Real estate marketing firms in Vancouver are turning to creative strategies and tech to help them survive a weak presale environment amid industry layoffs, delayed commissions and buyer hesitation.<\/p>\n
Marketers aren\u2019t just trying to do more with less using AI, social media and predictive analytics. Some are diversifying their businesses, and experimenting with tactics such as flash sales, and rental and buy-back guarantees.<\/p>\n
Other incentives include covering closing costs or strata fees, adjusting deposit structures and offering mortgage buydowns to snag a lower interest rate. Personalized emails and text messages are also proving effective at targeting and nurturing prospects.<\/p>\n
\u201cWe are having to innovate,\u201d said Cam Good, owner of Vancouver-based KEY Marketing.<\/p>\n
\u201cAt times like this when you\u2019re challenged, you\u2019ve got to rethink everything. We have decided to go where the market is, rather than try to beat our head against the wall.\u201d<\/p>\n
For example, KEY is helping SkyLiving in Surrey get over the financing finish line. The project by Allure Ventures Inc. was recently revised from 449 condos to a mix of 207 market rentals and 215 condos.<\/p>\n
To boost presales, the developer is offering \u201cunprecedented\u201d rental and buy-back guarantees, Good said. For buyers who desire cash flow, the developer will lease the unit from them, find a tenant and guarantee rental income of 20% of the purchase price over 24 months.<\/p>\n
For buyers concerned about declining value, the developer will instead agree to buy back the unit upon completion at the full original purchase price. In either case, the developer will eat any shortfall.<\/p>\n
\u201cThat developer is willing to take some risk from the buyer upon themselves just to push that project over the line and get it built,\u201d Good said.<\/p>\n
In May, KEY organized a flash sale for another Surrey project, selling 63 homes at a 25% discount in one day for Belvedere by Square Nine Developments Inc.<\/p>\n
\u201cWhat we\u2019re being careful about, is just making sure the deal is real for buyers, because there\u2019s a lot of developers that want to offer a fake deal,\u201d Good said.<\/p>\n
Legit bulk sales create \u201ca very safe-feeling buying environment that buyers love,\u201d he said. It can also raise capital for developers to acquire new development sites at bargain prices.<\/p>\n
\u201cWhen it\u2019s a buyers\u2019 market for buyers, it\u2019s also a buyers\u2019 market for developers,\u201d he said.<\/p>\n
Hot on the heels of provincial densification mandates, KEY is also expanding into the multiplex sector, helping small-scale builders pre-sell units, complete projects faster and see their capital returned sooner and freed up for new construction.<\/p>\n
\u201cThe compounding effect for builders is profound,\u201d Good said.<\/p>\n
Tech Transforming Real Estate Marketing<\/strong><\/p>\n It\u2019s unclear whether such strategies will be enough to stanch the bleeding in Vancouver\u2019s presale market.<\/p>\n Adding to marketers\u2019 woes is the prevailing commission structure, which often sees them paid 50% of the commission \u201con firm\u201d and 50% when the buyer takes possession. The commissions can be between 1.5% and 2%t, but it often takes years to receive the second half.<\/p>\n This is forcing marketers to survive on these \u201cback ends\u201d from work done several years ago, and use this revenue toward overhead costs and expenses, Good said.<\/p>\n Fortunately, technology may be able to significantly cut costs and help marketers optimize their human and financial capital.<\/p>\n \u201cAI-driven tools and techniques, specifically as it relates to data and segmentation of audiences, is really something that stands out and can become very useful,\u201d said Alyssa Virani, vice-president of marketing and strategy with Vancouver-based Virani Real Estate Advisors.<\/p>\n The firm, which also has offices in Seattle, London and Beijing, uses predictive analytics to home in on potential buyers based on their age, demographics and stage in the purchasing process. The company has in-house technology enabling it to collect data that is \u201csuper relevant to the outcomes,\u201d she said.<\/p>\n \u201cCollecting data and inputting data is one thing, but actually interpreting it and making sure it\u2019s actually useful to us is another thing,\u201d she said.<\/p>\n Virani said that while AI can help accelerate content creation, it\u2019s not perfect and can lack authenticity.<\/p>\n \u201cIt\u2019s not 100% there yet, so it definitely needs a human touch still,\u201d she said.<\/p>\n Other marketers are more bullish on AI.<\/p>\n Marketing budgets are typically around five per cent of any project, but AI can bring this down to one per cent or less, said Sam Mehrbod, CEO of Roomvu Technologies Inc., which has offices in Vancouver and San Francisco.<\/p>\n \u201cWe use AI to create really authentic, hyper-local, hyper-personalized content that feels like it was just done by you,\u201d he said.<\/p>\n Citing recent layoffs at Rennie & Associates Realty Ltd. and other industry players, Mehrbod said that \u201cwhat you used to do in a month, you can do it in a day in terms of marketing a project.\u201d<\/p>\n He said as AI is increasingly incorporated into search results and social media, SEO and websites may become less effective than Instagram, LinkedIn and YouTube. Facebook, with its popularity among older adults, is another bonanza.<\/p>\n \u201cI think SEO is done. We\u2019re kind of over it now. You want to appear in people\u2019s phones as much as you can,\u201d he said.<\/p>\n Sunny Hahm, principal of Tandem Real Estate Strategy, said his team is also embracing AI as they shift their focus from volume to precision and become \u201ca lot more surgical\u201d in their approach.<\/p>\n \u201cWe\u2019re using [AI] to enhance targeting, content generation, lead-scoring and even predictive sales modeling,\u201d he said.<\/p>\n Vancouver-based Tandem is also mining its own internal database.<\/p>\n \u201cWe\u2019re trying our best to re-target our own database with very tailored and personalized email campaigns, as well as individual SMS text campaigns, so that we can be nurturing those prospects a lot more intently and more persistently,\u201d he said.<\/p>\n Ultimately, to respond to buyers\u2019 lack of urgency or certainty, Tandem aims to really understand buyer motivation, timelines and financial sensitivities. The goal is to \u201cdrill down\u201d on what matters most to buyers, whom he said are now primarily end users rather than investors.<\/p>\n \u201cIt\u2019s really grounded in the rationale aspect, and then following through with emotional storytelling,\u201d Hahm said.<\/p>\n Buyer Psychology Can Surprise<\/strong><\/p>\n Even with compelling and laser-focused marketing, it\u2019s unclear whether the prevailing buyers\u2019 market will actually translate into more sales.<\/p>\n KEY\u2019s Good said this is partly due to a feeling of safety in numbers.<\/p>\n \u201cIt\u2019s sort of counterintuitive. The buyers like to feel safe in a crowd. They like to line up, they like to see other people buying,\u201d he said.<\/p>\n \u201cBut in a buyers\u2019 market like we\u2019re in, generally they\u2019re alone. They walk into a sales centre by themselves. It feels creepy, and they don\u2019t buy. They shop around, they get overwhelmed with options and they just don\u2019t buy.\u201d<\/p>\n It\u2019s a \u201cshame\u201d because there are good deals to be had, he said.<\/p>\n Some marketers see the bear market as an opportunity to rejig themselves until the market rebounds.<\/p>\n \u201cAny economic slowness or any pivotal paradigm shift in the market, where the market has been resetting itself, opens up many doors for opportunities to be innovative and to be more creative, because we have to,\u201d said Tandem\u2019s Hahm.<\/p>\n \u201cThe conventional way of doing presale launches is sort of out the window right now,\u201d he said.<\/p>\n