Research Project Sample

MARK 4378.60
Spring Semester 1998
Market Potential Study Plan
For Real Estate Sales Branch Office
in the South most Area of Brownsville, Texas.
By C. Frank Wood (86-3396)

Executive Summary

Jokl-Wood & Associates Reality, Inc. is a Brownsville firm that offers a variety of real estate services. A few of the
services that JW&A offers include, both buyer and seller representation in the sale, purchase, or lease of real property.
JW&A was organized as a corporation almost ten years ago. They currently have ten licensed real state salesmen or
brokers in their office, as well as property Management Company known as BREMCO (Brownsville Real Estate
Management Company) on site.

Reality, Inc. is interested in knowing if the south most area of Brownsville can support a possible branch office. The
real estate firm is well established in the other areas of the city, but feels that the South most area has a growing
potential as a source of other business. The only main limitation of the expansion, and the study, is the fact that the
South most is predominantly Spanish speaking and traditional with regards to the buying and selling of a home. The
language barrier would require that any business conducted out of a branch office in this area be conducted in Spanish;
therefore, a real estate salesman located in this area would need to be fluent in Spanish. The traditional factor of the
South most area is that people tend not to trust outsiders, especially with their homes and money. In order to be
successful in this area, the real estate salesman would need to gain the trust of the people he or she will be dealing with.

The analysis of the market through this market study plan is crucial in determining if JW&A should in fact open a
branch office in the South most area. If this study determines that there is no potential for a market to sustain a branch
office, no expenditures should be made. However, if the study proves that there is a potential for a sustaining market,
Jokl-Wood & Associates should consider further investment into more in-depth research of the area.

Statement of the Problem

Is there a market in the South most area to sustain a real state sales branch office?

Purpose of the Study

The purpose of the study was to conduct an exploratory probe to determine if the results of a market study sanction
further research. The study surveyed a proportion of the residents in the South most area, and the results of the survey
will determine if they are able to sustain a real state branch office.
Secondary Research

The collection of data related to the real estate industry was necessary in determining the proportion of the total
population in order for the study to warrant more research. This data was gathered through the current real estate office
of Jokl-Wood & Associates Reality, Inc., and the U.S. Department of Commerce, Bureau of Census. The information
gathered was used to develop a break-even analysis and determine that only 5% of the South most area is required to
take advantage of real estate services in order to make the study successful.

Research Question

The research question to be answered in the study is the following:

Are there enough people willing to take advantage of real estate services in the South most area?

Research Design

The study was conducted using a personal door-to-door survey method of the residents in the South most area, as
defined by the census tracts collected during the secondary research stage of the project. The survey will answer the
following investigative questions:

• 1) Do residents of the South most area take advantage of real state services?
• 2) Is there a trend in the South most area leading to the use of real estate services?
• 3) Do people rent or own?
• 4) How long have they move?
• 5) Do they rent, lease, buy, and/or sell their property on their own?

Sampling Plan

The survey was designated to use a stratified proportionate random sample. The scope of this survey is to gain data
from a sample of the total South most area population. This sample can then be used to make assumptions regarding the
total population in this area of Brownsville, and warrant further investigation if needed. The sample will be a
representation of the 24,680 persons living in the five census tracts (133.02, 134.02, 139.01, 139.02, and 139.03) that
constitute the South most area of Brownsville. The calculated sample size, utilizing a 95% confidence level and an
acceptable sampling error of 5%, will be 52. This is a relatively small sample size due to the calculated data from the
break-even analysis performed that states only 5% of the South most area population needs to take advantage of the
real estate services offered by the branch office in order to make the expansion feasible. The actual number of surveys
conducted was 54.

