“What gives you the right?”
Today’s consumer is asking this question, and companies outside of our industry are answering the call.
What gives you the right to charge the commission you charge in this business?
Some agents are worth every penny they charge and more. Others don’t bring enough value to the transaction and, therefore, aren’t deserving of a significant commission. The problem is that the consumer has a lot more experience with the mediocre than the exceptional.
In this world of discounters, disruptors and deal-seekers, it’s on us to change the narrative. The only way to do that is to get better at our craft and then learn to communicate our true value proposition to today’s buyers and sellers.
Let me start by posing a few simple questions to think about:
- What can I do differently to justify the commission I charge and actually be worth it?
- What would my promise to my clients have to be?
- What would my level of service have to encompass?
- What impact would I have on the lives of my clients?
- What must I do today to provide this level of service?
The reason Zillow and others are successfully inserting themselves into transactions is because they’re listening for the answers to these questions and then giving clients what they’re asking for. I’m convinced that if we truly focus on how our clients’ lives will be changed, we’ll find success. Consumers today are looking for instant information, ease of transaction and transparency throughout the process. If you’re fearful of becoming irrelevant in the transaction, then ask yourself the above questions and really think about the answers. What do you have to offer that makes it worth what you charge for your services? This question could be asked by agents, broker/owners, brands and associations.
If I’m making you uncomfortable with this article, I want to apologize…but not really. I love this industry and the amazing people in it, but I strongly believe that if we’re going to continue to hold our value, we have to shift our messaging, enhance our level of service and increase transparency in the transaction. The words we use matter, but our actions—before, during and after the transaction—matter even more.
I challenge each of you in your position as agents, broker/owners, brands and associations to build your business with a concierge level of service. Listen intently to your clients’ needs and then determine what you can do to have the greatest impact on their lives. Let’s build brands, teams and services that outsiders can’t compete with. It’s time to stop talking about differentiators and deliver them instead. Create your unfair competitive advantage by delivering a higher level of service that allows you to dare to charge a high fee.
Verl Workman is the founder and CEO of Workman Success Systems (385-282-7112), an international speaking, consulting and coaching company that specializes in performance coaching and building successful power agents and teams. Contact him at Verl@WorkmanSuccessSystems.com. For more information, please visit www.WorkmanSuccess.com.
Great article, Verl!
Love this article! It speaks to the industry so well. Getting prospects to trust you by showing quality value will only yield results. I will delve deeper into these questions to promote my level of service. Thank you!
Its not enough that our basic industry has to deal with Zillow and Ibuyers we now have to deal with our own non Ibuyer Agencies becoming greedy and non-ethical. For instance, my cross sale with a well known agency was not transparent about the split and I found out only when I received the ALTA did I find out that the Agent took 3.5 and gave my Firm 2.5. When did we start feeding on each other with lack of respect for our fellow Agents and diluting the ethics of our industry.
After reading this article, I felt the need to make this my first response to reading any of the articles I’ve read.
I’m addressing #2. First NEVER promise anything you cannot keep. I put mine in writing and sign it. then the seller the option to cancel if I do not comply. Hopefully, if ever they have a concern (not a complaint at this point), I discuss what they think I’m not doing. 99.9% of the time it works out and we continue.
I think the other questions that were asked are within my response.
I’ve been in the business for 40+ years! So I must be doing something right and never a Board complaint against me or even questioned.
Just be honest and treat people the way you want to be treated, even if you get the grouches. Remember you are looking for a paycheck. Go with the flow unless you feel you are in hamrs way.
Next, my level of service includes negotiating the contract, making sure all timelines are adhered to, attending the home inspection with continued updates throughout till settlement. There are many additional steps in between and hopefully, most agents that read this know what those are. I continue well after settlement with any concerns or questions that come up and even problems. Staying touch with YTD sales reports for the previous year, recipe cards and periodic phone calls.
This comment may be coming from a, small scoped, individual perspective. So please know I do not “have it all figured out” but what one could see as diabolical about zillow is that they’re disrupting (or making a ‘full steam’ trajectory to disrupt) REALTOR’s industry while being funded BY REALTORs. The hand that feeds zillow could easily be seen as being bitten if one took second to examine it. As the mass consuming public, which zillow makes such focus to provide for, are the ones that don’t put a penny into zillow. Amazing how disruptive zillow & the like have been, too, namely because professionals on the ground usually put in the extra work to undo perception the public has as to the value of their property, etc. Not to mention clearly feeling overstepped when the public simply zillows information (as inaccurate as it is) and lists by owner where they’d traditionally depended on local, licensed , professionals. It costs a lot to be a full-time REALTOR. It’s a career choice for many. And is easy to feel threatened by such disruption especially when it caters almost exclusively to those whom do not fund it. And said disruption works so starkly against those that DO fund it i.e Agents that try to gain promotional exposure from it by paying the steep premium to do it. A strange dynamic indeed. One would expect NAR to rally raised awareness campaigns in effort to shine a light on zillow’s wide spread agenda resulting in disruption, etc, etc, and it’s potential impact if complacency continues. For Member’s sake.
The problem, or challenge, for agents is that they are judged by clients before the agents have a chance to perform. So the agent tells the client what he/she is going to do and how great he/she is. It’s like a guy sitting on the edge of a bed with his female friend and tells her how great of a lover he is. This is a tough one, but one solution to this credibility problem is to give the client a list of ways the agent will bring the most value and earn a commission, then perform accordingly.
Verl, most Brokerages control how much an Associate can charge. The Associate does not control that, in fact offering a lower commission to a Seller requires approval by the Broker and usually includes that the “normal” commission, i.e. 3% will still be paid the Selling Broker with the Listing Broker and Agent “taking the hit”. Otherwise, agents with other companies may not show/sell the property. Things may be different in each State and each Company may have their own rules about this but before advising an Associate to “cut their commission” you should advise the agent to consult their Broker before making promises to a potential Seller.
