An International Marketplace – Is the Triangle Real Estate Community Ready?

With each passing year the composition of companies and the business they transact in Research Triangle Park becomes increasingly global. This globalization brings a continual influx of people from nations around the world to the area not only to work but to live and to raise families. With this rapid growth of international cultures in the area, suddenly there are people with seemingly endless investment capital from many different countries. Not only are they buying homes in which to live, but they are also seeking real estate opportunities for investment purposes. Are Triangle REALTORS knowledgeable enough in international real estate to fully and competently assist these investors? Are our agents aware of the differences in U.S. tax laws and IRS statutes when applied to foreign non-residents and their ownership of U.S. real estate? A word of caution is in order for both the international client and the professional REALTOR. International real estate is a very different and complex business with potential financial pitfalls when practiced by those unfamiliar with the laws that affect these purchases.

RTP has been a catalyst for international growth to North Carolina for many years. There are nearly 100 companies in the Triangle which have international corporate headquarters or offices located on foreign soil. It is truly a World Trade Zone. Raleigh was recognized recently as “one of the top ten most international cities” in the U.S. with over 87 foreign languages being spoken in the area. In addition to the Triangle’s draw, the nine-county area that comprises the bulk of the local real estate marketplace contains one of the fastest growing Hispanic populations in the country. This blending of people and cultures creates a common ground as resources are exchanged and opportunities are created for local industries not the least of which is the real estate industry. With few exceptions, every REALTOR in the area has either sold property to a foreign client or had a property listing that was sold by another REALTOR to a foreign client. The international growth and diversity of cultures are a large part of the mix, along with educational resources, economic health, cost of living, and moderate climate that continually keep the Triangle as one of the nation’s “Top Ten Places to Live.”

One of the many responsibilities of a REALTOR as a professional is to be informed. Their job is one of sharing knowledge and information with consumers and the general public. They must be authorities on schools, churches, malls, day care, assisted living, new construction, old construction, mold, mildew, radon, asbestos, well water, sewer systems, transportation issues, and a plethora of other disclosure items. Why would it not hold true that a REALTOR should be an authority on an international real estate transaction and the nuances of U.S. tax laws when applied to foreign clients? To enjoy the financial benefits and rewards of the local international market, REALTORS must educate themselves in this arena because it is becoming a large and viable segment of the Triangle market. Fortunately for the local real estate community many resources are available through both NAR and the Raleigh Regional Association of Realtors.

More than eight years ago the Board of Directors of the RRAR with insight and progressive thinking created an ad hoc Committee to explore the creation of an International Council of REALTORS. Since then, that Council has come into being and has grown to over 45 active members. The Triangle International Council of Realtors or TICOR serves as a resource for not only REALTORS but the public as well, bringing together the cultures of the Triangle by offering educational opportunities through printed materials, seminars and classes. They strive not only to educate themselves but also to include others who share their interest. Their varied activities include participation in Raleigh’s International Festival, other cultural festivals, and bimonthly luncheons hosting presentations by international attorneys, mortgage lenders, State Government representatives and various Chambers of Commerce.

With NAR approval, the TICOR group has hosted CIPS classes on four different occasions with participants from as far away as Northern Virginia and the state of Washington. Another CIPS course is scheduled for this October and is being sponsored by TICOR at the RRAR Board office. CIPS is a designation from NAR which means Certified International Property Specialist. It is achieved through class work and testing in five different courses of materials and subjects related to finance, international real estate, globalization, and five subjective regions of the world. Due to the efforts of the RRAR Triangle International Council of REALTORS there are more CIPS designees locally than in any other board in the state of North Carolina.

REALTORS in Research Triangle Park are most fortunate to live and work in such an exciting and lucrative marketplace. To have such nationally high rankings as one of the “Top Ten Cities” in so many categories and the recognition as such an international center of activity is a privilege. With privilege comes responsibility. REALTORS of the Triangle community must not only recognize the need to be informed and educated regarding the intricacies of the international market and it’s clients, but act on that need by using available resources to gain the necessary education to perform professionally.

For information about the Triangle International Council of REALTORS we welcome you to visit our website located at or contact RRAR, the Raleigh Regional Association of Realtors at 919-654-5400.

A Product Called You: 4 Ways To Stand Out For Real Estate Agents

Have you heard of ‘A2’ Milk?

Well last night anyone watching Seven’s Today Tonight Show will have.

This milk ‘product’ has broken away from the pack, it’s different and it’s getting a lot of attention (not to mention sales of ‘A2’ are booming).

