How Realtors Can Justify Their Commissions? In today’s world of discount brokers competing for your business, consumers want to know how Realtors can justify their commissions. It’s true that full service warrants full commissions, but communicating that critical point to consumers can
be challenging. This month we ask the experts:
“How can Realtors best define their value to today’s cost-conscious consumer?”
Go Beyond the Call
Harley E. Rouda, Jr.
CEO & Managing Partner
Real Living, Inc.
www.RealLiving.com
With gasoline prices on the rise and Social Security on the fritz, consumers are cutting costs at every corner. In the real estate world, the same holds true. Today’s consumer needs reassurance that utilizing a Realtor is worth the cost.
The Benefits
Of the many benefits, three stand out.
First is our guarantee. We don’t make money unless the house is sold. We’ll work our hardest to sell the house for the best price—everybody wins.
Second, we’re full-service professionals. We work with consumers through the entire transaction.
While they continue their day-to-day routines, we provide advertising and Internet exposure, conduct open houses, field calls, screen potential buyers, deal with the paperwork and more. This saves the consumer an exorbitant amount of time and ensures a stress-free experience. Can you really put a value on convenience?
And third, we know the market. With years of experience in this area, we’ve become the trusted market experts. Would you trust your neighbor to do your taxes or your babysitter to fix your car?
FSBO Fear Factors
The past several years have been a seller’s market. Now, with active listings at record levels and interest rates on the rise, we are transitioning into a buyer’s market, making it more difficult for sellers to get the best price. But regardless of the economy, few want to gamble with one of their most valuable assets.
Road to the Top
How do you stand out among the thousands of other choices? Show ’em what you’ve got! Real Living consumers enjoy the convenience of our in-house lender, title, relocation and warranty services.
It takes more than a yard sign and an MLS listing to sell your home in this market. Serious buyers and sellers can’t afford to take chances—this is a business about people.
Agents Are Worth Every Penny
Steve Damman
President/CEO
QuantumMail.com, Inc.
www.QuantumMail.com
Statistics don’t lie: home sellers who go the FSBO route sell their houses for less and take longer to sell them. In 2004, the average FSBO house sold for $163,800 versus $189,000 for agent-assisted sales.
You know the advantages of using an agent, but how do you convince sellers?
Would-be FSBO sellers often underestimate what’s involved in selling a home—like giving tours and holding open houses, not to mention marketing, negotiating price, and navigating paperwork. Many FSBO sellers overlook the fact that selling their own home limits their potential buyer pool.
When showing homes, do your agents include FSBO properties? Chances are, FSBOs don’t even register on an agency’s radar, either because the homes aren’t on the MLS (or advertised anywhere but the homeowner’s front yard), or because FSBO sellers don’t pay commissions. Bottom line: FSBO houses get less exposure than homes represented by agents.
Here’s one way to showcase the value of agents to sellers: create a direct mailer highlighting the unique benefits of retaining agency services. Drill down to what separates an agency listing from an FSBO listing—and be specific.
Anyone can claim to “sell homes quickly.” What is an agent’s unique selling proposition? It could be staging clients’ homes for a faster sale or complimentary marketing through flyers and classified ads. Since time is a hot commodity, stress an agent’s willingness to show homes on short notice and to hold as many open houses as necessary.
Do you have a large network of agents? Are they expert negotiators? What about expertise in legalities? Once someone hears the case for using agents, going FSBO is not even an option.
Even do-it-yourselfers can sell a house (eventually), but when it’s all said and done, will they think it was worth it? You know the answer; after all, statistics don’t lie.
Promotion is Critical
P.J. Martin Smith
Senior Vice President of Marketing
ERA Franchise Systems, Inc.
www.ERA.com
Real estate professionals can best define their value to today’s cost-conscious consumers by promoting everything they actually do on behalf of their clients. Because so many consumers only see a small portion of the work, they only perceive a portion of the true value our profession offers home buyers and sellers.
We need to follow the example of other industries and do a better job of educating consumers on the service and expertise we provide. You don’t see too many people underestimating the importance of healthcare professionals or accountants because the value of these services is clearly understood. We need to show clients exactly what is being done behind the scenes. As consumers begin to better understand how much time and effort goes into selling a home, they will begin to value the services of a real estate professional more and more.
When talking with potential sellers, we must show how we have helped clients sell their homes faster and for greater profit. It’s one thing to tell a consumer you have an expertise but it is another thing to show it.
We also need to show exactly what we do to market properties that sellers can’t do on their own. We can start by explaining the advantages we offer by placing their listing on the local MLS, national Web sites and referral networks and by utilizing our network of past clients and colleagues. We must also let sellers know that our job doesn’t end once they find a buyer for their home.
Today, we also need to show potential buyers that we offer more than just access to an inventory of available listings. With the number of Web sites out there today, buyers no longer need a sales associate for that purpose alone. Instead, we must show how our expert knowledge of the local community can be an invaluable service in helping buyers find the ideal home for their needs.
Finally, we need to better promote our role as a consultant throughout the buying process—from providing pricing information on comparable properties to ensure buyers don’t overpay to walking them through all the paperwork and activities they must complete to close on a new home.
The better we get at explaining the level of service we provide, the easier it will be for cost-conscious consumers to see how invaluable working with a real estate professional can be. |
