08 Jan Q: What does it mean to specialize in real estate? Why is specialization essential for success?
Companies tend to, regardless of industry, choose an area of the market that they want to focus on and specialize in. Within each company, different departments are created with the intent of having individuals specialize in various roles and activities. For example, when I was working for a copier sales company, a company that was eventually acquired by Xerox, we specialized in selling copying machines that were designed for medium-sized offices. This business model led the company to deal solely with these printers, as opposed to commercial-grade equipment used in print shops.
Within the confines of this copier company, there were those, like myself, that focused on sales, while others focused on everything from customer relationships to technical support. As such, each of us played a different, yet vital role in the company’s overall mission. Taking things a step further, as a sales representative, I focused on prospecting on the West Side of Manhattan. I was aware even then that my strengths lay in cold calling and knocking on doors, thus I used my communication skills to seek new business. When I found a prospective client, I would work with a team to finalize the details of the deal.
I was very successful in this role because I focused my efforts on a targeted area that was already filled with specific types of companies. Since I did not need to spend my time worrying about the technical aspects of copying, I was free to devote time and energy to honing my communicative skills. Unsurprisingly, I quickly became an expert at finding those who needed new copiers and how to get them to chose my company as their primary vendor.
What I have described here is merely an overview of how all successful companies in an assortment of industries work. However, because real estate is filled with independent contractors, and the barrier of entry is so low, real estate has not kept up with the most efficient, effective, and rewarding ways of helping the public buy, sell, and rent homes. What I recommend to all Meier Real Estate agents is to specialize! If you adhere to the following advice and practice this philosophy, you will be very successful in the business.
Examples of specializing in certain types of products and/or clients:
• You can focus on a specific area (e.g., Chelsea. This is often referred to as geographic farming)
• You can focus on an apartment type (e.g., Two bedrooms in full-service condominium buildings)
• You can focus on a specific building (e.g., Listings at XYZ building – At Meier Real Estate, we have a building specialist program to assist with this)
• You can focus on networking with a certain group of individuals (e.g., Property owners in Manhattan who have a net worth of over $50 million, or buyers that reside in Asian countries)
Examples of specializing in specific activities:
• You may decide that you want to focus on mining for prospective sellers. In following this approach, you will likely be calling and/or mailing potential FSBO (For Sale By Owner) sellers who might want to hire an agent or contacting owners whose listings have expired. Since the list of people in these situations is constantly replenishing, you will have a consistent and steady stream of individuals who may become your clients.
• You may decide that you want to focus on relationship-based marketing, which means connecting with people in your sphere of influence. It’s best to adhere to a schedule when setting appointments, which means creating a calendar with blocks for coffee, breakfast, or lunch with an acquaintance at least once per week. Over time, this simple routine will help you build valuable rapport and ensure that you achieve top of mind awareness with these individuals. Not only may these individuals become direct clients, but you are opening yourself up to their extended network of contacts as well, should you leave a good impression, of course.
• You may decide that you want to work as an inside salesperson. This is often referred to as an ISA, and your job is to field inbound sales leads, pre-qualify the individuals, and schedule them to meet with other agents. You might also be responsible for maintaining a relationship with these leads until they are ready to engage in transactions.
• You may decide that you want to focus on marketing and branding initiatives for the firm, which could include social media, event planning, or blogging, just to name a few.
Now that you understand what it means to specialize, let’s explore why this is a crucial aspect to your eventual success! As people look to real estate agents to guide them in the right direction, they expect agents to provide expert advice and have superior knowledge to everyone else. When you specialize, you are limiting what it is that you are focusing on so that you can become an expert in one thing. The more you specialize, the more meaningful, detailed knowledge you acquire and can share with potential clients.
The value of specializing in a specific product type or neighborhood can be outlined via a few true-to-life examples. If I told you to find out all that you possibly can about every property in Manhattan, you would obviously have to take that advice with a grain of salt. Sure, you might learn a few statistics about various apartments, but there is no feasible way that you could learn everything about all apartments. If, on the other hand, I told you to learn all you can about apartments on the Upper West Side that have two bedrooms, two bathrooms, an elevator, and a doorman, you would be able to narrow down your research. Theoretically, you could even visit every single apartment meeting that description that is listed for sale, as well as research all properties meeting that criteria that have sold in the last 6 months. You could even make a list of all the buildings on the Upper West Side that have such apartments, regardless if they are occupied or not.
With that information acquired, you would be well-equipped for a buyer that is looking for an apartment with those features. Additionally, if there was nothing currently listed on the market for sale, you would know which homeowners to reach out to in an effort to solicit a potential sale.
Similarly, if your buyer told you that they have a dog, you would know which buildings are dog-friendly and narrow down the search without wasting additional time. Thus, if your buyer was interested in making an offer on a particular unit and asked your opinion on pricing, you could confidently share accurate information with them to work out a deal. Not only does being an expert enable you to better negotiate and advise clients on specific apartments, but it also enables you to find unlisted apartments because you simply know where to look.
