Post by Rob Minton
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In my previous post titled "How to Grow Your Business During a Recession", I provided you with a sneak peak at what I'm personally doing in my business. If you read the post, you got to see how I completely re-invented my business within the last few months.
Hopefully this post inspired you to re-invent your business, too. If so, you must redesign your business to follow the money. Too many agents miss this critical step and spend months, if not years, struggling.
Did you notice, in my previous post, how I surveyed the market to see where the demand was before I re-invented my business? I wanted to make sure there would be demand for my new service. I had to find the demand before I did anything.
Most small businesses don't study demand. They have an idea for a product or service and they run out and create it. Then when the product is created, they attempt to sell it. This process is completely backwards and is one of the reasons why businesses fail. You should try and sell the product or service first. If it sells, then work you ass off to build or create it. Don't spend months creating something that may or may not sell. Shortcut the process by selling it first.
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 demand. One agent I know in the Cleveland, Ohio area told me they wanted to specialize in selling homes priced $400,000 to $800,000. Their reasoning was that they would make more commissions for the same number of home sales. This makes sense on the surface.
However, is this where the money is in the market?
Not from my research. In fact, this is probably the worst area in Cleveland to specialize right now. These homes are not selling. The demand for these homes in this price range has all but disappeared. Think about what would happen to this agent if they continued on with their goal? They would spend hours writing marketing campaigns to attract listings in this price range. They would invest a lot of money advertising. Once they got the listings, they would host open houses and run more advertisements promoting these homes. Months later the homes wouldn't sell and this agent would be frustrated and broke. This happens every single day.
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 sold homes in?
3. What areas are these sold homes 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 you can use 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. Everything is listed for sale and this information isn't helpful. Focus on the sold properties. Study each one. See if you can spot any commonalities. I'll bet you will.
Once you find he commonalities and see the demand, quickly engineer your business around this opportunity. I realize this type of property or segment of the market might not be where you want to focus. Unfortunately, if you want to be successful, you don't have a choice. You must follow the money. Otherwise, you'll be ramming your head against a wall each and every day. I didn't want to reinvent my business. It's a lot of work. I didn't have a choice. Neither do you.
I also suggest that you perform this market research each month because demand has a tendency to change quickly. You want to be able to spot trends in the market and adapt to these trends quickly. This means you'll probably be reinventing your business over and over again throughout the years.
Don't you just love real estate?