There are a lot of people who either feel positive or negative about the real estate market right now based on the various reports and statistics that get out into the public in so many different ways. Good or bad, to the consumer, it all translates into instability. There is no one direction the market is headed that is agreed upon by everyone.
Real estate, like the weather, cannot tell you much about your local market based on national averages. Real estate is local, and you need to have local knowledge, just as you need to know your local weather. The opportunity for real estate professionals is to be the source for that local knowledge.
As a real estate professional, this is an opportunity to be the local expert and to know what the real story is in the market. It’s having the ability to know the data nationally and internationally and being able to explain why it is relevant to what’s happening in the local market or not.
At Engel & Völkers, we have a License Partner Training program in which we work with individual brokers to take a deep dive into their markets. The first step on this path is to define their markets. We start with the general marketplace of the brokerage and then we divide it into submarkets, each represented by an agent who will develop his/her submarket.
Then we take a close look into their MLS and national and local REALTOR® association data to find out what is really going on in their marketplace and how it compares with the national scene. We look at the average sales price, the number of homes sold over the past year, the types of properties and the seasonality. We operate under the rule that if you don’t know your numbers, you don’t know your business.
While this has been known as farming, we call it “submarket specialization,” and it’s a strategy we apply in markets worldwide. To become a market expert, we ask that the agent gain the in-depth knowledge required to truly be an expert. We promote a culture in which agents, whom we call advisors, are expected to remain knowledgeable of not just the real estate market activity, but of all the reasons why people live where they live. It’s knowing about the best new restaurants, new developments, the school system and the history, and developing the network that will be part of the exceptional, white-glove service that defines our brand.
Once the markets are defined and the experts are in place, we move toward developing a business plan based on the data we’ve uncovered in the initial research. We work together to create specific business goals and identify the steps it takes to achieve them. Of course, the first is having the agents who can accurately explain the realities of the local market and their perception of the market based on what they’ve heard nationally, in addition to the local market conditions. From there, it’s about providing the services and strategies to help them achieve their real estate goals.
Tom Kunz is executive vice president, Engel & Völkers Real Estate USA.
For more information, visit www.evusa.com.