Ideal Clients: To Niche Down or Keep an Open Mind

When you are just starting out in any business, it’s easy to take whatever clients come your way. This is particularly true in real estate. The world of real estate is competitive, and it can seem daunting to only work with specific clients when you’d like (or need) to work with anyone. Depending on your situation, we’re giving you tips on whether to niche down or keep an open mind when it comes to your ideal clients.

Keeping an Open Mind

In the beginning, your real estate business is probably going to have a brand that appeals to as wide of an audience as possible. While it is time-consuming to engage many different types of people with your business, it also allows you more freedom when it comes to working with budgets and properties in all different price ranges and locations.

Particularly when starting out, working with a variety of clients can be very beneficial. You learn the desires of different types of clients, and you gain invaluable experience working with various neighbourhoods and property types. When you learn on-the-job skills, you become more marketable to the higher-end clients!

Niching Down

There will come a point in your business when trying to cater to everyone becomes exhausting, overwhelming, and non-profitable. When you find yourself at this point, it may be time to figure out who you want to work with.

Generational Client Types

There are three major categories of homebuyers in the current market when it comes to generation-based clients.

1. Millennials are the largest base, with 37% of all homebuyers in Canada being ages 21-38*. A majority of these buyers, particularly those under 30, are first-time home buyers. This means they are looking for a solid property to settle down in and possible start or continue building a family. The median prices for the properties purchased by Millennials range from $177,000-$274,000; the younger the home buyer, the lower the price of the home.
2. Generation X, ages 39-53, is a close second in the home-buyer market. Generation X typically has the highest income range as they are in the prime of their careers and have most (if not all) of their debt paid off. These potential clients are looking to upgrade their homes, and are very likely to still have dependent children living at home. The median home price for Generation X buyers was $277,800, although they have far more higher-end purchases than the Millennial generation. Nearly 17% of Generation X-ers purchase homes that cost above $500,000.
3. The third generation of home buyers is the Boomers. Although they are lumped into one generation, the home purchasing trends for younger and older Boomers are very different. The Boomers on the younger end at this stage, which make up 18% of the buyer market, have higher household incomes as many are still working and have very little debt. They typically are purchasing a home to be closer to friends and family or because they relocated for a job. The older Boomers, coming in at 14% of the buyer market, most often move because they are searching for a retirement/vacation homes, or at the benefit of one partner or the other’s health. The older half of Boomers tend to know exactly what they are looking for and really buck compromising on their must-haves in a home or neighbourhood. Regardless of if they are older or younger, the Boomer price tag on their new home sits right near $250,000.

The best news for real estate agents? ALL of these generations still prefer to use a real estate agent or a brokerage for their home buying needs. This means plenty of opportunities for you to establish yourself and spread the word about your business. Although narrowing down an ideal client by generation still leaves you with a very wide pool, you can think through how well you connect with different generations and use it as a starting point!

Questions to Ask Yourself

Writing down your ideal client qualities can help, but you probably won’t find many that fit all of your criteria. Instead of getting too specific, clarify a few big parameters when it comes to niching down. Write down your answers to these questions to help you begin targeting your business toward a specific clientele.

Where is the highest market-need or availability in your area?

Research is key to developing your niche. You want to choose an area of real estate that you can have success in. If there are very few condos coming up on the market, or a very low need for single-family homes, do yourself a favour and avoid setting up a niche for those types of properties. This doesn’t mean you should NEVER take on a listing or client who falls outside of those parameters but don’t try to make them your targets.

Do you prefer to work with buyers? Sellers? Investors?

Again, just because you focus on one doesn’t mean you can’t and won’t work with the others. It’s simply easier to establish yourself as an agent for X as opposed to doing the work of marketing to all three.

What budget or market prices do you work with?

There are pros and cons to all answers to this question. If your client is searching for an extreme on either the high or low end, the market will be less competitive. With a higher budget also comes a higher commission. However, a listing or budget that is in the middle-range often means the person is ready and willing to close the deal.

What is your ideal client’s living situation?

This is an important question to answer as you begin strategizing about which areas to look into. Does your client have children? Familiarize yourself with homes near schools, parks, and safe neighbourhoods. Is your ideal client young, single, and focused on living in the middle of the action? You’ll be searching for downtown apartment and condo properties. The research you do once you answer this question will be important to branding and marketing your business.

How much flexibility are you willing to give to your schedule and availability for clients?

Some clients want an agent who is available at all hours of the day. Some clients just want occasional support as they begin their property search. Although as a real estate agent you will need to be as available as your client needs, there are some client types that will be higher-need than others.

When you get your target market decided, you’ll be ready to revamp your branding and your marketing strategies. We have created a digital marketing program just for those working in the real estate business. From managing your social media presence, assisting with newsletter design, setting up your CRM and more, The Nimble Agent is an all-encompassing program to push you to the next level. We’d love to help you develop your presence in the real estate world and implement our tried-and-proven strategies to better your digital reach. Send Kara, our founder, and chief digital strategist an email at kara@mcmasterdigital.com or schedule a 15-minute discovery call when you’re ready to dive in!

*All statistics and percentiles come from the 2019 Home Buyers and Sellers Generational Trends Report developed by the National Association of REALTORS® Research Group (link to report)