A niche market is a subset of the market on which a specific product is focused. The specific product features are aimed at satisfying a specific market need, as well as a demographic that is intended to impact. In residential real estate, the specific product feature is usually a short sale. Most clients are in distress situations and need to settle a debt. So the market need is addressed through the disposition of property. Short sales have advantages to the buyer and seller. The seller is advantaged by releasing all liens and debt associated with the mortgage. However, the seller cannot benefit financially in the sale of their property. The seller will receive a deficiency waiver which will release them from any further mortgage obligations. The seller is usually not concerned with the price of the home because the waiver washes the deficiency. This allows the property price to be set at street value which is usually a below market price for the buyer.
Using Probability to Select Niche Groups
In other cases transactions will occur from quality of life changes, diversification of assets or occupational necessity. All 7D Theory classifications are specialized niches. However, it is important to concentrate on a buyer or seller niche that has a higher probability of success. For example Essential Service Groups refers to a class of occupations that are a necessity for the maintenance, safety and preservation of a city, county or region. These groups are chosen as a focus to farm real estate buyers for three main reasons. First and foremost, these services are vital to communities so employment in these professions is more stable and not affected by wild economic swings. Secondly, there is more job security in these positions an employment tends to be longer termed. Thirdly, this employment is local in nature so these jobs tend to keep employees in the same area for extended periods of time. Some of these professions include first responders police, firefighters, EMS, teachers, administrators, social workers, healthcare, and the military. The 7D Theory focuses on larger buyer pools of buyers and sellers that have a specific need to transact real estate.