Are you in the right marketplace to make money?Jul 18, 2022
Top agents have absolute clarity on their marketplace, and they are passionate about it!!
- They know each street and property within their marketplace.
- They know how much property their marketplace turns over per year.
- They have crystal clear clarity on exactly which listings fit in with their own personal business model and goals. They know how to communicate with the local potential sellers within that marketplace to ensure that they have the opportunity to appraise and list the property for sale.
- They have a deep understanding of the buying dynamic and buyer needs in their marketplace and can communicate with this group in a manner that ensures their properties sell faster and at the best market price.
- They know how to price correctly and sell efficiently.
Top agents know exactly how many properties a year is reasonable for them to sell within their local marketplace.
Top agents communicate consistently with their marketplace of potential sellers.
A top agent is known locally as a leading local real estate agent and as a local property market expert.
So, let’s now look at HOW? How do we position ourselves to have the same clarity, effectiveness, and dominance within our local marketplace?
Step 1: THE MINDSET SHIFT
Realise a mental shift is required. Top agents run their real estate career like a business.
If you are a real estate agent with a drive to consistently sell 50 properties each and every year (maybe 40 or even 30 sounds right for you; personally, my target every year is to sell 50 properties). Regardless of the number, I know you are a driven real estate agent, otherwise you would not have made it this far in the article. So, if you have made it this far and you’re still interested in hearing more on how to become a leading local real estate agent in your marketplace, then my friend, you now have to realise you are more than a driven real estate agent. You are a business person… you run a small business
Let me repeat that: You. Run. A. Business
In order to successfully sell 50 (40 or 30) properties a year, consistently, each and every year, successfully selling & settling each property, then the very first thing you must do is fine tune your mind to the fact that - You. Run. A. Business!
The Business of - YOUR NAME Real Estate.
Regardless of whether you already work under your own boutique real estate agency or under a leading property name, make no mistake, people buy people. Your clients list their properties for sale with YOU! Your buyers buy their properties from YOU!
You are running the business of YOUR NAME Real Estate.
This is a critical viewpoint!
So, with this clarity of perspective, let’s look at step 2…
Step 2: ARE YOU IN THE RIGHT PLACE?
Are you even in the right place?
Why are you in the marketplace you are in?
Is it because your office is situated there?
Did you fall out of the real estate reps’ course into an office and some manager of sorts said “I know, you should sell in this suburb!?”
Did you decide, because you live in a particular suburb, you know the properties and area – so it makes sense you should sell there?
Did you look at the $2 million-dollar mansions and decide, well this must be the place to make it as an elite real estate agent?
All of these reasons or events that have led you to choose a particular marketplace make a sort of sense and are understandable, however, what we need to do now is step back and actually assess and consider that marketplace for opportunity, potential and growth.
In the simplest form of the question…
Are you currently conducting business in a marketplace where it is sustainable for you to consistently sell 50 (40 or even 30) properties within a 12-month period?
Master sales agent, international speaker and sales author Brian Tracey wrote in an article on entrepreneur.com
“To succeed as an entrepreneur, you must develop the ability to select and offer the right products or services to your customers in a competitive market. More than any other factor, your ability to make this choice will determine your success or failure.”
Let’s fine tune this statement a little.
To succeed as a *LEADING LOCAL REAL ESTATE AGENT* you must develop the ability to select and offer the right products or services. *THAT’S YOU! To your customers, in a competitive market, YOU ARE THE RIGHT PRODUCT/SERVICE. *
*This is the question - ARE YOU IN THE RIGHT COMPETITIVE MARKET? *.
More than any other factor, your ability to make this choice will determine your success or failure.
So, let us revert to our question …
Are you in the right place?
Are you on the right ladder?
Well to answer that, let’s first consider what an active marketplace looks like…
First and foremost: The marketplace must be big enough & active enough.
“One of the most crucial tasks an entrepreneur has is to calculate the size of their market, and the potential value that market has for their start-up business.” Forbes Sept 2019
Let’s fine tune this statement a little
One of the most crucial tasks a *local real estate agent * has is to calculate the size of their market and the potential value that market has for their *(own personal) *real estate* business.
When I started out in real-estate, I was told by my then manager, who had been in the game for close on 40 years, that 2000 houses were enough for any one rep to handle.
There is an element of truth in this - here is why
- You should know every property in your patch.
- You should know everything that is sold and everything that is listed.
- You should be able to afford to consistently market to this number of houses.
