Offer them value

May/June 2017 edition

Steve Devine explains how you can evolve from a ‘price agent’ to an agent who can articulate your real value to your vendors.

By Steve Devine

Disruption. It’s the buzzword I keep hearing in real estate circles – over and over and over again. The ever-encroaching presence of the major portals, Domain and The explosive entrance into the market of brands like Purplebricks and Open Agent. And make no mistake – Google and Facebook are just around the corner. All of them are patiently waiting in the wings. They’re all looking for an opportunity to make us redundant or – at best – less relevant.

At the moment, to me it seems a little like we’re just laying down and taking it. What are we doing to combat the ever-increasing disconnection between us and consumers? How are we demonstrating the value we add to the transaction?

In an industry which is growing increasingly tough, it’s more critical than ever to prove your value and deliver on your promises.
All agents are not created equal
It’s unfortunate that the market in recent years has created an environment where even poorly skilled agents can succeed. What many vendors don’t realise until it’s too late is that had they engaged a more skilled agent, with proper marketing, social media reach and an extensive database, their OK result could have been an incredible result.

Our margins and profitability are under attack on so many fronts, but we’re still doing all of the heavy lifting. Worse still, we’re our own worst enemy. With stock levels lower than ever before and competition amongst agents always increasing, we’re all clambering to win business and a fee discounting culture has become rife.

So do we just sit back and accept that the only way you can win the listing today is to join the fee discounters? The answer is a resounding ‘no’.

Our services are not a commodity. We’re not selling a TV off the shelf in a department store. What we do is far more complex and our skills as agents unquestionably have an impact on the end result.

Real estate isn’t easy. But unfortunately we’re in a temporarily inflated marketplace right now where even poor agents are able to look good – and this feeds consumer perception that all agents are the same. We’re not!

Put the same property into the hands of two different agents. The first agent simply puts the property online and answers any enquiries as they come in. The second agent also puts the property online, but they also mount a social media and print campaign, implement marketing automation practises and tap into their extensive database to engage a much larger audience of potential buyers across a larger demographic and geographic footprint. Most importantly, the second agent has the skills to lead the buyer to pay a premium price and feel good about it. Do you think both agents will achieve the same result? Yes, they’ll both sell the property. But there’s no question that the second agent will be able to achieve a better result – and likely in a shorter amount of time.

It’s important to never forget that it’s not about the amount of time we put in that’s important. 

Our clients are paying us for an outcome and our fee should never be linked to the number of phone calls we make or how many inspections we schedule. It’s not about time. If you can identify one buyer on your database that you know the property is perfect for and they’re prepared to pay more in order to secure it in the face of competition from other buyers, then that’s worth something. It’s worth more than dozens of phone calls or scheduling another couple of inspections. You’ve been able to provide a better outcome for your vendor because you’re a skilled agent. It might have taken less time, but it equates to real value.

Articulating value
So why are so many agents willing to cut their commissions? Is it a lack a confidence? Are they desperate to get the business?

I believe that the main reason is that far too many agents aren’t able to articulate their value proposition.

Ask yourself: What makes you different from your competitors? What do you tangibly do that sets you apart? Can you effectively communicate your points of difference? And, most importantly, can you demonstrate that your points of difference will result in more money going into your vendor’s pocket?

I believe the best way to demonstrate the value of your points of difference is to engage your vendors through storytelling.

Here's an example dialogue, using the  geographical coverage of our three offices as a differentiator.

“Where do you think the likely buyer is most probably living right now?”

“I'm guessing locally?”

“You're right. Our research shows that 90% of buyers live within a 4km radius of the property they buy. We can attract and engage a broader cross-section of buyers by leveraging our network of sales teams in Strathfield, Concord and Drummoyne.”

Vendor: “Are you saying that agents from all your offices will tell buyers about our property?”

Agent: “That's exactly what happens. Let me give you an example of how it works and, more importantly, how it can put more money in your pocket.

“We recently auctioned a property in Strathfield; it sold for $300K above reserve. While that sounds great, let's analyse how that actually transpired. One of our Drummoyne sales agents convinced a buyer who was looking exclusively in that local area that they should at least consider looking at a property in Strathfield that met their criteria and budget. They were initially reluctant, but they took our agent’s advice and begrudgingly inspected the Strathfield property. They fell in love with it and while they actually didn't end up buying that property, they were the under bidders.

“Analysing the auction, the third highest bidder stopped bidding $100K above reserve and were adamant they couldn't go further. So if we took the Drummoyne buyer out of the equation, the property still would have sold above reserve by probably $110K. Is that a fair assumption?”

Vendor: “That makes sense.”

Agent: “So having that additional buyer at that auction, that none of our competitors would have engaged, resulted in how much extra for our client?”

Vendor: “I guess that got them $190k more”

Agent: “You're 100 per cent correct. You see how having this difference is likely to get a better result for you?”

Vendor: “I can see that now.”

Remember, if you simply tell them, they may doubt you. If they say it themselves, they will believe it and gain confidence in you and the value you represent to them.