RISMEDIA, April 28, 2009-Over the last 12 months or so, many real estate agents have been forced to reinvent their businesses. Many real estate agents understand the need to change, but don’t know where to start or how to do it. This article will show you how to quickly reinvent your business around the best home sale opportunities in your marketplace.
To start, you must find the money in your market, which means you need to study demand. Most small businesses don’t study demand. They have an idea for a product or service and then run out and create it, and once the product is created, they attempt to sell it. This process is completely backwards and is one of the reasons why many new businesses fail.
Instead, you should try and sell the product or service first. If it sells, then work your tail off to build or create what you’ve sold. Don’t spend months creating something that may or may not sell. Short-cut the process by selling it first, and then follow the money.
The same holds true for you in your real estate sales business. Don’t decide to specialize in a certain market or segment of the market without studying the demand. One agent, in Ohio, told me they wanted to specialize in selling homes priced $400,000 to $800,000. Their reasoning was that they would make more commissions from a smaller number of home sales, which makes sense on the surface.
However, this agent should stop and make sure there is money in this segment of the market before moving forward. My research shows that this price point is probably the worst segment of the market to specialize in right now. Homes in this price range are not selling as the demand for these homes has all but disappeared.
Think about what would happen to this agent if they continued on with this market segment.
They would spend hours writing new advertisements to attract buyers and sellers. They would secure a few listings and then spend more money advertising these homes. They spend hours hosting open houses and broker opens. Months later, these homes wouldn’t sell and this agent would be frustrated and broke. To be successful today, you must study the demand in your market. Spend some time researching the following:
1. What types of homes are selling today?
2. What price ranges are most homes sold in?
3. What specific areas are these homes being sold in?
4. What types of homes are actually selling?
5. Who is buying these homes?
6. What agents are listing or selling these homes?
7. What are these agents doing to get clients?
Your MLS is a fantastic tool that can be used to research your market and study demand. Within an hour, you should be able to see what is selling and what isn’t. Don’t pay attention to homes listed for sale. Focus on sold properties, and study each one. See if you can spot any commonalities.
For example, right now foreclosures are what are selling. It’s been estimated that about 45% of sales in recent months have been foreclosed homes. This means that’s where the demand is. And if listing opportunities for REO properties are limited in your market, what about opportunities on the buyers side? Wouldn’t there be a demand from buyers for foreclosed homes?
Once you find this sort of demand, quickly engineer your business around this opportunity. This type of property or market segment might not be where you want to focus, but if you want to be successful, you don’t have a choice. You must follow the money. Otherwise, you’ll be fighting a losing battle.
Rob Minton reinvented his real estate sales business to sell 269 homes to a limited number of clients in one year and has written a very practical book on how real estate agents can sell more homes by representing foreclosure buyers.
For more information, visit www.foreclosurenaire.com.