Market expertise is one of the most important pieces of knowledge a real estate agent can possess. In the next three days, we will examine Being the Market Expert in separate ways: 1) How to become the market expert, 2) Explaining the market, and 3) Showing your expertise. Enjoy!
Let’s face it, as soon as they discover that you are a real estate agent, the question is always the same….. “How’s the market?” The stock (a.k.a. terrible) answer is “good, great, awesome, fantastic.” Perhaps a close examination of that response is needed. The real estate market consists of Buyers and Sellers. Those two groups, market-wise are on opposing ends of the “good, great” spectrum. Show me a market that’s “good, great, awesome, fantastic” for a Seller, and I will show you Buyers who might not see it that way.
So, how do we explain the market in a simple, yet effective manner that might also illustrate our command of market expertise? Answer: three steps.
1. Pick a number. I don’t care which, in fact, pick the one you find to be the most profound, accurate reflection of your market. It could be Sold Properties, Current Inventory, Average Sales Price, Days on Market, Sales to List Price ratio, Absorption rate. Any one will do. Now, give that consumer/interrogator the number. Then…..
2. Pick a number to put that number into context. You can tell me that the average sales price is $250,000. That’s a number. Unfortunately, that number pretty much tells me nothing UNLESS…. you give me another number. What was the average sales price last year? Is that $250K up or down and by how much? Maybe a percentage works here. “The average sales price is $250,000 and that’s up 8.4% from a year ago at this time.” NOW…. you’ve told me something. Then,
3. Tell me what it means to me. Your next job, and maybe the most important job, is to explain what all of this means to me: interpret the numbers. How you interpret will depend, naturally, on whether I am a buyer or a seller. But this is your chance to shine. It is here, in your interpretation of the numbers, that I will see your expertise; your insight. So lay it on me. No one thinks you have a crystal ball, but everyone believes that no one knows more about the market, how it works, and what it means than a good real estate agent.
Then, maybe, pick another number. Your market “presentation” has about a 30-60 second life span. You might be able to explain two factors; maybe sales price and inventory, or DOM and demand (number of sold properties), or inventory and SP:LP. Again, choose the numbers you believe to best reflect what the market is doing and how it will affect THAT consumer, be they buyer or seller.
In Part 3 tomorrow, we will examine ways to pre-position your expertise.