Commission & Value
There is an agent that I work with and once in a while i see a Listing Agreement with a 7% commission come thru my desk !!! and the way he does it its by how much Value there is in selling with him. Here is what i know, If you can prove upfront that you add more value than other discount brokers, the seller will not question your commission. Agents ask, “How do I handle sellers and get my full commission and fight against a discount brokers?” Well First we have to be aware and realize that your real estate services are based on value.
In other words, look at it this way: Why do people pay more to stay at a Ritz Carlton versus a Holiday Inn? They’re both hotels but yet when we check into the Ritz we don’t expect to get our room for the same price of the Holiday Inn. That’s because, the Ritz Carlton has already established the value of what they offer. Agents you need to do the same thing. Of course if you check into a Ritz Carlton, you have certain expectations, valet parking, carry your bags, concierge service, people who wait on your every need, etc. But if you check into a Holiday Inn, you realize that you park your own car, carry your own bags, make your own entertainment plans, and taking care for your own needs. But it is clearly a different experience and Real estate sales is no different. Do your clients want to “watch for themselves” during the sale of their home? Probably not. But they may not realize what this means. That’s where you come in to show seller the benefits.
While a discount broker may offer to sell someone’s home for a lower commission, chances are there’s little value offered.
Will Discount Broker do the following:
- Meet other Agents at property when showing their buyers to help sell the home
- Meet Buyers Home Inspector and make sure everything goes good
- Meet Termite Inspector
- Pay for hotel during home fumigation
- Meet other inspectors requested by buyers
- when offers come in will they investigate if buyers qualifies and call lender to verify or cross qualify with own lender and have experience to scrutinize offers that come in.
- Have Skills to Negotiate highest possible price
- know how to Generate offers asap
- meet the appraiser at the home
- know how to Hold Successful Open Houses/Broker Opens
- Pay for Staging Home and other perks
- Sale Price guarantee
- closing day guarantee
- research and find comps to help the appraise
- Will the discount broker dig deep into a “comps” with a lower sales price and why
Identify Your Value and you also need to differentiate yourself from the other agents. Some things to consider that may set you apart could include:
- The years you have been in real estate/experience
- Do you have any designations, such as GRI,ABR, CRS, etc.
- Do you speak any other languages
- Do you specialize in a particular type of listing, such as the luxury market, condos, or beachfront properties
- Have you taken any specialized classes, such as negotiation
- What is your personal internet and social media strategy
- What is your local marketing strategy
- How often do you communicate with your sellers
- What do you do to know what’s taking place in the market
- What websites do you subscribe and syndicate to
- What services do you pay and subscribe to? coaching, mentoring etc
- what Boards or memberships to you belong,pay, or subscribe to?
- Our E&O Insurance coverage/sellers insurance policy cover seller in lawsuits
- Expert in Forms and Disclosures to protect seller from lawsuit
- work with investors from Japan,Mexico,Canada that want to invest in the more stable US market
- the WOW factor- see other article
No matter who you are or how long you’ve been in real estate, there are things you do that enable you to stand out from other agents. Pinpoint the uniqueness of what you offer and highlight it and magnify it. Remember that commission are not based on price. It’s based on the unique value propositions of yourself. The more you differentiate yourself from other agents the more value you’ll be able to offer your sellers, the more commission you generate. With your value clearly defined and communicated, commission should not be an objection again !!!!
Please share your ideas or Comments below 🙂
…another way to prepare yourself to Attack the Market !