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How Hawaiian Realtors Find Their Clients

Analysis from a realtor in Hawaii about how real estate agents in Oahu and Hawaii locate and sign up real estate clients. Results from survey conducted included.

Hawaii real estate environment, from the board of government regulators to the small boutique offices of the many Principal Brokers, is nothing short of amazing. For those who have been fortunate to conduct real estate business in a number of states; from what can be told Hawaii by far has the most technologically advance approach to managing this industry. It is reflected in the automation, the building and maintaining of a strong data base and the ease of access to these records. The educational support, along with professional requirements is great and well enforced.

This lends itself to a culture that exudes stability and confidence in the market. There is full disclosure, a body of information and a wealth of convenient tools, all made handy to encourage buyer and seller confidence. The transparency is accomplished at a favorable level to promote the island’s culture in order to keep its desirability high for both domestic and international clients.

The system is primarily set to protect the consumer and to foster and encourage professionalism throughout. Nowhere is this more obvious than the de facto partnerships development by the many real estate firms, the printed media, the University system, the computer internet, the islands’ business community as well as the state and local governments.

With respect to the printed media one obvious partnership is with the Honolulu Advertiser. They are dedicated to real estate and have an area of interest worth highlighting beyond the classifieds. There you can search for categories such as New Construction, Open House, Foreclosures and Rentals. Searches can be fine tuned noting such specifics as condos or single family homes. The number of bedrooms, baths, and price may be keyed in as well. Such searches often result in the interested party contacting the listing agent or property’s manager.

Then there is the University of Hawaii’s its Real Estate Center. It was established in 1961 to provide a focus for property rights research in the state of Hawaii. It is a policy oriented center and has provided research studies on land use and international investment issues affecting the state.

The University also conducts research highlighting economic trends for commercial and residential properties. These studies have focused on such notable topics as The Japanese Bubble and the current recession that many believe has its origin in the collapse of the real estate market.

The sophistication of these reports lets the reader know we live in complicated times. Often the interpretation of these articles is best left in the hands of professionals and to seek their advice when investing in today’s real estate market is encouraged.

The internet is critical to the business of real estate. Every agent should have a minimum of at least one website to promote themselves and their listings. It is estimated that more than eighty percent of all people looking to purchase a home use the internet.

There are, countless internet, companies that have sprung up to specifically cater to the industry. The needs can be as simple as providing a services to enhance a website or as complicated as monitoring and managing feedback from those who have previewed your listings. Other services include how to map-out a real estate marketing strategies to providing online training for continued education.

The data base technology continues to get better. There are sites that have compiled statistics to help an agent design a great presentation. Some sites monitor industry performance and can be used to show how well one brokerage firm stack up with the competition. Much of this information is very beneficial as an objective source for the purpose of testimonial when in front of a client.

Then there is one of the most powerful internet tools, Multiple Listing Service, commonly referred to as MLS. For years this provider has been the backbone, how agents in the business, network with one another. Now it is the core for linking the whole system together with all interested parties, media, buyers, sellers, researchers just to name a few.

While discussing technology and its impact on the industry it would be remised not to mention how far the automation has come with respect to contracts. Although it may not have a direct relationship when it comes to how agents get their clients it certainly has a direct effect on the service. It helps make the process of buying and selling homes in Hawaii much more pleasant.

Most of the above can be found in many if not all of the other states in the country but what makes Hawaii unique is the level of organization and institutional support that has been gathered to promote the industry.

What further differentiates the Hawaii’s real estate community, from all the rest, is the holistic approach supported by the Business Culture. Nowhere is this best demonstrated than in the Open House system. Open House can be liberally defined as a place that generally has limited access but on this occasion becomes open to the public. The traditional days for having real estate open house in Hawaii are Wednesday, Thursday and Sunday. Each day has developed a general theme lending itself to a certain type of climate.

Wednesdays are termed Brokers Open and generally take place in the Waikiki community. The Brokers Open is tailored for the professional agents but the public is welcomed. On this particular day the listing agents for condos in Waikiki get to present properties to the real estate community and highlight why they are a great value to potential buyers.

Thursdays are also termed Brokers Open and are generally for real estate professionals. The properties for the most part are in non Waikiki residential areas where single family homes are the focal point. Again even though the day traditionally is for real estate agents to view other colleagues’ listing, the general public is naturally welcomed.

