How did you learn about your market?

Question

A question for my fellow Real estate Agents: How did you learn about your market? When you first received your license and started working under your broker, did you receive mentoring or did you have to figure things out on your own? What factors helped you decide which market to focus on? what areas do you recommend new real estate agents to focus on when starting out?

Hattie Dizmond · Answer

I'm not an agent.  However, I believe one of my true competitive advantages as an investor is my detailed knowledge of the sub-markets we focus on and my knowledge of the DFW market in general.  Notice I didn't say I have detailed knowledge of the entire DFW area or our entire MLS area, which is 12,000+ sq miles.  It's impossible.  I know enough to know which areas across the urban & suburban sub-markets of our MLS represent median house price & income, which areas are experiencing growth and/or renewal, and what the general grade of the area is, etc.  However, I only consider myself an expert in the sub-markets we actively work.

So, my first piece of advice is to become an expert on a specific area; pick a zip code or school district...something that provides a defined segmentation.  Then learn what makes that area unique or desirable.  What types of people live there and want to live there and why.  What amenities does the area offer.  (For instance, one of our primary farm areas is the Richardson ISD.  Why?  It's mostly suburban, family neighborhoods with a school district that is one of the top 25 in the entire nation, which means people want to live there and exiting a deal is pretty easy.  But, even within that highly desirable ISD, there are 3 elementary schools, 2 junior highs and 1 high school that are head and shoulders above the rest.  My business partner lives in Richardson.  1/2 block down the street from her the exact same house will sell for $50k less than hers, because it feeds to a different elementary, even though the elementary that's assigned to that house is rated a 9 on GreatSchools.org.  And, it's still in the same subdivision, neighborhood, etc.  You have to know the area to really get it.  Our other area is school agnostic, because 90% of the people with school aged kids send their children to private school, which is why they live in the area.  Most of the top private schools in Dallas area within a 5 mile radius.  Why is that important?  Money.  People have money and are willing to spend it.  And, sales don't necessarily pick up or drop off based on the time of year.  If people have their kids in private school, moving during the school year means nothing, because there is no transfer necessary.  Again...you have to understand the area and the people who live there and want to live there.)

Basically, don't try to boil the ocean.  Pick a manageable area.  We like to think in terms of sub-markets and micro-markets.  (i.e. Richardson ISD is a sub-market.  Individual elementary school feeder zones represent micro-markets for us.)  And, visit every single open house you can within the area you choose.  Hope that helps some.

Lisa Jones · Answer

@Federico Gutierrez@David Hunter@John Lampertius@Jake Thomas@Bob Collett wow!! Thank you all for your advice! I must say that I am definately taking note of all of your replies and will make sure to apply it as soon as I can. What I understood from most of your posts is that it is an absolute must to get out there and see the market for myself. I have to get my hands dirty to fully understand the market! I have to get to know the neighborhoods and focus on a specific area of interest. Once again thank you all for your contributions to this post. Every response was spot on!

David Hunter · Answer

I learned just by 'DOING.'

You'll learn a lot just by showing buyers around.

When I started working in real estate the second go around, I was working with a top agent on the east side of Cleveland and didn't have a clue where I was going.  I just learned by DOING.

Also, if you're new, it's usually best to start working in the area you already know.  But, as you can see above, I didn't know what I was doing or the area when I started.

John Lampertius · Answer

Hello Lisa,

Start small and expand.  I was a Realtor for a short time back in the early 90's.  Young and lacked confidence to stay the course...but the investor side of me has only grown.  I used to walk my neighborhood and took a picture of every home on the street in a 6 block square area...back when cameras used film!  Oh how the internet makes this so much easier...but nothing beats walking or biking your area!

Cheers,

John

Lisa Jones · Answer

@Steven Gesis honestly I believe not knowing the area is my biggest weakness as a new agent. I have been stationed in MD for 3 years however I have lived in 3 different cities all across the dmv! Networking is definately going to be my first priority.

Steven Gesis · Answer

Lisa, I think having a grass roots knowledge of your hyper local area is a critical and necessary skill that must be developed and honed into perfection. If you are from the immediate area, you should have an upperhand. If you are just learning the space, certainly research and hours of networking is your first step.

Much Luck

Bob Collett · Answer

Hi Lisa... excellent question. Lots of good answers already given.

I am an agent and property manager here in Cleveland area. I worked at a couple of different brokerages until I settled in at Remax Trinity in Brecksville OH. Some companies have more structured training than others, and if you might want to take a look around and see who has a good hands-on training program in your area. In my case, I focused on areas that I wanted to personally invest in. I like the good school district communities, and places where I did not have to worry so much about my tools getting stolen.  I selected areas that were a short drive from my residence because I felt I could service people better if I could get there in 10 minutes. In these areas, I go to all the Broker open houses, meet with other agents, visit the weekend open houses, and also spend some ad bucks promoting my name on Z, for example for a couple of the zip codes I am focusing on.

I personally believe that one can achieve success in any area if you immerse yourself in it. So this also means scour the MLS for listings and solds in your selected areas. As some others suggested, start with a small area. Join local chambers, and do lots of networking in your well defined target area. The idea is that in a short amount of time people will start thinking of you as an expert in that area. Offer to do some open houses for your fellow realtors in your target area. This will help you collect some buyers who are likely interested in the same neighborhoods. Check out the county websites and get the data on every foreclosure in your target area over the past year or so. If its too much to remember, then your area might be too big. When we do all of these things, we learn lots of stuff to talk about... not only the housing stock, but also parks, and community events, municipal issues, politics, school issues, housing codes, restaurants, etc.

Good luck.

Jake Thomas · Answer

@Lisa Jones I had no formal training it was more of a learn as you go. My first transaction was helping my brother buy a duplex. I figured even he couldn't fire me if I made a bunch of mistakes. For the first few transaction I made a lot of mistakes and asked a lot of questions. If you are unclear about something ask someone. Now, I also invested before I got my license so I understood the process of buying a house. I think this is new Realtors biggest weakness. Why would you hire someone to help you buy a house that has never done it before or only once in their lifetime. They don't know or remember the stress related with getting the loan, going through inspections etc. I has bought and sold a few houses before then and understood the process so that helped.

Good luck.

John Lampertius · Answer

Hello All,

I agree with taking a small area and learning it extremely well.  In 2010 I started changing my focus from a long time investor in Royal Oak, MI to Farmington Hills, MI.  This was primarily due to a divorce and where my children go to school. I was also happy to be done with Royal Oak as it is expensive for investor/landlords.

All of the online sources, visiting open houses, driving and walking neighborhoods - calling on opportunities as I see them...all good ways to learn the market.  I'm focusing primarily on Condos in my new market, but also have a good handle on SFH's in a concentrated section of neighborhoods (about 2 miles x 2 miles). I've seen fixer-uppers and foreclosures go on the market and reappear after rehab - so as investor, I can see what is really/financially possible.

Best wishes in gaining market knowledge - no way is wrong, just try to be systematic.

Cheers,

John

Federico Gutierrez · Answer

There are plenty of stats on the MLS, least in NEO MLS there are.Spend an hour each day going through the average sale price, the days on markets, aver list price, list to sale price ratio. You don't need start off knowing the whole market. But start in a zipped and then move onto another and so forth.