“Quick money within a short amount of time is the main reason why many people want to become real estate agents,” says Ginny Nguyen, residential sales manager at Savills Vietnam based in Saigon.
In 2017, there were less than ten major real estate agencies with sales agents in Vietnam. Within 3 years, hundreds have emerged and the number of real estate agents in the country increased 15%. Eventually, in 2019, there were about 300,000 agents, according to Tiền Phong.
Money, networking events, and connections are the three main factors that have made being a real estate agent in Vietnam a dream job. However, the Covid-19 pandemic has woken many up as real estate is no longer a gold rush for sales agents.
That’s except for Ginny, whom I reached out to in order to find out why she’s still hanging in there.
“The charm of the money is real, but you have to earn it by trading an equal amount of value in return, say, with better service. Otherwise, how can you compete with thousands of agents out there who sell the same thing?” Ginny explains.
That’s true. About four years ago, there were only about ten developments in the city that sales agents promoted to clients, such as Vinhomes Golden River, Sunwah Pearl, Diamond Island, and Empire City. The competition was much less intense. A sales agent in Saigon could easily sell three to four apartments per month if there was enough stock.
The basic salary of a full-time realtor is from VND5,000,000-VND10,000,000 (~USD 219.70-USD439.40), which is not enough to lead a comfortable life in Vietnam’s biggest city. It’s the commission, however, that motivates agents to sweat blood to sell properties.
The amount of commission that a sales agent receives, according to my observations, can amount to 3% of the price of an apartment. For example, for a USD500,000 apartment, an agent can earn up to USD15,000 before tax. Meanwhile, the average salary in Vietnam is around USD700 per month. You do the math and see why so many people these days are interested in joining the real estate market.
However, things have changed in the past few years. The market has become too crowded for comfort and the fierce competition is making it harder to sell.
2 years and a half into this job and 3 months into movement restrictions, Ginny admits that selling properties in Vietnam is becoming increasingly challenging. However, this business management graduate has no intention of quitting her job for a less stressful one with stable income.
“I don’t think that I can do anything else but real estate. I had been passionate about real estate before I started working in it, so this is like a divine calling for me. I won’t switch to sales administration or customer service either. I want a challenge and those jobs can’t give me that,” she says.
At this point, I have to pause for a moment as a famous saying pops up in my mind, “Be careful what you wish for.”
If what Ginny asks for in her career is a challenge, the Covid-19 pandemic is here to test her commitment.
Image credit: Saigon Viewers
Contrary to popular belief, including mine, that the real estate market is basically dead due to the pandemic, its activities are still running.
“The whole real estate market is switching from offline to online and everyone’s adapting to it very quickly. New project training takes place about three times a week,” Ginny throws light on the activities going on in property agencies to keep the wheels turning.
Amid local restrictions, she takes a softer approach with her job as a realtor: “I normally ask my existing clients how they’re doing first, then I share what is going on in the market with them, and lastly, new projects if they show interest. I believe in building relationships with clients. They’ll buy when they’re ready. The market is slowing down and this is not the right time to pitch or push,” she explains.
Selling new projects is hard, for sure, but resolving existing problems that struggling current investors face is no less challenging. For those who have bought properties to let, prolonged restrictions mean extended vacancies and no returns. Real estate agents are usually the ones who help investors find new buyers or tenants for their properties, but those activities are impossible now.
This is understandably making property owners anxious. “Some of my overseas clients have problems with their finances as their businesses are also in trouble, given that the Covid-19 pandemic is a global issue now,” Ginny explains.
“Vietnam’s borders are still closed and there’s no way my clients can fly here to receive their apartments. And yet, some developers still require them to pay the remaining 45% of the purchasing price for the handover. This is what concerns my clients and they want assistance from the developers,” Ginny explains the situation where her clients are unable to complete their payments in full for now.
When a client tells an agent that they need help from the property developer, it means that the agent will be the one negotiating the terms of a purchase on the client’s behalf and doing all the grunt work. However, throughout this process, the agent doesn’t receive any fees from the client from the beginning till the end, from consultation until handover.
This is because in Vietnam, clients don’t pay real estate agents, the developers do. A sales agent sells and receives commissions from the developer within a few months of the transaction, and that’s the end of the story. So for agents like Ginny, especially when clients’ payments are delayed, they receive commissions late. Sometimes, they don’t receive anything.
For example, if a client has bought an apartment and their sales agent has received their commissions and suddenly exited, the agency will have to assign another sales agent to support this client.
In such a case as this, which is pretty common, the second agent in charge doesn’t receive anything.
She shrugs and replies in a matter-of-fact tone, “I just feel very happy when I can help a client solve a problem.”
Whether I believe her statement or not doesn’t matter at this point. Clients who have tied a large sum of their savings in properties in Vietnam need agents like her. In the time when thousands of real estate agents have exited and remaining agents’ income is reduced to their savings and salaries, this kind of customer-first attitude is inspiring.
She goes on to illustrate her point, “Besides, clients always have options. If you don’t give them your best, you won’t last long in the real estate market because it’s extremely competitive.”
Based on what I’ve been reading on the Internet and Ginny’s sharing, the market is bleak and the payment schemes are not in many clients’ favor. If things are no longer favorable for overseas investors, are they still interested in buying properties in Vietnam?
“Yes, we’re still receiving enquiries from clients, locally and overseas as well,” she says.
As someone who reads market research very often, I can’t help but take this statement with a grain of salt.
Many real estate agencies in Vietnam have published research painting pictures of the local market that are too rosy to be true. Most of their overly bullish forecasts are based on theoretical clichés such as trade agreements, steady GDP, and the upcoming metro. As an outsider, I am looking for relatable, convincing reasons in layman terms about why people are still interested in buying properties.
