Editor’s note: This is Part 2 of a three-part series. Read Part 1.
Commission cutting is on the front burner again. What can you do to defend your commission as the market heats up and competitive brokers start slashing their fees? The answer is to show your seller the value you bring to the transaction.
When I wrote "Waging War on Real Estate’s Discounters" back in 2005, the primary theme of the book was, "Maximum exposure to the marketplace results in maximum sales price." To defend your commission, you must be able to illustrate how the services you provide help the sellers achieve that goal more quickly than with any other agent.
The vehicle for doing this is to create what is known as a unique selling proposition (USP). Your USP outlines the unique services you provide that your competitors do not. If you don’t already have your own USP or if your USP needs strengthening, a key place to begin is with competitor reconnaissance.
Your first step in using competitor reconnaissance is to discover what your competitors are doing to market their listings. In most cases, the large majority of agents use what is jokingly referred to as the "5P approach": Put a sign in the front yard; put the listing on the multiple listing service; put it in the paper; post it online; and pray it sells.
Next, identify where your most likely competitors are advertising and how they are doing it. For example, are they using postcards, newspaper ads and open houses? If so, you will probably have to match some of this activity to be competitive.
Where you can really make headway in many cases, however, is by how you distinguish yourself online. Since your goal is to provide maximum marketing exposure, one of the best strategies is to provide at least 20 pictures of the property.
When the house doesn’t have much to recommend it, keep in mind that Gen X and Gen Y are often buying the lifestyle more than the physical characteristics of the property.
For example, my nephew just bought his first condo. The agent had an architectural photographer shoot the property. Although the condo was beautiful, the first eight pictures on the virtual tour depicted the local hangouts that were within walking distance of the property. After looking at those pictures, you not only had a sense of what life would be like living in the condo, but you had a strong sense of what it would be like to live in the area as well.
To kick this up a notch, it’s smart to have professionally shot video available for all your listings. If you have a higher-priced listing, provide this service for each listing. For lower-priced listings, hire a professional videographer to shoot a series of short videos illustrating the lifestyle in your local area as opposed to a video of a specific house. You can enhance the professionally shot videos by shooting videos of fun or unusual events with your smartphone video camera.
For example, if there is a heavy snowfall, a beautiful sunset or a funny street fair, your goal is to capture the fun things about the area’s lifestyle. You could also do 60- to 90-second interviews with the mayor about upcoming zoning changes, or with the owner of the new Italian restaurant that just opened, or with the local high school football coach about the upcoming big game.
Another approach is to pay for "enhanced listings" on Realtor.com, Trulia and Zillow. While this can be expensive (up to $1,000 per year or more) it can easily pay for itself in terms of converting more listings at a higher commission.
Furthermore, according to Realtor.com, using the Open House Alerts on its site resulted in "a staggering 93 percent success rate … Visitors were twice as likely to be ‘high quality’ as visitors from the newspaper or from yard signs." Consequently, providing this service and then pointing out to the sellers how this benefits them in getting a higher sales price (more exposure, twice as many high-quality leads) will usually guarantee that you will obtain the listing.
To really put your marketing on steroids and to stand out from the competition, consider setting up your own YouTube channel for your listings. You can dedicate your channel to the lifestyle in the area. Since NAR reports that only about 1 percent of the agents are using video (and only a fraction of those have YouTube channels), this type of exposure will provide you with an easy way to differentiate yourself from competitors and earn a higher commission.
What else can you do to stand out from the competition and earn a full commission? Don’t miss Part 3 to learn more.