Mark Nash is the author of Reaching Out: The Financial Power of Niche Marketing and The Original New Agent’s Guide to Starting & Succeeding in Real Estate. He is a broker associate with Coldwell Banker Residential, Central Street Office, in Evanston, Ill. He can be reached by e-mail at firstname.lastname@example.org.
Make Relocation Part of Your Business
If you don’t have relocation in your business plan, you’re missing a moneymaking opportunity.
April 1, 2004
Some seasoned practitioners might not be fans of relocation business. Working with relocation clients and companies is often more time-intensive and may yield a lower commission because you’ll have to pay a referral fee. But I’ve found that selling in the relocation niche has brought me both financial and professional growth. Approximately 1.5 million employer-assisted relocations take place each year, according to the Employee Relocation Council. Working with relocation clients has added 20 percent to my sales volume annually since I pursued it. Plus, relocation referrals can make your phone ring more regularly than farming.
I’ve also enjoyed meeting people relocating from other parts of the country or world and making them feel at home in my community. Those smiles and thank-you letters sent to you by families who have moved 2,000 miles make the relocation niche personally rewarding as well.
If you don’t already work with this important niche, here are some things you should know about the relocation business before you get started.
- The only constant is change. Corporate and government relocation is a growing segment of the real estate industry. Corporate mergers, reorganizations, and job promotions fuel the need for companies to move employees from one location to another, around the country or the world. With dual careers, school-age children, and multigenerational households, moving can impact more than just the transferee. The increasing complexity of moving employees has helped fuel the growth of third-party relocation companies. Relocation companies’ experience in handling the logistical and financial aspects of moving an employee make them an integral part of the employer’s human resource team.
- Change brings stress. Imagine you have been promoted to a new position in a far-away city. For the transition, you have to retain your current job responsibilities in your current city as well as take on new ones; find a home in your new city and sell your current one; and commute weekly between your old and new city. While you’re working in your new city during the business week, you’re living in a hotel room or studio apartment. Your spouse or partner has a great job he or she really doesn’t want to leave, and your kids love their friends and schools. The new job is a good step professionally, but you’re not excited about moving to the new city. These factors all play a role in a transferee’s mind and can create stress for transferees and their families.
- Real estate practitioners play an integral part of a transferee’s move. While the transferee will have relocation coordinators who counsel and coordinate the transferee’s move by e-mail or telephone, you will most likely be the only person involved with whom the transferee will interact with in person. Being the only face-to-face contact can be rewarding and challenging. You also can be the only person transferees know in their new community. Educating the transferee about your community, real estate market, and schools is the most important benefit you bring to the relocation client. By helping them to transition smoothly into their new communities, you can make the entire experience a little less stressful for transferees—and you may acquire a client for life in the process.
- Relocation requires special knowledge and paperwork. Most relocation and brokerage companies request that you complete some type of training in relocation procedures, policies, and administration. The training can run from a half-day to a week. You will learn the relocation chain of command, required relocation documents, and how to interact with transferees and relocation coordinators. You should enjoy completing paperwork, as relocation requires another level of records than your typical real estate transaction. Good organizational skills and the ability to communicate professionally are essential to work in this niche.
- You will pay a referral fee for relocation business. With most relocation clients, you will pay a percentage of your commission as a referral fee to the third-party relocation company. Referral fees vary but typically fall within the 20 percent to 40 percent range. Many real estate practitioners believe that it’s worth paying the referral fee because you don’t have to spend time and money prospecting for a relocation client. In addition, you’re getting a client who is almost certain to purchase a property. Although some real estate practitioners may balk at paying a referral fee, many understand that some part of a commission is better than no commission.
You should look at relocation as another form of prospecting. The referrals and business relationships from relocation can lead to non-relocation business if your clients, the relocation coordinators, and the employer are satisfied with your services. The relocation business knows no season. I have found it is a great way to keep my real estate business pipeline full even during slower selling periods and a terrific long-term way to grow my business.
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