What are the real benefits of working with local real estate market specialists?
Is ‘local market expert’ just a title some Realtors are giving themselves to maintain relevance in the new digital age? Or are there serious losses to avoid, and big profits to gain from improving your local market expertise?
Let’s take a look at what it really means to be a local real estate market expert:
The First Shot at the Best Real Estate Deals
If you are engaged in the local market on a deep level, you’ll get the first shot at the best deals. As with any bidding or sales scenario, you have to be the first or the best. The first has the opportunity to lock down the deal on the best terms. If you come to the party late, you’ll likely have to make the best and highest offer for the other side. Getting on email lists, and looking at the MLS updates every 15 minutes can help, but those that are on the ground can gain leads on upcoming properties faster than anyone else. This can make all the difference in how much you pay for your next home or investment property, how profitable the deal is, and the terms you can secure.
Ability to Read between the Headlines
The national media is so easy to influence, and often so disconnected from what’s really going on at a local level. Their statistics and conclusions can be very misleading. Engagement in the local market can help debunk these myths and uncover overlooked opportunities.
Real-Time Prices
Unless you are watching local listing activity on a weekly basis, it’s easy to make poor assumptions, and even worse financial moves. It’s easy to forget that active listings are tainted when people can and choose to sell. For example; one week you might not find any listings in a city for less than $500,000. That would signal anything under $400,000 could be an instant buy, and steal, even sight unseen. However, what if the next week the lower end market is flooded with sellers, and there are half a dozen listings under $200,000? What if there are no listings for sale over $400,000? That changes the dynamics and perception of others quite a bit.
The Impact of Upcoming Sales
What about sales prices in the pipeline, which can impact appraised value? If you are well connected, you might know that a unit identical to a $150,000 listing is about to show up in public record for $300,000. That creates a massive overnight profit opportunity. The reverse is also true. What if a $200,000 listing appears to be the cheapest thing in the neighborhood, but an off market sale is in process for just $100,000? That might crush the value of the first property by 50% overnight. If you were in the process of buying that property, you might not be able to get a mortgage on it.
Local Sentiment
National news attempts to judge sentiment by the data. They’ll use consumer spending, Realtor surveys, and other statistics to make judgements. All too often, this data is months off. Compare this to what people are saying in the gym and at the local coffee shop. Take note of how busy home improvement stores are, and what new building activity is happening.
Precise Issues with Individual Properties
Sometimes the ‘small,’ property specific details can have the biggest impact on profit. This is hard to identify without any intimidate knowledge of a neighborhood. Are there issues with underground plumbing, Chinese drywall, a crazy neighbor that renders a property uninhabitable, or anything else that could scare people away?
Alert to New Developments
New development activity can have some of the biggest impact of values. Will new traffic plans make an area less attractive? Will redevelopment dollars rapidly boost the prices in an area? Will new luxury home building set whole new price records? Will new towers destroy views?
Attracting Business
If you become recognized as the local real estate expert, people will seek your advice early, and send you referrals. Dense outdoor advertising and branding, consistent blogging, contributing to the local media can help a lot.
Summary
All of the above can help homeowners and investors make better real estate investments. If you aren’t the local expert, or are investing out of area, harness the insights of those that are local pros.
