Knowing Your Market
One major way that top producers distinguish themselves from other agents is through their complete mastery of their real estate market, and Rick O’Connor of Realty Executives Cornerstone said that thorough market research is the essential first step to high sales volume – and it’s not particularly difficult to obtain such information.
“The first thing you need to do is study the market and the market trends in the area you work in,” says O’Connor, who, with a total volume of $12.91 million in 2012, was McHenry County’s No. 2 agent. “The access and availability of that information is very readily available through NAR and even our local MLS.”
It’s a basic tool in any agent’s workshop, but as O’Connor explains, an essential one. Through analyzing data from MRED, Fannie Mae, Freddie Mac and even JPMorgan Chase and other lenders, agents can effectively gauge what kinds of properties are selling (their characteristics, amenities, etc.), what prices they are selling at and what areas of what neighborhoods appear to be attracting the most buyers.
Such analysis, O’Connor says, allows agents to see the “real market,” and he recently dealt with a transaction that showed how valuable that information can be. The clients, a couple living in Woodstock, had not sold a home in more than 20 years, and because of their inaction, they were out of touch with how the Woodstock market had developed in the past decade.
“The homeowners were very surprised, but also very pleased with the wealth of information,” he says. “We listed the home for $219,900, and sold the home within 60 days of listing for $210,000, in cash, to a transferee from out of state. Needless to say, I now have another client for life who will refer us to many more clients.”
Interestingly, market research is so important to the business of Tim Salm, an agent with Jameson Sotheby’s International Realty in Chicago, that he’ll even refuse listings, should the potential clients not accept his findings.
“I will give the seller a pretty tight range, based on whether they want to be aggressive [with their pricing] or more at market level,” says Salm, who was the no. 13 agent in all of Chicagoland in 2012 with a total volume of $49.86 million. “If they try and push it above the range, most times I won’t take the listing, because I’ve learned over time that it’s just not worth it.”
Home prices and amenities, though, are not the only statistics that top producers collect for their listings. Andee Hausman, the owner of RE/MAX Experts in Buffalo Grove, is one of the top 100 RE/MAX agents in the U.S., and in her market analysis, she studies a most unorthodox source – biology.
While conducting research of U.S. population trends, Hausman found that starting in 1973, the U.S. birth rate fell. First-time homebuyers, on average, buy their first home when they are 33. Thus, when 2006 arrived, and the market began slowing down, those children of 1973 were entering their prime buying period for their first home – yet, as previously stated, there were less of those first-time homebuyers around; however, birth rates picked back up in 1978, and when those homebuyers came of age in 2011, she began seeing a pick-up in demand. Such analysis, Hausman says, helps her with clients.
“I show this to homebuyers so they know that the market is, in fact, improving,” she says. “It’s biology.”
Knowing your market, though, extends far beyond statistical analysis. Dawn McKenna, a Realtor with Coldwell Banker Residential Brokerage in Hinsdale who was Chicagoland’s No. 18 agent in 2012 with $40.92 million in total volume, says she also thoroughly researches the human aspects of her market. From Hinsdale’s top schools, to its best restaurants, to its best dog parks, McKenna says she always provides such information when dealing with clients.
“They want to know everything about a listing, but also the neighborhood,” McKenna says. “What [are] the best schools, social clubs and local attractions? I can provide that information to them. You’ve got to be able to speak to your clients on all levels.”