To understand the value in specializing in one specific building, consider the following information: You would have visited every listed apartment available for sale and rent in the building, researched all sales, and would have gotten to know all the homeowners and renters on a personal basis. You would also know what the board policies and application requirements of the building are. As such, if there happened to be any red flags in the financial history of the building, or any banks that have recently lent in the building, you would be a knight in shining armor for a buyer that requires financing.
On a related note, having knowledge of popular amenities in the area can create an invaluable personal connection with your buyer that can lead you to seal a deal. Though it’s helpful to have information regarding well-known locations and local favorites, the real value is in the fact that this information makes you come across as comfortable and knowledgeable in the area. The time spent on your reconnaissance missions have given you the ability to introduce a vital personal touch that makes the buyer feel at home.
This level of friendship and trust can be the difference between a sale and a complete collapse should the buyer get cold feet after making an offer. Whether or not the buyer may be second-guessing the location, its history, or any one of a variety of factors, the fact is that convincing them can be a struggle. It is in times like these where you tap into both your knowledge of the building and the personal connection you have formed to suggest arranging a meeting between the buyer and a resident of the building. After a brief meeting with John, a third-floor resident that you have met a few times and exchanged contact information with, your client’s fears are assuaged and the deal is signed. Not only is your client happy with the purchase, but you are hailed as a respectable individual that truly cares about the well-being of your clients. You can rest easy knowing that you have a reliable contact within the building should you ever need to set-up a meeting with a future client.
To understand the value of networking with a specific buyer type, let’s momentarily consider focusing on buyers from Asian markets, which is the business reality for a number of agents here at Meier Real Estate. These agents know all the challenges overseas buyers encounter, ranging from lacking US bank accounts and financing opportunities, to difficulties with the English language and acquiring a network of attorneys and advisers to help with the transition. Should you focus on these types of buyers, you can provide service of an unequivocal quality and leave a lasting impression on their real estate experience.
As an example, one of our agents was working with a Chinese buyer, and a few days before they were about to close on the sale, the bank who was financing the deal backed out. The deal was about to fall through and the buyer was understandably crushed. He really wanted the apartment, but every bank we reached out to would not provide financing. As it turned out, however, because the Meier Real Estate agent had been focusing on Chinese buyers, he had a large network of small, private banks that he was able to reach out to. Through these special contacts, the agent was able to find a relatively-unknown bank that was happy to fund the purchase. In the end, the sale was completed and the buyer got the property. The lesson here is that had any other non-specializing agent been handling this transaction, the established contacts would not be available and the deal would have most-certainly collapsed.
Specializing in specific agent activities can be both beneficial to your career and rather rewarding in the long run. At one point in my career I decided to focus solely on prospecting for listings. In doing this, I partnered with other agents who focused on working with buyers and showing them listings, after which I would return for negotiations. My goal was to devote most of my time to prospecting so that I could acquire a greater number of listings as opposed to splitting my focus between listing and showing. Working with buyers is an entirely different experience that requires a different skill set than working with sellers. I knew that if I tried to do both, my talents would be halved and I would not be the best at either.
Most of my prospecting came in the form of contacting FSBOs, which led to my (well-deserved) acquisition of the nickname, “The FSBO King.” I had put together a really great organized system to keep track of those trying to sell on their own. I was happy for those that succeeded, and for those that failed and wanted a professional real estate agent to help them, I was right there at the exact moment they needed me. By taking on a massive quantity of listings, I made a great income and was able to spend an increased amount of time negotiating, which is something that I really enjoyed. Since negotiating was another specialty of mine, I read every book written on the subject that I could get my hands on (Roger Dawson has some great books on the topic!). When I met with a seller, I was hired due to my specialization and my skills in organization. It was visible, even to the untrained eye, that I had assembled a great team of buyer’s agents that were experts in their respective fields. Sellers are also fully aware of the fact that a good negotiator nets you more as an owner, and it was clear that I was the type that would not back down. The buyer’s agents on the team also enjoyed their specialties immensely and appreciated the deep relationships they developed over time with their buyers after visiting property after property. Unsurprisingly, the repeated rejections that often come along with going on numerous listing pitches was decidedly less rewarding and nerve racking, but there is no better or worse specialty; just what is best for you.
At Meier Real Estate, we have highly-encouraging programs in place to assist agents in becoming specialists. Additionally, we provide a high level of administrative and marketing support to our sales agents, allowing them to spend most of their time on specialized activities such as prospecting, building relationships, and gaining product knowledge. Thus, we are oftentimes asking our sales and rental agents, “What can we do to supply you with more time for coffee with clients and less time on marketing and administrative activities?”