Deciding what you should be paid for selling someone’s property is tricky business, especially when someone undercuts you. I will examine how to beat the fee cutters.
Fee cutters are a fact of life in real estate. You will never be able to escape them, but there are ways to overcome them. I’m sure most, if not every, agent has cut their fee at some point only to have the competition score the listing anyway. It’s a gutting feeling.
But the fact is, if you don’t offer a better experience for your higher fee then there’s no reason for a client to select you as their agent over any other at any fee.
Differentiation is the key. In the absence of differentiation, the customer will always shop on price. From a customer’s point of view, skill and experience are less compelling than confidence and energy.
You will win business by selling yourself better than all the other agents and to do this you need to listen to your customer and relate your value to their needs. The most important component of the listing presentation is identifying need. If you can identify the client’s needs then you can sell the features and benefits that specifically relate to the client and where they are at in the sales process.
• What they are looking for in an agent.
• What they don’t want in an agent.
• How they will select their agent.
• What they already know about your company and yourself and why they called you in.
Asking these types of questions allow you to build a case for what you’re worth. One of my clients hit a major problem when potential vendors would hang up the phone if they mentioned a fee higher than 1 percent. By highlighting that fees “started at 1 percent” they were able to get in the door more often. The next step is to build the fee up with tasks like open homes charged at an extra .5 percent. That’s not being tricky or deceitful, it’s simply understanding there are multiple fee levels. They also started having agency agreements pre-written at 2.5 percent including GST and since then they’ve achieved that fee every time.
If you’re not confident in your ability you can’t expect others to be. You have to set what you’re worth in the marketplace. I also get a lot of requests for fee defence scripts. The reality is, if you think you’re going to win on fee because you have a great fee defence then you’re in trouble. Rather than defending your fee I recommend being proactive from the beginning.
Fee approximation close.
Start your listing presentation highlighting that agents charge fees anywhere from 3 percent down to 1.5 percent, and while you’re not the dearest or the cheapest you are known for having the best value. By starting with the larger fee you’ve used that as a base platform from which to jump. Later in the presentation and in summary mention your actual fee and then switch to another topic. That way the customer doesn’t really get a chance to jump in.
This is another of my favourite techniques and it’s so simple. Estimate fee dollar difference between yourself and your competitors and suggest the difference is added to the reserve price. You still attract the fee you’re worth but the vendors also feel they’re not paying too much out of their own pocket.
Cheap versus quality.
It’s also important to remind potential clients that in life you often get what you pay for and real estate agents are no different. Ask them “have you ever bought the cheap version of something only to have to go back and buy the more expensive version to ensure the job was done correctly? Don’t make that same mistake with your agent.”
This article first appeared on Elite Agent: https://eliteagent.com/real-estate-commission-fees-advice/