How important it is to know your market statistics and position yourself as the goto expert and trusted resource in your marketplace?Fact: I would venture to say 97-98% (or even more) of the
Fact: I would venture to say 97-98% (or even more) of the agent's industry-wide DO NOT know the market #s. Have you ever had someone ask you “how’s the market”? What do you say? How effective is your response? What message does it convey about you, your knowledge and professionalism/expertise? Typically, when someone asks this type of question, as a whole, many of us respond in 1 of 100 different ways. Why? Unfortunately, for the large majority of agents, they’re NOT prepared and haven’t rehearsed how to respond effectively to one of the most commonly asked questions of our friends, acquaintances or when we come into contact with the general public. Of course, there're several opportunities to put this into practice, and we’ll cover a few of them today.
What’s interesting (and somewhat surprising) is the vast majority of agents have some kind of response, however, do they REALLY know what is going on in the market? What I mean is what they’re saying information they own? Or, a combination of bits and pieces of information being picked up here and there...consciously, or even unconsciously? Ask yourself, when you answer this question is what you say coming from what you’ve taken in from EXTERNAL sources (what you've taken in from the outside) or is it INTERNAL sources (from your own doing, effort and research)? After 1000’s of coaching conversations with agents, I know this is (for whatever reason) something that, in general, our industry could become more proficient in. Today I thought we’d talk about the importance of really owning your numbers, what stats are the key ones to be aware of and having a firm grasp on exactly what is going on in your market, being the true expert in your area and a trusted adviser. I realize for some agents, knowing your market statistics comes more naturally as it’s more inline with the personality style you lead with. While others, it may not be something that comes easily, it requires you to get out of your comfort zone and be more analytical. Either way, no matter what your personality may be, if you want to be an expert, we’re required to have this knowledge.
What #’s are to track? I would start with the following, of course; you can track others if you wish...these are the ones I have focused on and have allowed me to have a clear understanding of what was going on at all times.
This includes:
Total Inventory - The cities you service, could be certain subdivisions.
As an example, look at the large city as whole, for me that would be Dallas/Fort Worth. Then maybe go more specific to the county(s) you service. Then the city(s) you specialize in and as granular as the specific neighborhoods you specialize in. It just depends on how informed you want to be.
New Pending Sales - MOM and YOY.
Homes sold/closed sales MOM and YOY.
All new listings brought to market MOM and YOY.
Homes that have expired/canceled Mom and YOY.
When I say MOM, an example would be last month 78 homes sold, this month 59 homes sold. That would mean closed sales were down approximately 25% month over month. OR last month total inventory was 6450, this month total inventory is 6675 which tell us inventory has increased roughly 3.5%. Year over year is the same thing, just taking into consideration what happened last year at this time of the year. Of course, you can look at these #s over whatever period of time you need to based on what you’re attempting to determine. Knowing MOM and YOY allows you to keep up with trends and shifts in the market in real time, vs. after the fact. Bonus: What the current absorption rate is for the area. 18 sales last six mo, that’s three sales each month, currently, have 12 active listings = four months of inventory. What does the inventory tell you about the market?
5 Ways To Use Market Statistics To Your Advantage:
You won’t trip over words anymore or be caught off guard.-
-Never find yourself grasping for what to say, feeling awkward when someone is asking “so how’s the market.”
-You’ll demonstrate your professionalism and be perceived as the go-to expert.
No longer be susceptible to the buzz around the office or what the media is reporting.
-We have to watch out for SNIOP’s. Susceptible negative influences other people.
-Often times we’re picking up on other people’s comments around our offices or in the news. If you don’t know what the actual market numbers are, then it leaves you wondering what is reality. Wondering doesn't serve us well and brings on uncertainty and unnecessary anxiety. Pull your #’s regularly and put an end to this.
If you’re newer in the business, it will immediately give you credibility.
-We’ve all been there, we’re newer in the business and feeling a little insecure about our overall knowledge. (even seasoned agents have these feelings) Nothing boost confidence more than tracking you market stats and closely watching trends.
-This is a sure way to disguise your lack of time in real estate because no one would sense you’re newer to the business when you can carry on a higher level conversation that includes so many precise details about the market conditions.
-I’ll add it can’t hurt any anyone, no matter how long you’ve been in the business.
Great content to use while prospecting, at your open house or door knocking.
-People know when you’re they’re talking to a professional. Think back the last time you were looking to hire someone...you could clearly know just by speaking to them if they were on their game or left you wondering.
-Keeping current with these statistics allows you to have the edge when someone makes a statement about something to do with the market. In the past, you may of let it go, brushed it off, or found yourself backed into a corner stumbling for what to say next. Now, knowing your numbers, you will be able to respond appropriately, take a stand or make your point with fact and no emotion or misinformation.
Give yourself absolute confidence when pricing a new listing, writing an offer for a buyer or during negotiations.
-Again, it comes back to doubt or certainty.
-Pricing is everything when taking a listing. It allows you to know when you can push the limits or need to be more conservative. The numbers tell a story & show you the best path and strategy to use.
-Use this to determine how you make an initial offer when working with a buyer.
-Give yourself and your client the edge when negotiating a deal. I’d bet you the other agent doesn’t have the knowledge you will be bringing to the negotiation table. Use it to your advantage.