Don't Get Lost, Focus On The Local Market

Every once in a while, I need to be nice to myself and write a blog about a topic close to my heart. A topic I so believe in that I am always surprised when I need to explain its logic to puzzled real estate professionals. No doubt people who know me already know what my favorite subject is. The title says it all: if you want to be successful, keep on growing your business and eventually become a high-end superstar, stay focused on the local market. Period.

Those big sales have a way to mesmerize real estate professionals. Understandably so. There is a lot of commission money to be made upon selling a luxury home. Everything being equal, it’s more rewarding to close on a $3M transaction than to close on ten $300,000 sales. But it’s not just the money, it is also -and perhaps even more so-, the feeling that now you belong to the elite; you “made it” in the business.

This feeling is actually very legitimate. Not everyone can list or sell a high-end property. It takes more than knowledge and skills, it takes confidence. Confidence is key to obtaining the sellers or the buyers’ trust. People who are successful are not likely to hire the first guy who answers the floor-call at the office. They want to feel comfortable that the agent who may be trusted with the marketing of their home acts, speaks and dresses as a natural at that price level. Someone whose assurance and sense of purpose radiate in the room.

Obviously they also want to make sure that the agent is associated with a credible company which has a separate luxury division and a global high-end marketing program, in order to reach out to a maximum of qualified potential buyers whether in the US or abroad.

There has never been any question in my mind that if you can list or sell a luxury home, you can sell any home, anywhere and at any price. It does not work the other way around: selling at the low-end or even bread & butter real estate, does not guarantee that you will ever get the trust of high-end homeowners.

Let’s define “local”. The local market, or primary market, is simply where the office is located: the town + those towns immediately adjacent. To a lesser degree, the appellation may also apply to the town where the agent resides, if different. The local market is where you are assumed to make your living, otherwise you are better off switching to another office location serving the market where you aim to succeed. That’s the battleground where you need to measure yourself against the competition and, ultimately, where you need to win. That’s the only market where you will be judged, by the principals and by your peers, irrespective of how much business you do elsewhere.

I realize that most agents are mainly preoccupied with the pressure to sell anything-anywhere in order to pay the bills. This unfortunate reality will naturally lead many to do business all over the map, to the point of progressively pushing them well out of their turf and into “foreign land”, where they have no chance of creating recurring business and make a name for themselves at the top end.

 Being that real estate is a very competitive business, and agents are independent contractors free to work where they want (and pretty much any way they want), the situation can easily get messy. Lots of agents, irrespective as to which market they call home, focus their prospecting in far-away pricey zip codes in hope of listing trophy homes and earning juicy commission dollars. Ridiculous.

Do these agents think that wealthy homeowners are innocent enough to hire an agent from a different geography with no extensive local market knowledge/experience/success? Hello? If you feel targeted by the above, please don’t waste your time and damage your reputation and that of your company. If you want to strike big at the high-end, you Must focus on your primary market and grow your business organically, one local listing at a time….

Morality: if you want to eventually be recognized as a luxury market player, you first need to be recognized to begin with. If you devote most of your prospecting activities to your primary market, you will soon become recognized as a “Local Expert”. That’s the first step on the way to becoming a local hero at the high-end. To achieve this goal, it is better to multiply modest sales in your primary market and progressively gravitate your way to the top of the price ladder.

Remember this rule that never fails: the more successful you are as a high end agent, the smaller the market in which you work!