Tools used for this training: Zillow, and the Orlando Regional REALTOR Association.
After understanding The Profiles of Home Buyers and Sellers, the second part of your niche can be found with the following factors:
1. Zip codes,
2. Price Points in each zip code
3. Listing types
Home buyers trust an agent that is well versed in the area they are looking for homes in, as well as their buying situation. Additionally, These factors will also determine how to optimize your Zillow lead generation, which will be discussed again in the real estate course of Follow Me University.
Choosing the most effective ZIP Codes is quick and easy, if you know what to look for. There are three important factors to consider to see if that market will work for you. Determine what the average price point is in any zip code before buying, and decide if your brand fits the mold.
The image to the left is a list of all zip codes in Orange and Lake Counties.
The average price point can determine how quickly homes sell, how much your commission will be, and what kind of buyer will be likely looking in a given area.
Example: If your zip code has a higher concentration of homes under $150k, you will have many investors (and wannabe investors) looking for passive income properties. Zip codes with a plethora of 3/2 single family listings under $300k with A-rated schools will bring a higher concentration of families. Know the type of buyer your zip code attracts, and if this clientele is your preferred market.
Types of Listings
There are three main types of listings to be aware of in the real estate industry: existing homes, new homes, and special sales. It’s important to be familiar with each, what type of buyer these listings can attract, and how much work you may be putting into them.
Any existing home that is currently for sale by the home owner and not a bank, case manager, or home builder is considered a traditional sale. You will see these homes for sale in the MLS or any IDX integrated website. This example shows an area, 32814 (Baldwin Park) that has very few bank owned homes, or new construction sales with a higher initial price point, which will decrease the amount of homes sold per month.
What to Expect
Buyers and sellers of traditional sales will range as far as their profile, but the duties will fall on your shoulders for your client. Remember: The lower the price point, the more involvment your client will want you to have.
Special sales typically refer to bank owned homes (HUD homes, reo, auction properties), and short sales. Refer to Zillow to see how many special sale listings are advertised in your zip code on their site vs. traditional home sales advertised. Zillow will show you the pre-foreclosures that have been served foreclosure notice (lis pendens) pulled from public record whereas the MLS will not. The MLS, however, will give the most accurate and updated active (ACT) bank-owned and short sale listings.
*What to Expect* As a buyer's agent, you will be negotiating with a case manager more often times than not that has been hired by the bank to be the middle-man. A case manager is typically paid hourly, and has little or nothing to gain to aggressively negotiate for the bank. Furthermore, most foreclosures are processed online with a slower turnaround time for offers. for your clients behalf. Be aware of the kind of listings a particular zip code has more of.
Check if your chosen zipcode has a high amount of new construction. This is important to note because many new home builders have a contract with Zillow that will not allow any other agents to promote themselves under new construction listings. If the area you choose has seen a recent new homes boom, you may be competing with Lennar, David Weekly, and the likes. On the other hand, there are many advantages to the new construction market. If your goal is to target buyers that are looking in zip codes with a high concentration of new homes, the money will always be well spent even if your impressions are reduced and featured on existing homes only.
*What to expect* New homes has the easiest contract-to-close process as a buyer's agent, since the home builder handles the entire process for you and your client. It's imperative to have a buyer-broker agreement so that the home builder knows you are representing your clients, and will not forego paying your commission.