Z= 1.645 n= Þ(1-Þ){Z/E}2
E= .05 n= .05(1-.05){1.645/.05}2
Þ= .05 n= (.0475)(1082.41)
n= 51.41

Instrument (Questionnaire)
HELLO, I AM A STUDENT AT THE UNIVERSITY OF TEXAS AT BROWNSVILLE. THIS QUESTIONNAIRE IS
FOR ONE OF MY CLASSES. PLEASE COMPLETE THIS QUESTIONNAIRE BY CIRCLING THE
APPROPRIATE ANSWER, OR BY WRITING YOUR ANSWER IN THE SPACE PROVIDED.
1. How long have you lived in your present home?
1-5 years 6-10 years 11-15 years 16-20 years 20+ years
2. How many homes have you lived in since moving to this area? ___________
3. Did you locate your home on your own, or you use a real estate service firm?
Own Real estate service firm
4. Do you rent or own the house you are living in?
Rent Own
5. Would you consider using a real estate service firm in the sale of your home?
6. Would you consider using a real estate service firm in the search for another home?
Yes No
7. Are you planning on moving in the next?
1-6 months 7-12 months 13-24 months unknown

THANK YOU FOR YOUR COOPERATION

Because the South most area is mostly Spanish speaking, the survey used will be printed in Spanish. The survey was
tested through a small focus group prior to implementation in the field to determine reliability and validity.

Data Collection

The data was obtained directly from the persons taking part in the survey. All data was received immediately since the
survey was conducted in person. Fifty-four surveys were answered before the data was processed.

Data Analysis

Responses to each item on the survey were tabulated into frequency distribution and cross tabulation tables in order to
obtain descriptive statistics. The descriptive statistics show the relationship between the instrument questions and the
data itself. SPSS was used to develop data analysis.( Data analysis and Tables will be supplied upon request)
Prior to the beginning of the data collection a break-even analysis was performed for a real estate branch office
consisting of one real estate sales agent. The break-even analysis showed that only 5% of the total South most area
population needed to use the services of that office. Therefore, in order to warrant future research, at least 5% of the
respondents must indicate that they will take advantage of real state services in the future, whether buying or selling
their home.

Results

The results calculated from the data collected during the survey indicate that there is a greater than 5% usage rate of
real estate services in the South most area. The findings indicate that more than 5% of those surveyed that own home
will use real estate services to sell their home and more than 5% of those people surveyed will use real estate services
in the search of a new home, whether renting or owning. This would signify that further research needs to be
conducted.
 The survey results indicated that 38% of those that own their home in the South most area would use the services of a
real estate firm in the sale of that home, and that 61.1% would take advantage of real estate services to search for a new
home. The proportions gathered are tested bellow to ensure that the sample percentages are in fact greater than the 5%
required of the total population.

Owners that will use real estate services to sell their home:

Null Hypothesis; Ho: p is less or equal to .05

Alternative Hypothesis; Ha: p is greater than .05
Level of confidence = .05
Z critical value = 1.645
Sample Size. n =54
Sample Proportion p= .389
P bar for hypothesis Þ= .05
Z obtained from the sample = 11.43
Decision: Reject the null hypothesis because the calculated Z value (Z=11.43) from the sample results on the
proportion of owners that will use real estate services to sell their home is greater than the critical Z value (Z=1.645).

Renters and owners that will use real estate services in the search for a new home:

Null Hypothesis; Ho: p is less or equal to .05

Alternative Hypothesis; Ha: p is greater than .05
Level of confidence = .05
Z critical value = 1.645
Sample Size. n =54
Sample Proportion p= .611
P bar for hypothesis Þ= .05
Z obtained from the sample = 18.92
Decision: Reject the null hypothesis because the calculated Z value (Z=18.92) from the sample results on the
proportion of owners that will use real estate services to sell their home is greater than the critical Z value (Z=1.645).

Incurred Costs

Interviews 5 hours x $5.00/hour $ 25.00

Questionnaire Development 10 hours x $25.00/hour $ 250.00
Questionnaire translation 2 hours x $20.00/hour $ 40.00
Questionnaire production 60 surveys x $ 0.15/survey $ 9.00
Equipment and supplies $ 50.00
Conducting survey 10 hours x $ 5.00/hour $ 50.00
Survey Analysis and
Recommendation 35 hours x $ 60,00/hour $2100.00
TOTAL COST: $2524.00

Qualifications of Researcher The individual performing the research is C. Frank Wood. He is currently a licensed Texas
real estate salesman in
Brownsville, Texas working with the firm Jokl-Wood & Associates Realty, Inc... Frank is a Brownsville native and has a keen
understanding of the city's real estate market. Being a Realtor, Frank has an excellent comprehension of the expanding market
potential in the South most area. Frank realizes that this is a relatively unserved area in the field of real estate services and that
there is a great opportunity awaiting to the firm that establishes itself first in this area.