“We have noticed a surge in demand for larger properties among local buyers. Since Covid-19 will not disappear any time soon, and work-from-home will very likely continue in the long run, people need a more roomy, comfortable space to deal with longer indoor days. A number of people, especially those with kids, have expressed their interest in finding a bigger space to live.” she explains.
“Plus, some people have asked me about landed properties, such as villas and townhouses, in places that are further from the city center such as Thủ Đức, Bình Dương, and Đồng Nai. The Covid-19 restrictions have taught many about the advantage of living in a landed house. It’s easier for you to move around, order delivery to your door, and above all, a landed home gives you more space and flexibility to plant your own garden.”
Gardens are not just for show, but also for survival. Ginny explains, “The scarcity of fresh produce and meat plus the challenge of ordering groceries online have made home gardening the trend of the new normal. The people who struggle the least these days are gardeners, who have vegetables in their own home and will not fear not having anything to eat. People are becoming more practical now, realizing that a self-sustaining home is the next move.”
What about overseas investors, who’re unable to enjoy their gardens in Vietnam, let alone property? Ginny explains,
“Some investors from Singapore and Hong Kong are still interested in buying, mainly because the housing options in Vietnam are still affordable. I agree that the housing price in Vietnam has increased and therefore the rental returns are no longer as high as before, but you should compare the yields here with those in Singapore, Thailand, and Hong Kong. Private housing prices in Singapore and Thailand have risen sharply recently. Buy-to-let investors look around the region and find Vietnam still more affordable.”
At the end of the day, Ginny remains confident about the market.
“The city is easing restrictions, slowly but surely, and it’s a good sign. One day, people will return to this city, and I’m talking about millions of people. The housing demands will always be there. The market will regain steam,” she explains.
We switch to the lighter points, talking about her daily life as a work-from-home sales agent.
There’s no such thing as a typical, fixed work day for a full-time realtor, and that’s probably the only thing that the Covid-19 pandemic hasn’t changed.
“Problems keep arising and need dealing with immediately regardless of the hours. Meetings always happen at the last minute,” she adds.
Before the restrictions kicked in, weekends were usually the busiest days for real estate agents. They were usually when sales events took place, so realtors had to be there from dusk till dawn.
A sales event in Saigon
Now that these activities are no longer viable, she uses her extra time to advertise properties on listing sites, contact prospective buyers, reply to clients’ messages, and keep herself posted on market updates.
Here’s one thing you should know before dating or marrying real estate agents: they never leave their phones and you can’t expect their undivided attention. They are not cheating, they’re just busy texting clients.
Clients’ messages can arise at any time of the day, during lunch, dinner, and the wee hours even. Late-night messages usually come from investors living in different time zones, and they need to be dealt with immediately if the investors want to make purchases.
“I usually do a final check on emails and messages from clients at 10PM. After that, it’s time for myself,” she says, offering me a glimpse into her daily timetable.
As unpredictable as a real estate agent’s work schedule sounds, Ginny has managed to find a way to breeze through her tasks.
“I list out three to four important tasks to focus on and spend only 25 minutes on each. I’ll take a 5-minute break and return to it. I’ll keep doing that until the task is done, so that I won’t feel exhausted and distracted.”
I agree that continuous training, meetings, and daily workload are essential to helping real estate agents keep themselves busy and reminding them that they are still in the profession. However, I wonder if they get paid for their work, given that a large part of their income comes in the form of sales commissions that are dwindling these days.
Besides, most agents have to pay for their own advertising fees, which are not cheap. One primetime property advertisement on a listing site costs VND1,000,000 (~USD43.94) on average. For better exposure, an agent will need to list at least 3 properties per week and it all boils down to who’s willing to spend more. Advertising expenses can eat up an agent’s salary and commissions quickly.
Passion is crucial, but not something one can solely live on at the end of the day.
“I’m fortunate enough to still receive a monthly salary from my company. For other sales agents, I think many have enough savings to tide over the pandemic,” she says.
I don’t know about other people, but I believe being a real estate agent is a job that requires team effort. You can be a wildly charismatic and skillful sales agent. But you won’t be able to close a deal smoothly without the support of an able team, who assist you in marketing, updating stocks 24/7, and doing paperwork.
With social distancing in place, is it hard to work as a team?
Ginny admits that her team is her rock these days.
“I have weekly meetings with my team every week. These online meetings are very important. They remind my colleagues that we’re still in this together, that we still have work to do, and we have to do it well even though we’re working from home,” she shares.
Burnout due to the prolonged crisis and changes has taken its toll, though. “Cabin fever is real. Besides, the slow progress and delays in so many aspects make me question myself sometimes,” she expresses her vulnerable side. “However, there are many out there who are being hit harder than me, so I don’t think I have the right to be pessimistic.”
To keep her spirits up, she turns to TV. “I binge-watch the show Million Dollar Listing New York daily and I’ve learned so much from the real estate agents in the show,” she shares. “Besides, I also do yoga daily and read books to put my mind in the right perspective.”
It’s all over the Internet now: we’re only days away from easing restrictions in many districts and that’ll be the beginning of a new era for us.
However, social distancing restrictions might continue for a longer while and it will take more time for the real estate market to pick up steam and fully reopen.
Nonetheless, it’s good to know that marketing and training activities are still going on behind closed doors of some real estate agencies to keep the wheels turning.
With every crisis comes opportunity, and the Covid-19 pandemic has changed the way many buyers, sellers, and realtors see the market now. For a city as big and ever-growing as Saigon, housing demand won’t go away, but instead evolve.
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Cover image adapted from: The Smart Local Vietnam
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