The Role of Real Estate Brokers
Providing Information, Real Estate Consulting: The real estate market is an asymmetric market in terms of information, with the advantage always lying with the party in possession of the assets. Therefore, the role of providing accurate and sufficient information about the products and the real estate market by real estate brokers is extremely important.
Promoting Transactions, Stabilizing the Market: Real estate brokers play a role in collecting information from sellers or understanding the needs of buyers and then connecting the appropriate supply and demand. This ensures that supply and demand meet quickly and efficiently, creating favorable conditions for the real estate market to operate in a stable and vibrant manner.
Increasing Market Transparency: When operating professionally, the information provided by brokers to customers must be complete, accurate, public, and transparent. This helps develop a stable and more effective real estate market.
Contributing to Social Order and Security: Real estate is a valuable asset with relatively complex legal aspects, and it is an important asset for each country, community, and individuals. Any real estate transaction in the market strongly impacts other socio-economic activities. Through professional real estate brokerage activities, information will be publicly disclosed, negative occurrences will be minimized, contributing to the stability, order, and social security.
Lastly, Assisting the State in Improving Real Estate Market Management: The activities of real estate brokerage businesses and individuals will expose and clearly reveal conflicts of interest among market participants, thereby improving the legal framework for state management of the real estate market.
Challenges in the Real Estate Brokerage Industry
However, there are still existing limitations and restrictions in the real estate brokerage business. Notably, there is an excess of human resources in terms of quantity but lacking in quality. The real estate brokerage workforce operates unprofessionally and lacks fundamental legal knowledge in this field.
The operations of many real estate brokers are focused on quick profits and do not respect customers, resulting in harm to customers and leading to prolonged litigation, such as land hoarding and price speculation causing market fluctuations.
In the second quarter of 2023, batdongsan.com.vn conducted a survey and identified that 43% of customers responded that the reason for their loss of trust in real estate developers was due to “unreliable sales teams.”
In addition, from Q1/2022 to the present, the real estate market has faced difficulties, resulting in prolonged difficulties for real estate brokerage companies and real estate brokerage forces. The majority of current real estate brokers are just maintaining connections with the profession and existing customers. The reasons for these difficulties include:
Industry-specific factors:
This is a fiercely competitive and cyclical industry. When the market grows, many real estate brokers will join, and when the market weakens, real estate brokerage business will face many difficulties.
In addition, customers are increasingly demanding in terms of service quality, as well as the development of information technology, making real estate information more accessible and diverse. If real estate brokers do not meet these requirements, they are easily eliminated, not only during market downturns but also in stable and growing markets.
Solutions for Real Estate Brokers
According to economists, to fulfill the role of real estate brokers, every organization and individual involved must have legal knowledge, professional skills, and social responsibility.
Solutions to enhance the capacity of real estate brokers involve specialized knowledge, the application of information technology in transactions, information service management, and real estate data. Through this, the quality and professionalism of real estate brokers’ activities can be improved, and the management of real estate brokerage activities can be more effective.
However, in response to the continuous requirements of society, the economy, and technology, real estate brokers need to create higher value and truly important roles in the real estate market and society. Therefore, companies and individuals engaged in real estate brokerage need to seriously consider comprehensive innovation solutions, not just focus on improving professional knowledge, traditional skills, legal knowledge, and sales skills.
The new direction lies in personal financial planning and investment portfolio management skills
Amidst all the market and customer factors analyzed above, it will become increasingly difficult for real estate brokers to win customers if they only focus on selling products without considering the customer’s needs and finance-related factors such as income capacity, cash flow stability, overall asset portfolio status, debt, as well as barriers to choosing the appropriate product.
Furthermore, selling real estate products through “snatching” and seasonal operations without building a relationship with the customer has proven to be ineffective and problematic in recent times.
Even if pressed for sales performance or required to achieve certain key performance indicators, real estate brokers cannot sell inappropriate products to customers solely through “closing sales” or “leading needs.” We need to win customers with our own internal capabilities and knowledge. The most important thing is the alignment between the customer’s financial situation, investment needs, and the characteristics of the product, as well as financial factors such as payment methods and bank loan support policies.
In order to integrate and connect the financial landscape of customers with the real estate products they are advising, financial planning and investment portfolio management knowledge has been incorporated into training programs for professional real estate consultants worldwide, whether through formal education or internal training within companies. The stability and success rate of advising on real estate products increase if consultants can propose suitable payment plans or appropriate financial leverage. In cases where there is no optimal solution, consultants and clients can discuss alternative plans or different directions (selling other assets, borrowing from relatives, etc.) to ensure that customers avoid financial passivity when paying for the desired real estate, including existing or future properties.
