An important trend for 2010 is hyperlocalism. This means concentrating your marketing efforts on a narrow market segment or niche. The question is: Which niche is right for you?
Even though technology is changing at a rapid rate, this simple fact remains the same: Your business is most likely to succeed when you carve out a specific niche and become the expert in that niche. Specializing in a specific geographical area or creating a niche working with expired listings, first-time buyers or relocation clients has proven to be a viable path in achieving real estate success.
On the other hand, agents sometimes decide to build their niche around a poor choice, such as "working with people who own dogs." No one is going to hire an agent just because he or she owns a dog.
If you want to pick a great niche in which to specialize, here’s how to do it.
1. Build your business on your strengths.
Joeann Fossland has a great tag line for her real estate coaching business: "No one ever got to the top by developing their weaknesses." Virtually all top-producing agents have one or two market niches where they specialize. When they have business outside their area of specialty, they refer it to someone else. If they’re not good at paperwork, they delegate it. They focus on their strengths, not their weaknesses.
How can you know what your personal strengths are? An excellent strategy is to look at your production. For each transaction that you closed in the last 12 months, identify the type of transaction it was (i.e., whether you worked as a listing agent or buyer’s agent), how the lead was generated, and which market niche best describes the sale.
For example, if you closed a first-time-buyer deal that came from holding an open house in your farm area, look at your other transactions to see if first-time buyers, open houses or your farm area generated other closed transactions.
If you discover that a substantial number of your transactions came from two or three key sources, then you have the basis for forming a solid niche. Specialize where you have success. It is easier to build on what is working than it is to correct what is not working. …CONTINUED
2. Are you motivated to work in this niche every day?
Many trainers will tell you that you have to call on owners of expired listings, that you must have a presence on Facebook, or that you have to do a laundry list of other things in order to succeed. The truth is that unless you are passionate about what you are doing, the activities you force yourself to do are not sustainable.
A good analogy is a diet. It’s impossible to stick to a prospecting schedule or to a diet unless you can find a way to make it enjoyable.
Consequently, the second factor to consider when choosing a niche is whether you enjoy doing the work. It’s virtually impossible to force yourself to do something you hate doing for extended periods of time. If you don’t like a particular real estate activity, keep searching until you find something that works for you in the long run.
3. Is this niche active in today’s market?
Many agents had great luxury real estate businesses until the credit crunch reared its ugly head in 2007. It’s great to specialize, but if there is no financing in your price range, that means sales are very limited. Before you commit to picking a specific niche, make sure there is enough business in that niche to justify becoming a specialist. There are a variety of ways to assess this situation.
If you are choosing a geographical niche, check your local multiple listing service statistics to determine how many sales have closed in the last 12 months. If you want to do 36 transactions this year and there were only 15 sales in your niche, you need to expand your reach.
To do this, identify the top two or three areas where there is a substantial amount of activity and then determine whether you have the skill set and the motivation to expand into that area.
If you have a niche where you have had success in the past and that part of the market is quiet, consider branching out to a different area where there is more market activity. On the other hand, if your niche is active, consider expanding it.
Ultimately, choosing the right niche for your business is not that hard. Focus on your strengths, delegate what you don’t do well, and look for opportunities to expand where the market is the most active.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.
What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.