‘A2’ Milk offers a really cool lesson for all would be TOP 5% REAL ESTATE AGENTS.

Here’s what we can learn from this…

Firstly, you’ve got to see your personal-brand as a product.

When you look at yourself in this way, the immediate realisation should be, hey if I’m a product so is every other real estate agent. And that’s either a good thing or bad thing in terms of you standing out and being noticed by your marketplace.

It’s a bad thing if ‘product-you’ is perceived by your marketplace to be no different than all the other ‘agent products’ out there.

It’s good, no, it’s spectacularly great if ‘product-you’ is perceived by your marketplace to be different and not only different but actually delivers them a better solution than the others.

So how can you become the ‘A2’ of your real estate marketplace?

Well, let’s take a few queues from the new milk success story, ‘A2’:

#1 – An Unfamiliar Name: The first clever thing about ‘A2’ from a positioning sense is its name, that is, ‘A2’ milk. It’s unfamiliar. Now I know I’ve said in my book and elsewhere that the ‘familiar’ win, and that’s true. But when it comes to a name or a label, often the use of an ‘unfamiliar’ in the description of something that is generally very familiar (e.g. milk) helps it to stand out. It ‘interrupts’ your thinking – when you see it for the first time you say, “What’s ‘A2’?”. That’s the first step in engaging someone.

How can you incorporate something interesting and a little unfamiliar to grab people’s attention?

HOT TIP: Here’s one way, change the term “Free Appraisal” which is very familiar and boring, you can do that by adding in an adjective. If you do, you better make sure you are offering something different to all the other agents who offer “Free Appraisals”. You’ll create more problems for yourself if you get people all hot and excited about your offer when they discover it’s the same old thing all other agents are doing.

#2 – Story: There’s a story behind ‘A2’ milk and it’s a pretty interesting one. As it turns out there’s this protein in some milk that originates from only some cows. ‘A2’ cows in fact. This protein is really good for you apparently. And to find the right cows that produce the ‘A2’ protein milk, cows undergo a DNA test, that’s right, all very CSI, haha. It’s this story that delivers on the promise of the ‘unfamiliar name’. The story engages the consumer. Tells them it really is different than all the other milk brands on offer.

What’s your unique story that makes you different from all the other agents?

HOT TIP: Come up with a 10 Point USP (‘unique selling proposition’). It doesn’t matter if several of your USP items are the same as others; you just need 3 or 4 that no one else is doing in your area, then claim them as your unique points of different and tell the world about it.

#3 – Controversy: A2′ milk stands out for another reason other than just the promise of a healthy protein. ‘A2’ have brought to our attention that the other protein that’s found in all other dairy milk products, that being ‘A1’ may be really bad for us. This is how they separate themselves from all other milk products. It’s controversial. It’s riled the likes of Dairy Australia, the peak industry body. They say the science is insufficient (and the consumers who buy ‘A2’ cynically think of course Dairy Australia would say that). ‘A2’ can’t lose. Doesn’t matter what their opposition throw at them, the more they try to undermine the ‘A2’ story, the more support ‘A2’ receives.

How can you be a little controversial?

HOT TIP: The easiest way is to know your ‘BIG Why’. When you know your ‘BIG Why’ it’s easy to make a stand for something. When you make a stand for something, there will be people in your marketplace that will support you and choose your side. That’s what we humans do. We like to choose the side we’re on.

WARNING: don’t be controversial just for the sake of standing out. That’ll back fire on you. You must only be controversial if it matches your ‘BIG Why’ and specifically your beliefs/cause/purpose/mission.

#4 – Consistency: ‘A2’ is going to great lengths via DNA testing to ensure the purity of their product. This aspect of their story alone is super powerful. In the minds of their consumers it provides certainty. They can feel confident that every bottle of ‘A2’ they buy has actually come from ‘A2’ cows. ‘A2’s consistent approach to testing creates certainty in the minds of their consumers and it’s this certainty that has built trust and loyalty.

How can you construct a system for doing what you do so that you’re consistent and so that your marketplace can feel confident you’ll deliver every time?

HOT TIP: Create your own ‘signature sales system’. It may well be auction. Or it could be private treaty. Doesn’t matter. Just break it down into steps. Explain what those steps are and help people see that your system is bullet proof and consistent.

The bottom line is, when you see yourself as a product, you can start packaging yourself up so that you stand out.

