Environment

Analyzing your environment includes surveying all the players in the marketplace. That of course includes your potential customers and your competitors. You should also consider all the trends that are reshaping your marketplace. Demographic trends are an example—perhaps your area has become "hot" and singles are moving into condos or row houses in your area, or perhaps children have grown up in many families, creating new empty nesters who are moving, leaving large homes vacant and available. Such trends are valuable information as you try to facilitate transactions in your market.

In real estate, the Environment Analysis also includes an in-depth examination of all the facilities and institutions in your geographical market. People moving into an area want to know about the schools—where they are and their quality—and about shopping and restaurants, parks and recreational areas, entertainment, hospitals, transportation, and the government.6 The well-prepared agent should be able to answer any of those questions.

The successful real estate agent knows his or her neighborhood very, very well.

CMA stands for "Competitive Market Analysis." You can examine the sales that have taken place in your area over time and the sales that did not occur and acquire the expertise to evaluate the worth of any home or property. When you are dealing with a seller or a buyer, you should be able to quote to them comparable transactions, including details about the characteristics of each home as well as the financial terms. The importance of such expertise cannot be stressed too much. It is key to persuading both buyers and sellers to have reasonable expectations and therefore increases the chances that a transaction will take place.

You should gather the general information you need for CMAs during the Situation Analysis. When you are working with a seller or buyer, you will develop a CMA that is more specific to the needs of that seller or buyer.

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