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August 30, 2014

Four Ways to Understand Your Competition

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Four Ways to Understand Your Competition

Experienced real estate professionals know that one of the keys to a successful sale is the ability to clearly define and understand the competition, according to Bob and Donna McWilliams, two practicing real estate agents in the Annapolis area.

They explain that selling houses does not really differ that much from selling any other good or service, in that those who do not have a full and objective assessment of the competitive framework will not be able to effectively position a product in a manner that will motivate buyers. 

With respect to real estate, they provide several tips on how to size up the competition:

  • When defining the competition, it is necessary to take a step back and be totally honest about any and all homes buyers will see as similar to the client's.
  • Sellers should never try and play out of their league.  Buyers will see the property as inferior to the competition and your ability to sell will be severely damaged. 
  • After the competition has been defined, the next step is to figure out how much of it is out there. The basic rules of supply and demand dictate that when demand is low and supply is high, prices will either fall or remain stagnant. 
  • Don't make assumptions. Agents should select the appropriate geographic area, use a price range that is plus or minus 10 percent of the home's anticipated price, and show the client how many homes fit those criteria, along with the rate of sale.

"The Realities of Real Estate: Understanding the Competition," Capital Gazette (Oct. 6, 2012).

© Copyright: Information, Inc. 2012