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Niche
Markets
Whether you
decide you want to be a dedicated listing agent or you
simply want to attract more listings than your current
strategy provides, there is nothing easier than listing
homes if you focus on a well-thought-out plan.
The plan you develop must include an understanding
of your current market, your goals, your budget and a
series of steps you will follow to make it all happen.
A good way to begin to understand your current
market is to view it in terms of all of the possible,
smaller niche markets that are available to you.
To obtain a professionally prepared Custom Web Plan
that spells out specific ways for you to target sellers
and buyers visit http://www.sellrealestate.net
/FreeWebPlan.asp.
A
HANDFUL OF MARKETS
Let’s
make short work of this part.
Homeowners fall into certain categories, which are:
Homeowners in defined neighborhoods, FSBOs, homeowners who
listed with another agent but whose home did not sell,
homeowners who visit open houses, absentee homeowners,
your past clients and / or sphere of influence and don’t
forget homeowners who start their research online.
It is rare to find an agent who can successfully
tackle all of these niche markets simultaneously but it is
all too common to find agents who refuse to focus on one,
two or three niches for fear of losing potential listings
from the other markets. Failure to commit or focus usually leads to failure in all
areas.
FAILURE
TO FOCUS - A
PATH TO DISASTER
Some people
who are reading this have minds that are racing ahead,
finding objections, telling themselves that direct mail or
the Internet or some other strategy never works or
rejecting the whole concept because this approach does not
also focus on buyers.
You must STOP that kind of thinking.
SLOW DOWN and remember that YOU are the one who is
in control of your mind.
All niche markets can be and should be
considered…one at a time.
And, having considered each niche market with its
advantages and disadvantages, then you can decide which to
pursue and which to leave to others.
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The
most sensible way to evaluate any niche market
is to look at it in terms of dollars, time, effort
and reward. For
example, let’s consider a specific geographic farm
of about 240 homes with an average sales price of
$300,000.
Statistics tell us that in an average
neighborhood, 10% of the homes will go on the market
over a 12-month period.
In our mythical farm here, that means that 24
homes should be listing between now and a year from
now. Based
on a 6% sales commission rate, these 24 homes will
generate $432,000.
However, since we are simply focusing on
listing homes in this newsletter and not on selling
them, let’s cut that commission is half to get the
listing broker’s share, which is $216,000.
A
LITTLE REALITY PLEASE
Of
course it is unrealistic to plan that a single agent
will ever be able to list every home in a
neighborhood so let’s cut down that figure a bit.
If an agent is only successful in listing
half the homes, his/her gross commissions for the
year would be $108,000.
But that figure must be further reduced by
the part that belongs to the listing broker.
The broker / agent split is widely different
but an agent who gets to keep 70% would generate
$75,600 before expenses.
A
MARKETING RULE OF THUMB
Whether
this amount would make you deliriously happy or seem
like just one step in your overall yearly income
goal, we have to look at what it will cost you to
get this amount of income before we can decide
whether or not this is a good strategy.
You should budget 10% to 15% of this income
for marketing and advertising yourself so you can
generate this amount.
In other words, $7,560. to $11,340. per year
is what you should plan on spending if you want to
keep generating this kind of money.
This comes to $630 to $945. per month. Of
course, the more coordinated you entire marketing
approach is, the lower your marketing budget will
need to be. Is
your marketing coordinated?
To find out online visit http://www.sellrealestate.net
/coordinatemarketing.asp.
Don’t
start thinking about all your other expenses
such as license fees, board fees, costs of selling
the homes you list…all these expenses must be
dealt with but should not ever detract from your
marketing and advertising budget to promote YOU.
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Once
you have evaluated a strategy this way and
decided that it is worth your while, it is time to
take a realistic look at all the methods you might
use to make it happen.
To keep things simple, let’s stick with
the example we are using of targeting a geographic
farm for the purpose of listing at least 12 homes
during the coming 12 months.
A monthly marketing budget of $630 to $945
means that quite a few marketing approaches can be
considered. A
monthly or even bi-monthly direct mail outreach is
definitely in the budget but you might find other
ways of reaching out to this target audience.
BEEN
THERE DONE THAT
Often
I talk with agents who have tried direct mail in
the past but due to poor results have vowed never
to rely on direct mail again.
Upon probing, I usually find that the
reason for the dismal results was not so much the
fault of the way in which the message was
delivered (my mail) but more the fault of the
message itself.
If you purchase and mail out pre-designed
postcards that are being sold to every other agent
in town, don’t be surprised if the recipients
throw them away.
WALK
YOUR OWN PATH…THEY WILL FOLLOW
If
you want to succeed with direct mail you will need
to develop and send messages that your audience
will find useful, helpful, entertaining and
surprising. An
inventive way to accomplish this is to develop
your Website with useful, helpful, entertaining
and surprising content and then use your direct
mail to let your audience know about it.
It not only works but if you are truly
clever you can use the same strategy to develop an
Email database and then you can stop using direct
mail. Think
of that. You could pocket an additional $630 to $945 a month.
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