Although residential and commercial real estate differ in many ways, I have often found that residential brokers don’t adopt as many tactics from the commercial side as they could. As a result, they fail to take certain actions that could prove to be quite useful to them. Many of these actions are essential in commercial brokerage, and while the same can’t necessarily be said for residential brokerage, the tactics are certainly useful in our business. Namely, specialization and cold calling are two ideas that residential brokers should take from their commercial counterparts.
A common mistake that residential brokers often make is spreading themselves too thin, either geographically by trying to do business in every neighborhood or when it comes to pricing by attempting to be an expert in sales at every price point. The brokers who survive year after year have found an area to specialize in, whether that’s a specific neighborhood, price point, or even just one particular block.
This way, they really get to know the inventory with which they are working instead of trying to do everything and actually accomplishing very little. After brokers close a sale, they should start spending ample time in the area and try to get to know the neighborhood residents and what’s going on with nearby listings and sales. One would be surprised by how small of a geographic area that brokers can make a living off of, provided that they are successful at using such a specialized approach.
As an example, if a particular broker’s goal is to work with first-time homebuyers who are looking for a home under $1 million, this should be the majority of what they do each day. If said broker were to receive a request for a $3 million home, the prudent action would be to resist the urge to be greedy and to present it to a senior broker at their office and suggest joining forces. This way, someone who knows that price point well (because it’s their specialty) would be able to help out, likely meaning that the deal would be closed faster and in a more favorable manner for all parties involved.
It can never hurt for a broker to stir up curiosity about home sales in a neighborhood in which they work. Making friends and acquaintances as well as ensuring that people in the community simply know your name can only help your cause of receiving more listings in the future. Brokers should determine the key players in the community as well as what grievances people might be nursing by asking open-ended questions.
Another tactic from commercial brokers that I find to be applicable to the residential business is cold calling. Brokers should cold call owners within their specialized area, even if just to say that a new listing has become available nearby. The importance of being comfortable talking to people, both on the phone and in person, is unparalleled in the world of residential brokerage.
In urban markets where apartment buildings are the norm, it’s amazing how many sales have been closed just by a broker with an available listing having the foresight to knock on a neighboring door and asking the current resident if they’d like to expand their unit. When making a cold call, one should never just state that they’re a real estate broker. Rather, they should have a well-crafted pitch of three sentences or less about their specialty.
Just as senior commercial brokers encourage their juniors to study up on their chosen area of focus, I also advocate a similar approach to build knowledge within my brokers that if done right, has the potential to set them up for a stellar career in sales. Likewise, confidence when speaking with people that one may not know very well is an enormously helpful skill to have for both commercial and residential brokers alike.
Adam Frisch is managing principal of Lee & Associates Residential NYC, the first residential division of the national Lee & Associates brand.