This week, we continue the descent into Geekery that marked my last two columns. We looked at recent sales and pricing results for the three WilMa neighborhoods, as well as for nine select neighborhoods of interest nearby.
I want to change the gears a bit next.
When you are a new Realtor (or even not-so-new), there is one thing you will hear constantly from the typical managing broker, from successful Realtors, and from every real estate trainer out there:
“Get the listing! Get the listing! The listing is everything! You can only make money in real estate as a listing agent! Do whatever you have to do to get the listing! Don’t come back to the office without a listing!”
That said, you would probably think there were some super-dominant listing agents out there in some neighborhoods. People with laser-like focus and tremendous reputation who “own” certain areas, who are perhaps considered the “preferred Realtor of the neighborhood.”
So let’s look at the numbers.
I looked at all the single family home listings in the Multiple Listing Service data for the last two years, in those same 12 neighborhoods we’ve considered over the past two columns. The attached table shows the results. (I included listings that are currently active as well as those that expired over the last two years, whether through sale or for some other reason.)
Let me make some observations.
First, if you consider the aggregate share of listings, none of the neighborhoods has a particularly dominant Realtor. Further, none of the neighborhoods have a cluster of five top Realtors with aggregate market share of over 40 percent. In other words, the market for single family home listings in all these neighborhoods is essentially totally fragmented.
Finally, look at that last column. In every neighborhood, there were well over 100 Realtors who in the study period had at least one listing in the neighborhood in question. (Typically, it was exactly one listing.)
So how do Realtors make money? Well, many do take listings for condos too, and in more than one neighborhood. (Now, how much specific market knowledge some have about multiple neighborhoods and property types is another matter.) Also, being a listing agent affords you an opportunity to get “both sides of the transaction” (to be the buyer’s Realtor also and thus earn all the transaction commission). And having your sign around is great personal marketing; you then get calls from potential buyers to whom you can sell other properties.
Bear in mind, though, that only about 50 percent of listings actually sell during the contract period. Perhaps that should be a topic for a future column!by