Well said! The issue that we may be facing has more to do with the image that has been portrayed with Cable network series such as, Million Dollar Listing, showing that Brokers have expensive, cars, jewelry, homes and lifestyles, feeding into a narrative that a real estate agent lives a glamorous lifestyle. Not true for 85% of the agents that I know here in NYC.
There are those of us who take this business very seriously, and some that think they are ready just because they got their real estate license. I do not pretend to know everything about this business, but I do go over and above to help my clients. I have spent a lot of time and money to educate myself to first and foremost, better service my clients by obtaining my broker’s license and several designations and certifications. Not for the acronyms on my business card, but for knowledge. Continuing education is not a “must do” for me every year, but rather an opportunity to become more knowledgeable to better service my clients. Now, I am the owner of my own brokerage and I teach my agents to do the same.
It is disheartening to realize that we now compete with the very companies that we considered partners in the past such as the Zillow’s, Redfin’s and other public sites that depended on us as real estate professionals. Having bought into their schemes early on in my career of buying lead generations which they “vet” for you. . .right. . . I refuse to buy into this conundrum anymore. I refuse to pay money to the very companies that are trying to put me out of business. Seeing ads like the one HomeLight runs on TV saying they refer the best agents for you. This make me sick. Really? They never meet the agents they refer. Who they are referring are the agents that are willing to pay them part of their hard earned commissions. It’s not based on professionalism or performance. . . it’s based on the almighty dollar.
At one point, I had one of the major websites tell me, “you will own X % of your market’s advertising for this amount monthly”. Shortly afterwards, there were several “new” agents appearing in the searches taking my percentage of presence. They don’t tell you that, nor do they reduce your monthly fee when they add more agents to your market area you are paying for.
As an industry of professional Real Estate agents, we need to wise up to these companies looking to put us out of business. If you don’t have time to deal with your clients directly or market yourself directly, then you need to consider another career path.
Here is a suggestion, promote your local MLS public website for clients to search on. And yes, they are a lot more accurate in their information as well. Our MLS has a public website home search and I use that link on my own company’s website for home searches for clients. Your local Association of Realtors and MLS is your best friend to help you grow your business.
Send clients listings yourself by setting up searches for them. Educate your sellers on the market, do frequent CMA’s for them. Don’t be scared to tell a client something they need to hear instead of what you think they want to hear. Your are a professional and if you do your homework, you will be right. This is what will set you apart from “one stop shopping” companies looking to replace you and also justify your pay!
My advice, take as much education as you can. The more you know, the better you can service your clients. I tell everyone I work with, I learn something new on every transaction I close, and even do not close on. Want to help yourself. . .there are a lot of designations out there that can educate you and help you control the fee you charge. That’s what gives you the right!
One of the main things hurting our industry is the ease of getting a license and no requirement that the agent have a mentor. Brokers misleading new agents into thinking that they will be making plenty of money within 3 months. We have turn and burn in our industry so you have a constant supply of inexperienced agents, many with minimal training. It is very hard for new agents to provide great customer service when they don’t know what they are supposed to be doing and freaking out because they can’t pay their bills. On average, we will lose 83% of agents within two years of entering the business. In most MLS’s 10% of the agents do 90% of the business. The constant flow of new people is good for state licensing fees, real estate training schools, MLS’s with membership fees and some vendors that sell agents products. However, it is generally very bad for 80% of the people who become agents that get into the business. Let’s face it, just about everyone makes money on the new agents except the agent who is trying to make it their business. With 10 years of managing broker experience I have seen this over and over again.
Zillow is ruining our business. They do not report accurately in many instances, especially little niches where they compare homes that are realy not comparable. They do not take all factors into effect. MLS created a big problem by selling us out to Zillow.
Remaining relevant in a fast changing real estate market from the position as a listing agent is all about the value you can demonstrate to a seller who’s becoming much more educated and aware of the fact that many times, we do the same thing for a listing at $250K that we do for a listing at $550K, so if the technology we use allows us to market either one at a relative base cost, pressures from above are right to challenge our commissions and buyer pressures from the bottom, indicate that in low inventory price points, anyone with a license and a MLS can probably get a home sold without too much problem if properly market priced. Let’s stop thinking about “us and commission” as a primary and think about it from the seller/buyer side of things as to their perception of their needs and through automation/technology, bring our efficiencies and knowledge to bear upon the challenges of both the market disrupters and our own to prone predatory natures. Like I was told many times years past, record your listing presentation and then play it back, everytime you say “I” can be a problem as the public cares less and less about us as agents and more about dollars to them/what we do for them that is of tangible value, however that is accomplished for “them”. Keep that in mind even when working with buyers… it is about “them” not us and from that “we” will survive to sell another day.
Funny you should mention Zillow as a high standard. We are in a transaction right now with a Zillow owned home. Our first problem was finding out that the agent assigned to this sale had a suspended license (we check all agents the minute we start a transaction). The brokerage is one of those large high volume brokerages that never seems to have any coordination within the group. We missed an on time closing because Zillow insists on making any repairs prior to closing and they are very slow getting them done. They were supposed to be done on March 5th, and we asked repeatedly if they had been done as required, but upon checking it out we found that only some of the items had been done. Now Zillow has sent a Demand to Close Escrow when they still have not completed the repairs. In the meantime, our buyer is homeless and a closing that should be happening is being stalled by non-performance. I don’t know about your market areas, but I don’t think Zillow is going to be selling around here for much longer. And I guess that is how I justify my commission charges. By the way, the big agency is telling us that it is their policy to not do an AVID. But we are going to be finding out about that after closing.