Join the exceptional and become a Sotheby’s International Realty agent.
To be successful in luxury real estate, agents need to keep up to date with a lot of information. Customers look to you for information on every facet of the transaction. Understanding and using data is a differentiator — and according to Michele Schuler and Neda Perrina, a team of leading agents at Realogics Sotheby’s International Realty in Seattle — it doesn’t have to be difficult.
“Given my background in finance, I find data incredibly empowering,” says Schuler. “I have always been data-driven and rely on it to confirm key decisions such as the price of a home, when to list it, what to offer on a home for sale and when a discount price may be required.”
This inspires confidence in their customers. “They know that we don’t take our cue, but instead rely on years of data and our experience,” adds Perrina. “Data is a fundamental tool that allows me to become my client’s trusted advisor.”
Data every agent needs to know
As Schuler and Perrina explain, there are six key data points that agents should always be aware of, whether they are representing a buyer or a seller:
- The absorption rate (based on pending and closed sales)
- Months of inventory available
- Average days on market
- The List: Sale Price Report
- The average cost per square foot
- Appreciation rates (specific to each market you work in)
“With the aforementioned data in hand, ask yourself what trends you see,” says Schuler. By starting with these six key considerations, you provide your client with a comprehensive overview of a home’s value and how best to handle an upcoming transaction.
Market surveillance matters
“Real estate is a business, and we should treat it as such,” notes Perrina. “A business-driven mindset means quantifying as much data as possible, which can give us leading and lagging indicators of where the market might be headed. Failing to monitor statistics and trends will potentially result in the provision of wrong advice to customers.”
To that end, Perrina and Schuler highlight additional measures that can have a tangible effect on house prices:
- Interest rate trends
- Construction costs in your area
- Commission rates in your separate markets and price levels, and your average personal commission per sale
“Knowing the relevant commission rates can help you with competitive marketing or help you protect your commission through a buyer agency agreement in a market where sales office commissions may be falling,” says Schuler.
Follow the big picture
Once agents have a good understanding of local inventory data and market conditions, Schuler and Perrina encourage them to extend their analysis even further. “We should be constantly monitoring trends from every angle we can think of — marketing, demographics, interest rates, global challenges, economic disruptors — and how these interact with each other,” Schuler says.
Here are five areas to pay attention to:
Demography: How are the age and income levels of my audience changing and how will this change impact my market? “Do my marketing tools align with demographics?” said Perrin. “For example, do I need to make a change to appeal to millennial or Gen Z shoppers?”
Employment data: how many new jobs are created compared to new housing starts? What impact could this have on supply and demand?
Consumer resources: where do buyers and sellers find their real estate agent? “I like to align my marketing efforts to reflect the sources consumers use to connect with an agent,” says Schuler.
Buying trends: what are buyers looking for in a home and how has that changed over time?
Movement: How many people are entering or leaving your market area, and where are they coming from? “Knowing this helps me tap into referral networks in major food markets to facilitate these moves,” says Perrina.
“We also need to assess competitive threats, new business models and trends in the real estate industry that could impact our business,” adds Schuler. “And, of course, we should pay attention to future real estate trends to help inform and guide our clients.”
Identify reliable data sources
If that sounds like a ton of information to unpack, don’t worry; the important thing is to build up a stock of reliable resources that you can return to regularly. “I use all of the data collected and provided by local raters, Trendgraphix, Case-Shiller indices, various automated valuation models, and demographic tools. It really comes down to everything I can get my hands on,” says Perrina.
Find reports that address your market, such as MLS in your area. “Don’t be afraid of data! Schuler said. “He can be your lawyer. This will legitimize the information you share and give you credibility as a trustworthy advisor in buying or selling real estate.