be successful, it must be good at recruiting new land agents, both attracting and retaining them. Your priority should be to have a well-defined value proposition. There are two parts to creating a well-defined value proposition for recruiting new land agents.

This first is the financial value to your team or brokerage with total agent splits, etc.

The second part will be defining the resources you provide to potential recruits, for example, in terms of leads from the company websites, technology, print ads, and whatever else it is that sets your brokerage apart. Next, you should also address the more intangible elements of why they should choose to work with you. For example, “We are the best-known land brokerage in the area” or “We have a culture of sharing that welcomes new agents,” etc.

Once you have a well-defined value proposition, it’s time to go find some talented people.

Prospecting Recruits

First things first, call agents that you have worked with in the past. Then, start calling agents that are working in the area(s) you serve. Next, begin thinking about the people you already know who are in ancillary positions that may be able to become good agents. Lenders, county extension agents, insurance agents, and even wildlife biologists are all a natural fit to join the land industry.

Now comes the time to set appointments with potential recruits. In order to have a consistent interview process, we recommend crafting a standard list of questions. This helps to maintain a consistent schedule for you and the new potential recruit, and it gives you the ability to best compare candidates. Besides if you do not have a consistent list, you will spend more time with some than others, missing information which could lead you to overlook some talented people.

Recruiting Top Candidates

Once you begin the recruiting process there are a few factors to consider.

First and foremost is determining if there is a cultural fit. If they don’t want to work from the office and everyone else does, there is a lot of potential for disagreement over the long-term. A lone wolf is not comfortable in an office full of people who share information and best practices.

Next, you’ll want to examine the potential agent’s drive or motivation. If someone is financially motivated, are they willing to do the activities necessary to earn enough business to create the income they desire? If they are only willing to put in the minimum effort and expect championship results, they are doomed to failure. It is your responsibility to set reasonable expectations upfront.

A person that says they like their brokerage but they feel like there must be something else in this business is an ideal candidate to have these conversations with. Ask about their business, how do they currently generate leads for clients? This will give you the opportunity to showcase all the tools and systems that your team offers. At this point, most people can see the value in partnering with you and are ready to come onboard. If not, set a follow up time and keep the dialogue going.

Immediately after the interview, it’s time to set follow up appointments. Consistent communication is the key – just like it is with potential sellers – remember the best agents typically are already working in the field and the decision to move to a new team is not taken lightly.

 

Tim Hadley, ALCAbout the Author: Tim Hadley, ALC, is an agent with Keller Williams Realty in Gladstone, MO. He joined the REALTORS® Land Institute in 2017 and is currently a member of their Future Leaders Committee.

 

kasey mockAbout the Author: Kasey Mock is the Director of KW LAND Division at Keller Williams Realty International. Mock is a member of the REALTORS® Land Institute, serving on their Future Leaders Committee. Make sure to check out his break out session diving further into this topic at the 2018 National Land Conference in Nashville, TN, in March.