Having a niche product or market in real estate can be beneficial for realtors in many ways. For one, it allows a focus on a product or segment of the market that may not be as crowded as others. The less crowded this segment is, the more likely you’ll get business out of it when that segment is in demand. There can also be a downside of focusing too much on a niche. As an example, investment property is going to be a tough niche during a recession. I recommend that real estate agents start off with residential single-family sales and start developing a niche as they become top real estate agents. The main thing, in my opinion, is to focus on one or two niches.
A Starting Point for Every Realtor aiming to Become a Top Producing Real Estate Agent
Home Buyer’s agent
Representing home buyers in Austin is the starting point for any realtor looking to start their career and make it to the top producing agent list. While there may be an inventory problem with homes for sale in Austin, there isn’t a shortage of buyers. It just takes the right training and a good lead program to help start the journey. Once you get your feet wet, you can move on to the occasional listing and then the journey really begins
Listing Agent
Once your career gets going, you’re going to naturally start picking up listings from previous Austin home buyers that you’ve worked with. They are going to want to sell their home and upgrade to a newer home. After a few of these, this is when you can start becoming a real listing agent in Austin and you’re going to want to start thinking about what niche you’re going to focus on.
Discovering Your Niche in Austin Real Estate
Be careful not to pick too many. One or two niches that are related in some way. If you spread yourself too thin you’re not going to be able to truly master the one or two that you’re good at. For me, it was investment property as well as homes and condos for sale in 78704 zip code.
Residential-Single Family Home Sales
This is the first thing that comes to mind, but it’s not really a specialty, more of a starting off point. If you’re going to luxury homes or farm and ranch, you can’t really do that without having sold a home.
Niche Areas of Expertise for Aspiring Top Austin Real Estate Agents
1. Downtown Austin Condos
This is a good market to specialize in if you live in downtown Austin or very close to it. It’s especially good because many of the property tours you set up with condo buyers will be in close proximity or in the same building. With any niche, it’s important to know your product. At the very beginning of it, you’ll need to tour every condo listing so you really have your finger on the pulse of the market and be able to talk about this listing to potential buyers.
2. Farm and Land
This is truly a niche market that’s not going to be crowded but there are reasons for this. Farm and ranch properties that are for sale are going to be geographically spread out. Knowing the product is going to require touring many different areas and you’re going to need to take classes on how to inspect wells and ponds and know what the effects of drought will have on the area. This is a segment of the market that is very different and requires a lot of homework. Also, the price points on these are going to be somewhat low for as long as you’ll need to drive.
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3. Ranch Properties near Austin
Think of this niche as a luxury farm and ranch. When realtors talk about a true ranch property they are talking about hundreds of acres of land. And this is going to be a niche as well but the price-point is going to make it worth the investment in researching the property. Again, be prepared to drive. I often see homes with under 100 acres being represented as a “ranch” when it, in fact, should be called a ranchette. But if you know how to sell farmland, then ranch and ranchette should be fairly close. You will also need to know about luxury homes as many of the buyers for these will be wealthy and wealthy buyers want to spend more on a high-end inspector.
4. Residential Investment Property
As any real estate agent knows, residential investment property is defined as a home, duplex, triplex or fourplex that is zoned residential. This is not commercial because any property with four units or less can get a residential mortgage instead of a commercial mortgage. This is appealing to real estate investors because they can get a better interest rate and typically a longer amortization schedule. The great thing about specializing in investment property is that you often sell an investor with many properties. Sometimes that’s all at one time or sprinkled over the years. I have investors that buy duplexes from me every other year. Also, most investors aren’t nearly as emotional about the purchase as an owner occupant buyer would be.
5. REO
REO, or Real Estate Owned or bank-owned, are basically foreclosures. This is an amazing niche during a recession. It's also one this is VERY hard to get in. The way to get in it is not what you think. Most people think you apply to several banks and submit resumes. Well, you do that, yes, but you also have to network. This means that you go to the REO conferences and your network with asset managers. An asset manager is an employee of the bank or a third party company that services the bank that is in charge of facilitating the foreclosure. More connections are made at the hotel bar of a conference than any other place. The great thing about foreclosures is that it’s mainly a 9 to 5 job. Another good thing is that the sellers don’t have much emotion involved. Like any niche, this takes a lot of time to get a foothold. Asset managers like to have agents that are detailed oriented and can fill out a proper BPO (Broker Price Opinion.
6. Property Management in Austin
I am extremely biased about this being an awful choice for a real estate career, but that’s because I did it and barely survived. I’m not going to go too much into this because I am so biased about this being an awful idea that I may not be the one to get advice from. I will say something that I don’t think is biased - a good property manager is usually not a good real estate agent and a good real estate agent is usually not a very good property manager. To be a great property manager one needs to have attention to detail, patience, and have a knack for bookkeeping.
7. Leasing Agent
Being a leasing agent is not the same as being a property manager. In this description of “leasing agent,” I am referring to representing tenants in the Austin area. This can be pretty lucrative and a great way for someone to start off their real estate career in Austin. If you do it wrong, you are very likely to burn out. Homes and duplexes in Austin usually payout on the lower range of the commission scale. But apartments payout on the higher range of the commission scale. I know one leasing agent that rents out ten 10 to 15 apartments a month in the price range of $1,500 to $3,000 a month and gets from 75 to 100% of the first month’s rent as a commission. By contract, a home or duplex pays out anywhere from 30 to 40% of the first month’s rent.
8. Area Specialist/Neighborhood Specialist
Specializing in a specific area or neighborhood in Austin where you live or close to where you live is one of the smartest things you can do. We call this “farming” a neighborhood. But it takes time. I recommend setting up a segment of your CRM and having a specific tag or group (some kind of label where you can keep track of who is on your farm). You don’t have to live in the neighborhood but it makes things a lot easier to sell homes where you live. First, you’re going to want to see what type of market share the top real estate agents in this have. If an agent has more than 15% market share of any given neighborhood, it’s going to be hard to get a foothold in. But not impossible. Our firm has helped our best realtors take market share of a neighborhood with more than 15% using a combination of postcards, social media advertising, and networking events. Also, an agent attempting to do this should host as many open houses as possible, even if they are for homes that are not their listing.
9. Luxury Real Estate
Specializing in luxury real estate is what I would call a broad niche unless you get into the top 10 percent of your market’s price point. It’s also a segment of the market that is extremely hard to get into. That being said, I think newer realtors should strive to get their price-point up as fast as possible. The higher the price point, the less units that an agent needs to sell per year. That should go without saying but I see newer agents attempting to focus on lower price points in order to “get their feet wet” and then take too long to increase their price per unit. I recommend that raising the price point be a focus that agents keep in mind when structuring their yearly goals. We remind our Austin real estate agents at Spyglass Realty to do this when we go over yearly goal planning.
10. Waterfront Properties
The Holy Grail of niches for most markets, especially in Austin. The path to this niche is to start out in luxury house listings and move to waterfront. Like any niche, this is going to require you to know your product and there are a lot of things to know when selling Austin waterfront homes. On Lake Austin, for instance, the water is colder when it goes from the dam at Lake Travis to Lake Austin and gets warmer the further away from the dam it gets. Not all lakefront properties have a constant level of water so some of them will be mud-front properties in times of drought. The most expensive homes in Austin are usually located on the waterfront. If you’re going to specialize in this niche, you’re going to want to get as educated as possible on the product and the vendors you will use to complete the due diligence. You’re going to want the best home inspector that is familiar with high-end properties. And...this is not going to happen overnight.
Posted by Ryan Rodenbeck on
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