(Part three of a five-part series. See parts 1, 2, 4 and 5.)
Do you have what it takes to outsmart the company who offers a 2, 3 or 4 percent commission? There are ways to get paid a full commission, provided you know what to do and are willing to do it.
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 6 percent?
Your role as an agent is to assist the seller in obtaining the highest price possible for his/her property in the shortest amount of time. To do this, the seller must have maximum exposure to the market place. Exposing the listing through only one source (i.e. the discounter’s Web site) greatly limits the number of people who 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.
If you’re with one of the major brands, make sure each of your listings has a virtual tour plus plenty of pictures posted to your personal Web site, to the company Web site and 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 Web site for each of your listings. Again, stay completely focused on how to obtain the highest price possible in the shortest amount of time.
A second important difference you can use against some discounters is having a link to your MLS through an IDX or VOW. Visitors come to your Web site to view what’s currently available. Many discounters and “by owner sites” only list their own their own listings and do not provide access to the entire MLS. Buyers “surf” different sites and then return to the sites that provide the most useful information.
Another way to defend your commission is to realistically assess how the local brokerage community reacts to discounters. More than 60 percent of all sales are generated from other agents. Clearly, if the agent population is unwilling to show listings with discounted commissions, many qualified buyers will not see the seller’s property. Less exposure results in less purchase price. So how “real” are the so-called seller savings if the seller’s property doesn’t reach all qualified buyers?
Something else few sellers consider is whether they can select their own agent. In most cases, discounters assign the seller an agent and that is the only choice. Selling your home requires the agent to be a “member of the family” during the sale. A key question to ask the seller is, “Are you willing to sacrifice choosing who will handle the most important investment sale of your life?”
A different strategy, especially when a new discounter opens in your marketplace, is to check the competitor’s Web traffic on www.Alexa.com. The agent who questioned me about how to handle a local discounter working with a 2 percent model could have visited Alexa.com and learned this particular discounter’s rank on Alexa was in the 4 million range. (Alexa ranks the top 5 million Web sites in terms of Web traffic–the lower your score the higher your traffic.) Just for comparison, Realtor.com is ranked at 204 while the major brands are ranked in the top 15,000 Web sites. With a ranking of 4 million, virtually no one is visiting this site.
You can beat the commission squeeze with planning, great technology and superb customer service. To learn more about defending your commissions, see next week’s RealClues: “Defending Your Commission Part 4: FSBO’s Down,