- You should be an absolute expert on the market as it pertains to your patch of houses.
Here is what I now know
- There are a couple of other critical factors which need to be considered
- The market needs to be moving. In my 10 years’ experience in the property business, I have observed that A MINIMUM of at least 5% of a market needs to be actively turning over, on a consistent basis, to be considered a market suitable to grow an active real estate career where you can consistently sell 50 properties a year.
- That would mean that if I consider a group of 2000 houses, I would need to be selling 50% of the selling stock, on a consistent basis, in order to be turning over 50 properties a year. Although this is certainly not impossible it is too high of a percentage to build a solid business plan around.
If we look at the business term Dominance in economic terms
Market dominance is a measure of the strength of a brand, product, service or firm, relative to competitive offerings, exemplified by controlling a large proportion of the power in a particular market.
There are several ways of measuring market dominance. The most direct is market share.
A company, brand, product, or service that has a combined market share exceeding 60% most probably has market power and market dominance.
A market share of over 35% but less than 60%, held by one brand, product or service, is an indicator of market strength but not necessarily dominance. Wikipedia Monopoly (economics)
So, taking our above example; You would need to be selling 50% of the stock consistently yourself, meaning you would need to enter, or currently be in, a market where you are, or enter as, the market leader. This makes absolutely zero business sense.
You need to enter, or be part of, a marketplace where you can be consistently turning over 25% of the market share. That marketplace should be small enough to consistently, and by consistently, I mean weekly, market to. It should also be small enough for you to know every single property in it. You should know everything that is sold and everything that is selling. It should be a marketplace that you can become an expert in. In my experience, you need a marketplace of around 4000 houses, at a minimum, turning over 5% of its market annually, i.e., 200 properties successfully selling and settling per year.
A note on spreading yourself too thin over too large a marketplace.
If your marketplace is too large, and really anything over 4000 for any one rep starts to become too large, you are likely to encounter the following issues
- It simply becomes too expensive to market to the marketplace on a consistent basis.
- It’s very difficult to become a dominate rep in a very large marketplace, meaning you are constantly diluting your market share and weakening your presence as the local expert.
The key is to become the most dominant agent of your area. Ideally you want to become the go-to agent for local property needs.
Your marketplace is a space that needs to be owned and maintained if you are to consistently sell 50 properties every 12 months. When done correctly, you can achieve this without reaching sales burnout and while enjoying the lifestyle, freedom and abundance a successful real estate career can offer you.
OK – BUT IT’S MORE THAN JUST A NUMBERS GAME - YOU GOTTA’ HAVE AN INTEREST IN THAT MARKET!!!!!!!
This is crucial, you actually have to have an interest in your marketplace and that interest needs to be enough that it will grow into a passion!
- Passion helps intensify focus
- It enables creativity and innovation
- Passion for work enhances the desire to pursue excellence
- Passion brings energy at work
- You feel more satisfied and less stressed
- You enjoy what you are doing
- Passion helps build a positive attitude towards work
- The energy passion brings will keep burnout away
“Pleasure in the job puts perfection in the work.” – Aristotle
So, when researching your marketplace, …
- First and foremost, you want to know is the marketplace active enough.
- Secondly, are you interested in the marketplace?
- That interest can look like many things
- You love beach lifestyle
- You love high-end city living
- You love being a key member of a local tight knit community
- You love development
- The people there feel like home to you
- You love the style of buildings
- You love high-end Mansion style living
- It means you know deep in your soul WHY people buy property in that area and you can completely relate to your clients - both buyers & sellers
According to Richard Branson: “There is no greater thing you can do with your life and your work than follow your passions in a way that serves the world and you.”
Let’s refine Richard Branson’s statement a little - “There is no greater thing you can do for your real estate career and your work within it, than to follow your passions in a way that serves your community and you.”
As Steve Jobs famously said, “The only way to do great work is to love what you do.”
I have created a worksheet that will help you gain absolute clarity around the question; Are you in the right marketplace to allow you to build a fulfilling, successful and financially abundant career in Real Estate?
Once you have gathered this key information you will be able to make a sound business decision as to where is the best marketplace for you. That is, the best marketplace to form, grow and build your real estate business so you can consistently sell 50 (40 or 30) properties a year, without reaching sales burnout, and while enjoying the lifestyle, freedom & abundance a successful career in real estate can offer you.
There is a bit of work in this worksheet. However, you are better spending a couple of days focused on this, than you are spending months maybe more, in the wrong marketplace