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The Crucial Role of Real Estate Agents in Supporting the Local Economy

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Stereotypes can limit your brand

Real Estate Agents (REA’s) are commonly maligned in pop culture. They are often viewed as being exclusively sales focused and indeed, sometimes, can live down to this stereotype.

However, the idea that REA’s are only interested in selling is simplistic. The reality is that consciously or otherwise, as business entities they are vital contributors to their local economy.

Real Estate Agents who transact locally, play a valuable role in the employment of nearby residents, the success of the local supply chain, and the support of local sporting and community groups.

Studies show that shopping locally delivers significant economic benefits, as illustrated in this US-based study below. Figure 1 below.

Andersonville Economic Study
Figure-1-Andersonville-Study

Local Transactions as Leverage

Australian studies show similar figures. ‘Locals4Locals’ an Australian Not for Profit organisation states that for every $100 spent at a local business, rather than a multinational company, an average of $58 remains in the community. Local businesses keep their profits within the community and purchase from other nearby sources, delivering a powerful multiplier effect that stimulates the economy.

A recent study by Maroondah City Council found that for each new person employed in a local business, the increased consumption and demand for services could result in additional employment in other sectors of the economy. For example, for every ten people employed in professional services, 10 jobs could be created in other local businesses.

Shopping locally benefits the sustainability of the neighbourhood, encourages resident engagement, and builds loyal long-term relationships. It also indirectly boosts tourism, because unique businesses enhance the character of a suburb or town. Travellers are more likely to visit localities that feature a diverse range of enterprises.

Local businesses are Australia’s largest employers. They specialise in services that are valued by the community, their stock is often of superior quality, they hire staff with relevant expertise, and the owners are usually easy to contact, this all leads to improved customer satisfaction.

These Business Owners remain committed to the community’s welfare and prosperity, and they’re usually the most generous contributors to community fundraising events and charities. In towns and suburbs across Australia, one of the most prominent businesses is the local Real Estate Agency.

The Economic role of Real Estate Agents

Helping residents to buy and sell their homes is a key role for REAs, but it’s not the only one. Many agents across Australia are also proud to get behind local schools, sporting groups and clubs, by offering funding to assist with equipment, training, and administration costs.

Real Estate Agents have a strong local knowledge and a deep commitment to the success of the neighbourhood. Local charities and sporting groups often rely on their sponsorship to survive.

Furthermore, these agencies either purchase for themselves or facilitate on behalf of others a wide range of goods and services from local businesses. Some of these items are listed below.

  • Vehicle hire or purchase
  • Computer equipment
  • Mobile phones
  • Printing services (brochures and signboards)
  • Trades and related compliance services
  • Photography and videography
  • Office Uniforms
  • Breakfast, lunch and coffee
  • By buying locally, these agencies are helping to drive their local economy.

Michael Shuman, a globally recognised expert on community economics has authored 20 studies on local procurement. Shuman has analysed the impact to communities when local industries expand and discovered that even a modest increase generates a large number of jobs. 

Shuman is also an advocate of anchor institutions in ‘Buy Local’ strategies. These are organisations that incorporate economic development into their business strategy. When companies do this, it can lead to dramatic improvements in the local economy.

In many ways, Real Estate Agents act as anchor institutions within their communities. Highly visible organisations with a strong community presence.

Gauging my Local Economic Impact

How do you gauge your effectiveness? The points below offer a quick checklist.

  • As a Director am I on 1st name basis with the Business Owners we rely on?
  • Are my staff using local businesses or are they dealing with companies at a distance?
  • Do our preferred Suppliers hire staff that live, rent, buy and sell in our area?
  • Do they employ a stable workforce and is there long-term relationship available?
  • Have I discussed with them the value of #buyinglocal as a growth strategy?

Conclusion

Too frequently, Directors of Real Estate Agencies are unaware of the contribution their business makes to the local economy. Armed with this knowledge, they can get on the front foot, engage their market in a broader conversation and more accurately market themselves as an economic agent for change.

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