The Best Niche To Get Listings & Buyers From In 2024 with New NAR Changes for Real Estate Agents

Summary

In this podcast, Joshua Smith discusses the most effective niche for growing a real estate business in 2024. He emphasizes the importance of targeting absentee owners due to their high conversion rates for both listings and buyer acquisitions. Smith also highlights the potential benefits of this niche in light of new NAR changes, suggesting less resistance from buyers to pay representation fees. He shares his personal success with an 8% conversational listing taken rate and offers strategies for transitioning from listing to buy-side conversations, emphasizing the efficiency and expanded market territory this niche allows.

Takeaways

• 🏠 **Real Estate Niche for 2024**: The speaker believes that a specific niche is highly effective for growing a real estate business in 2024, particularly for stacking listings and gaining buyers.
• 📈 **High Conversion Rates**: This niche has one of the highest, if not the highest, conversion rates for acquiring listings and simultaneously attracting buyers.
• 🤝 **New NAR Changes**: The recent changes in NAR policies require buyer broker agreements to be signed upfront, with compensation terms negotiated before showing properties, which may affect how agents operate.
• 🎯 **Operating Like Snipers**: The market is highly competitive, and agents need to be targeted and strategic in their approach, focusing on segments of the market most likely to require their services.
• 🔍 **Identifying the Right Strategy**: Success in real estate sales is tied to identifying the right strategy, targeting the right audience, and having the necessary skill set.
• 📉 **Market Challenges**: The current market presents challenges such as tenant eviction issues, inflation, and falling rents, which can create opportunities for agents who understand the pain points of their clients.
• 👥 **Types of Absentee Owners**: The niche includes long-term investors, short-term vacation rental owners, secondary homeowners, and probate properties.
• 📞 **Efficiency in Listing Presentations**: Many listing presentations for absentee owner properties can be conducted remotely via Zoom or phone, increasing efficiency and expanding market territory.
• 💡 **Transitioning Conversations**: If a property owner is not interested in selling, the conversation can be smoothly transitioned to a buy-side discussion, allowing for continuous engagement.
• 💰 **Investor Reluctance to Pay Fees**: Investors may be less resistant to paying representation fees compared to other buyers, as they focus on the numbers and deal terms.
• 📈 **Potential Growth of Investors**: There is a prediction that investors could own a significant portion of residential real estate in the US, making them an important target market for agents.

Q & A

What is the main niche discussed in the podcast for growing a real estate business in 2024?

The main niche discussed in the podcast for growing a real estate business in 2024 is working with absentee owners. This niche is highlighted for its high conversion rates for both acquiring listings and buyers, making it a win-win situation for agents.

Why is the niche of absentee owners considered a great way to stack listings?

The niche of absentee owners is considered a great way to stack listings because it is a high-converting segment that allows agents to grow their listing count massively. Absentee owners, who may not be living in the properties they own, are often more open to selling, providing agents with a rich pool of potential listings.

How does the speaker transition from a listing conversation to a buyer conversation?

The speaker transitions from a listing conversation to a buyer conversation by first expressing understanding and appreciation for the property's good performance for the owner. Then, they inquire if the owner might be interested in adding more properties to their portfolio, offering to send information on potential investment opportunities.

What are some reasons why the new NAR changes might make the absentee owner niche more resistant to paying buyer representation fees?

The new NAR changes require agents to obtain a signed buyer broker agreement upfront, which includes negotiating the buyer compensation. This change may lead to resistance from some buyers, especially those who cannot afford the fees or those who prefer not to pay for representation. However, the speaker believes that investors, a significant part of the absentee owner niche, are less likely to resist paying these fees as they value the deal-finding and negotiation services provided by agents.

How does the speaker describe the competitive nature of the current real estate market?

The speaker describes the current real estate market as the most competitive ever seen, with the lowest number of active listings and the highest number of agents per US population. This has led to a situation where agents need to be very targeted and strategic in their approach, operating like snipers rather than shotgunning their efforts.

What are the five niches mentioned as the best for acquiring listings currently?

The five niches mentioned as the best for acquiring listings are expired listings, for sale by owners (FSBOs), divorces, absentee owners, and pre-foreclosures.

What is the speaker's strategy for dealing with the new NAR changes regarding buyer broker agreements?

The speaker's strategy for dealing with the new NAR changes is to focus on niches, like absentee owners, where there is likely to be less resistance to paying buyer representation fees. They are also preparing and theorizing about how these changes will impact their business practices, such as open houses and lead conversion strategies.

How does the speaker plan to adapt to the new NAR changes that require pre-negotiated commissions?

The speaker is planning to adapt by training their agents and re-evaluating their strategies for lead conversion, particularly focusing on how to handle situations where a buyer broker agreement must be signed and commissions pre-negotiated before showing properties.

What is the speaker's opinion on the importance of specialization in the current real estate market?

The speaker strongly believes in the importance of specialization, or niching down, in the current real estate market. They emphasize the need for agents to operate like snipers, targeting specific segments of the market that are most likely to require their services, rather than shotgunning their efforts across a broad spectrum.

What is the speaker's advice for agents who are struggling in the competitive real estate market?

The speaker advises struggling agents to focus on strategy, process, and skill set. They should identify the target audience with the highest probability of needing their services, follow a well-defined process for lead conversion, and improve their skills in having effective conversations, overcoming objections, and closing deals.

What is the speaker's prediction for the future of investors in the US residential real estate?

The speaker references a prediction that investors could own up to 60% of residential real estate in the US by 2030, indicating a growing trend of investors buying up more properties. This trend supports the speaker's belief that focusing on the investor niche is a smart strategy for real estate agents.