Wage War on Real Estate Discounters!
Bernice Ross, Real Estate Coach
In terms of earning a full commission, the first thing to keep in mind is that discount agencies play an important role in meeting the needs of the buying public. No matter what the product, some clients will purchase based exclusively on price. If you're with a full service firm, it's unlikely you will see this business. But what about the bulk of the buying public? What can you do to demonstrate the services you provide a worth a full six percent? Here are 15 brief strategies excerpted from my book, Waging War on Real Estate's Discounters.
- Strategy #1: Unique, Superior Forces Overcome Competitors
The critical step in overcoming the competition on any listing appointment is persuading the seller you can help them get the highest price possible for their property in the shortest amount of time. To overcome the discount objection, you must demonstrate your value in helping the seller achieve this important goal. Waging War on Real Estate's Discounters argues the best way to do this by offering superior marketing, superior service, and superior technology. To do this, your listing presentation must offer at least two or three services your competitors do not provide. Your "unique selling proposition" then becomes the services you provide that help the seller obtain the highest price possible for their property. - Strategy #2 Maximum Exposure Equals Maximum Price
In order for the seller to obtain the highest price possible for their property, they must have maximum exposure to the market place. Discounters often expose a property only through their company's web site. Limited exposure means a limited number of people will see the property. This means extended market time (and hence more carrying costs.) It also means they will be less likely to receive the highest price possible for their property. - Strategy #3: Traitors Within
The most insidious of discounters is the agent in your own office who undercuts your commission while still offering the same company services you offer. To "defeat" this discounter, use a script like the one below:
"To obtain the highest price possible for your property, you need someone who is a powerful negotiator-isn't that correct? (The obvious answer is "Yes.") So if you hire an agent who can't even negotiate a full commission on their own behalf, how effective do you think they will be in negotiating the maximum price for your property?" (Shut up and wait for the seller to respond. They generally have a "deer-in-the-headlights" response to this close.)" - Strategy #4 Smart Tech Tools
Smart technology provides a strong competitive advantage. For example, an excellent strategy is to have an 800 Call Capture system. This system will contact you immediately when someone calls on your listings. The system generates the caller's phone number with close to 100% accuracy and approximately 60% accuracy in terms of addresses. A simple way to defeat the discounter is to have the seller call about one of your competitor's listings. In most cases, the floor broker will end up taking the call and over 90% of the time, fail to obtain a valid phone number. This means the lead is gone. In contrast, your call capture technology allows you to follow up immediately when the buyer's interest is greatest. Thus, the seller can easily judge who is the most efficient at obtaining phone numbers and following up quickly. Furthermore, if you demonstrate this technique during a listing presentation, you will usually get the listing. - Strategy #5 Smart Traditional Marketing
Most agents do not use open house effectively. Ninety-eight percent of all agents do not follow-up on their open house leads. - Strategy #6 Respond to Email in a Timely Fashion
Most agents do not respond to email in a timely fashion. Have the sellers send an email inquiry and see how long it takes for the agent to respond. If you normally respond quickly, this will definitely distinguish you from most discounters. If you are poor at responding quickly, hire a virtual assistant who checks your email at least every two or three hours and responds to all Internet inquiries. - Strategy #7 Virtual Tours and More
If you're with one of the major brands, make sure each of your listings has a virtual tour plus and plenty of pictures posted to your personal website, to the company website, as well as Realtor.com. If the competitor offers three pictures of their listings, offer 10 to your sellers. A different strategy is to set up a separate website for each of your listings. Again, your focus needs to be on how to obtain the highest price possible in the shortest amount of time. - Strategy #8 Choose Who Represents You
Another important issue for the seller is the ability to have a choice about who represents their home. In most cases, discount agencies assign the seller the agent rather than allowing the seller to make the selection. Selling a home requires the agent to be a "member of the family" during the sale. Ask the seller, "Are you willing to sacrifice choosing who will handle the most important investment sale of your life?" - Strategy #9 Put Alexa to Work for You
When a new discounter opens in your market place, check their web traffic on www.Alexa.com. Recently an agent questioned me about how to handle a local discounter working with a 2% model. If he visited Alexa.com, he would have learned this particular discounter's rank on Alexa was in the 4 million range. (Alexa ranks the top 5 million websites in terms of web traffic - the lower your score the higher your traffic.) Just for comparison, Realtor.com ranks around 200, while the major brands are ranked in the top 15,000 websites. With a ranking of 4 million, this discounter has virtually no one visiting their website. - Strategy #10: Vow to Link to Your Local IDX or VOW
Visitors to your website come their for one thing-to see what is listed. Meet this need by linking to you local MLS IDX or VOW. These websites are the most highly visited in any area since they list all of the properties on our local MLS. Show sellers how you use this powerful tool to gain maximum exposure to the marketplace. - Strategy #11: Relationship Is Still the Name of the Game
Past clients who had a positive experience and a high degree of trust in their agent, are much less likely to look elsewhere for representation. The challenge is most agents simply do not keep in touch with their sellers after they sell their home. - Strategy #12: How Much Is that Discount in Reality?
Most discounters increase their fee to 4% when the seller wants to be on the MLS. To obtain maximum exposure to the marketplace, the house must be listed on the MLS. Thus, the difference to the seller is 2%, not 4%. A good way to counteract this argument is to check your personal "average market time" for your listings against your discount competitor. If you sell properties on average at a higher price in a shorter time than your discount competitor, then the 2% difference disappears since the discounted listing takes longer to sell and the seller has greater holding costs. - Strategy #13: Commissions Are Negotiable
Commissions actually increase in buyers' markets. When things are bad, sellers will not only pay full commissions, they will throw in perks such as televisions, trips to Hawaii, etc. since buyers' agents do pay attention to commissions. When the strong seller's market shifts to a buyer's market, discounters will have to adjust their commissions as well. - Strategy #14: They Gotta Be Able To Find You!
Internet visitors are unaware of local independent discounters and search known brands first. Like many relocation buyers, web visitors usually search the high profile, national company who dominates their local marketplace first. If this company has IDX or VOW, the visitor really has little need to search further since they can access the entire MLS. Increase your listing exposure by being with a company that has a strong national reputation or that really understands how to market on the web. If they can't find you, your sellers will not have the maximum exposure they need to obtain the highest price possible for their property. - Strategy #15: Discount Buyers Want the Benefit of the Discount Price
Like FSBO buyers, discount buyers are looking for a reduced price. When buyers look shop FSBOs, most automatically deduct 3% from the asking price. The same thing is true when a buyer purchases from a discounter. When the discounter advertises how much the seller is saving, isn't it logical for the buyers to expect part of the discount to go back to them?
