Think of your marketplace as your playing field, not unlike an athlete views a football field, basketball court or hockey rink. The better you know every inch of that playing field, the more you can exploit it to your advantage.
Before I became a Realtor, in my early twenties, I was a racquetball professional. I played hundreds of tournaments over my sports career, and my best games were always at my home club. There, we had a court with floor-to-ceiling glass on the right side and back wall, making it particularly difficult to see in the back right-hand corner where the two walls of glass converged.
When players came for tournaments at my club, they struggled to pick up the ball in that corner – giving me what you might call a significant home field advantage. I rarely lost a match on that court.
Real estate is like any other competitive endeavor. If you learn all there is to know about your playing field, you’ll acquire a competitive advantage that will distance you from the competition and build the basis of your success.
The most challenging aspect of gaining market knowledge is determining what facts to collect and where to find the information you need. Fortunately, a number of readily accessible resources are available to Realtors. All you have to do is contact the right people and ask the right questions. The following sections will help you on your data quest.
Your Local Board of Realtors
All professional agents belong to Realtor associations that compile and make available a wealth of statistical information. The facts you can obtain from your local board include:
• The number of agents working in your marketplace. This information helps you understand your competitive arena. It also allows you to track whether your competition has expanded or receded over recent years.
• The production of the average agent in terms of units and volume sold. By obtaining this information and comparing it with your own production units and volume, you will be able to contrast your performance against the other agents on your local board. This information will be useful in your effort to calculate your share of the market. It also helps you understand how you stack up against the other agents your prospective customer might be considering.
• Experience levels of agents in your field. Most Boards of Realtors keep information regarding the percentage of agents recently licensed and those with three, five, and ten years in the business. This information provides you with another factor against which to measure your competitive position.
Meet with the executive director of your local Board of Realtors to learn the extent of information that is available to you, how frequently new research is released, and how you can obtain copies for your ongoing review.
Your Local Multiple Listing Service
The Multiple Listing Service, commonly called the MLS, keeps statistics of all the listings and sales in your area that are processed through the MLS.
The MLS does not cover every sale due to the fact that some sales bypass the system. Often, new construction builders, particularly in very robust markets, don’t submit their inventory into MLS. Agents also sometimes sell properties themselves or in-house, and those sales are not submitted to MLS. However, the MLS, in most markets, covers more than 95 percent of all marketplace sales, and it represents the surest indicator of real estate activity in your region.
The MLS can give you key market statistics including:
• Days on the market averages
• Listing price to sale price ratios
• Listings taken versus listings sold ratios
• Geographically active markets inside your service area
Nearly all Realtors recognize the MLS for its significant role in increasing communication and exposure of real estate properties. Fewer Realtors recognize the MLS for its powerful but under-utilized role in reporting trends and performance of agents, companies, and subsets of the marketplace. Access and put this information to work to your advantage.