My final word on this is, and even though I’ve already said it, it’s worth reiterating… what ever you do follow your ‘BIG Why’ and be authentic with all of this.

Authentic agents win!

Real Estate Market Due for a Correction?

There is a lot of speculation and fear about the bubble in the marketplace. While bubble concerns are visible in some marketplaces in the US and perhaps Vancouver, is there a cause for concern for the rest of Canada?

The Normal Market

Similar to the stock market, real estate market also has a cycle. First, there is the annual cycle of certain months being slower months than others – winter is slow time, summer is usually more active time for buyers and sellers. Second, demand & supply, interest rates will cause occasional adjustments in the marketplace.

It is important to note that a “Bubble” is not part of the normal market cycle. It is an artificial rise in demand – which is unjustified by fundamentals usually fueled by speculation, misinformation and greed.

What is a Bubble?

In the dot com era, technology stocks were trading at extremely high price-earning ratios, which were not supported by market fundamentals – that is, the stock valuation had a weak correlation to the profitability of the company; rather it was based on expectation (speculation). People expected dot com companies to be the waive of the future and were willing to finance it, these companies had no real income or collateral to back up the equity loans they were taking out. While some dot com companies made it big, like Amazon and Google, the vast majority failed. The technology bubble burst due to one simple reason, all of these companies came out at the same time causing an excess of supply with no corresponding rise in demand for the products it offered. Buying and trading was being done almost solely on dreams of future cash. That is the basis of almost all, if not all, “bubbles”.

What about Real Estate Bubble?

In contrast, real estate is a basic need – everyone needs a place to stay. It has a finite supply – land is scarce since no one is making anymore of it. In addition, artificial barriers introduced by government (greenbelt, conservation land, farm land) cause land to be even more scarce and push the demand up for other available land for development purposes.

Population is on the rise largely due to immigration, demand is boosted for real estate around business hubs (like Toronto, Vancouver, Edmonton, Montreal). Since land is more expensive in these areas, developers will likely address the higher density issue by building up (high rise condos) in these areas. And since the vast majority of people prefer a single family home and builder’s are expected to build less of it in these areas, these types of homes will also see a rise in price.

To sum up so far, a bubble is fueled by artificial demand unjustified by fundamentals (normal supply and demand) – people begin to buy and sell based purely on speculation with no current market justifications for the higher demand. Real estate has a consistent rising demand and a limited supply which is unexpected to change anytime soon.

It’s all up for Real Estate?

Does this mean that the housing prices will not fall, absolutely not. As part of normal real estate cycle, prices will occasionally adjust to reflect the current supply and demand situation of the market.

Let’s first look at the crash of the 90’s to see if similar fundamentals are visible in today’s market place.

Crash of the 90’s

Over 30% of the people buying in the Toronto area in the 90’s were investors, with consistently rising interest rates, these investors could no longer afford the financing costs which caused them to either sell or be foreclosed on by the banks, which caused an excess supply of properties (especially condos) in the marketplace; the excess supply caused the prices to fall. The falling in prices caused investors who had crystallized their losses recently to stay away from the market place (further lowering demand). And end buyers noticed the falling trend and decided to wait a little longer hoping that the property values would drop further and properties could be picked up for a bargain. This waiting game lasted years.

Last year, only 19% of the condos in Toronto were rental units (according to CMHC’s Housing Market Outlook from the second half of 2005) and vacancy rates are dropping. This is because more people are buying for themselves and not on speculation. So even if the rental markets slowed and vacancy rates started to rise, the real estate market is not likely to be flooded like they were in the early 90’s.


A major factor that caused the adjustment in the early 90’s was the interest rates. In May of 1990 the interest rates were a whopping 14.21% (according it CMHC), making mortgage payments $11.89 for every thousand dollars of your mortgage. This would make a $400,000 mortgage cost $4,755.97 per month. You can currently get a 5-year mortgage at a rate of about 5.25% or $5.96 per thousand dollars on your mortgage. This means that a $400,000 mortgage today will cost you $2,383.67 per month. That means that the effective cost of owning a house is half the amount that you would pay back in 1990 and yet the average price is only 5%-10% higher now than it was in 1989.


The adjustment in the early 1990s was a response to too many speculators and excessively high interest rates. In the late 90s and until now there has been another adjustment to account for the housing markets being under valued in the 90s and consumer attitudes changing to acknowledge that homes were affordable again. Now as prices are starting to reach a level where affordable houses are affordable, we are likely to see prices moderate with slower increases in price and the occasional peaks and valleys that represent a normal market.