Finally there is Sunday Open House. Sunday is a day for all properties to be open regardless of the area or the property type. It is a day set aside primarily for the general public to preview available properties for sale. Of course agents in the business are welcomed to attend but traditionally this is a big day for agents hosting the open house to interact with potential buyers and possible future clients.

It should be noted all of these events are traditional opportunities to bringing clients together with the real estate industry. It does not matter if you are a buyer or a seller. Or if the market you are interested in is a luxury single family home, a million dollar condo, a fixer upper or a modest residence for a first time home buyer.

On days when open house events are scheduled it is not uncommon to see neighborhoods littered with open house signs. They paint the landscape marking a trail which can be followed sometime up to a mile away from your destination. The signs are a great tool for directing buyers to a listing. Often agent will compare this method of advertising with a path of bread crumbs.

Hawaii by far has perfected the Open House system and the public is well accustomed to the process. The local print media as well as radio have all bought into it as well.

To sum things up a brief survey was conducted. Active agents in the Hawaii area were asked what single strategy was the most effective for getting clients. These are the nine categories used to conduct the survey:

1. Referrals

2. Printed Media

3. The Internet

4. Repeat Business

5. Cold Calls-phone

6. Mailings

7. Door Knocking

8. Open House

9. SOI: Sphere of Influence considered mainly to be family and friends

The below tables are the result of a random sampling of agents. They have identified which activity is more likely to result in obtaining a buyer versus a seller. The first, row in each table represents all agents in the survey. While the second row of both tables, has been filtered to exclude new agents and those who tend to be heavily dependent on one category for their business.

Heavily dependent is determined when an agent focuses all their attention in a single area. They reported obtaining 70% or more of their clients from one category. For example, new agents tend to get 100% of their business from their SOI. One can see how such a heavy dependence would tend to skew the data.

Further the tables sample size was not large enough to be characterized as scientific but the randomness of the trends can be said to be fair and valid. Also the numbers reported are in percent and are based on weighted averages to smooth the data as best as possible.

The focus is on double digits entries and a comparison of the different categories, which ones are more prone to yield an agent the most clients, whether they are buyers versus sellers. For example if your strategy is to go after buyers then it would appear as an agent you should focus your energy and time in developing a plan to sit Open House and to ask everyone you come in contact with for referrals.

The table also demonstrates that referrals and sitting open house would be the preferred method for obtaining buyers regardless if you were a seasoned agent or new to the business.

% Buyers

Referrals

Printed Media

Internet

Repeat Business

Cold Calls-phone

Mailings

Door Knocking

Open House

SOI

Total

27.63

1.75

7.13

8.25

1.25

0.75

1.00

33.50

18.75

100

30.2

2.8

10.4

10.2

2

1.2

1.6

32.6

9

100

% Listings

Referrals

Printed Media

Internet

Repeat Business

Cold Calls-phone

Mailings

Door Knocking

Open House

SOI

Total

23.13

0.13

5.00

9.38

13.88

5.38

2.50

8.75

31.88

100

28.75

0.25

8.75

15

2.75

10.75

5

16.25

12.5

100

The buyer’s table further indicates for new agents there is a strong dependency on the sphere of influence to obtain clients. However, as one gains experience in the business this reliance tends to diminish.

The slack for this drop off in reliance on the sphere appears to be picked up by obtaining clients from the internet and repeat business. This would tend to be the case because the more experience agents are inclined to be better established in the industry and these resources would then naturally begin to help those more recognized.

When it comes to obtaining sellers the first row is again skewed because the inexperience agents tend to rely on who they know to get their clients. Interesting enough, the data shows that new agents find it difficult to obtain sellers from open house, while experience agents fair much better in the same category.

In the case of referrals new agents and experience ones tend to do well obtaining both sellers and buyers. Interesting enough obtaining clients, willing to sell coming from a new agents’ sphere drops off again as in the former example. It is as significant as the case of buyers but remains in double digits for obtaining listings.

Overall, referrals, repeat business and open house appear to be the prevailing strategy for picking up clients with listings. I suspect referrals are coming from the area of SOI and or the client base. I further suspect that the client base was initially built on the Open House system. Therefore, it is not surprising why the Hawaii real estate industry is heavily focused on promoting Open House. It appears to be the single most effective way to build a client base once and agents sphere has been dried up.

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