I’m asked by agents all the time, “How do I justify my commission to a potential seller who is just hunting for the agent who will charge them the least?” Sound familiar?
There are two phases to a homeowner’s readiness to hire you in the listing conversation. First, they need to buy into the real estate industry, and then they need to see the power of a real estate agent (you!)
This is an important distinction, because when a homeowner doesn’t see the value in hiring an agent, that’s when they’ll want you to compete based on pricing and commission. The homeowner is essentially saying, “I don’t see the value of a real estate agent, so tell me how much you charge, because I’m just going to hire the cheapest one.”
The first part of the listing conversation should be ensuring the homeowner recognizes the need to work with an agent. They need to see the value of the real estate industry and why using an agent (any agent!) is in their best interests.
The great news is statistically — the numbers are on your side. According to the National Association of Realtors (NAR) study of Home Buyers and Sellers, the typical FSBO home sold for $260,000 compared to $318,000 for agent-assisted home sales.
The fact that you are sitting across from them in that conversation is already a great start to winning them to the side of real estate, so the second part of the listing conversation becomes: “Why should they choose you over any other agent?”
The chef analogy
We’ve all seen those reality chef competitions on TV. Each chef is given the same tools and the same ingredients. They use the same kitchen, the same pans; everything is identical. Everything except the dishes they prepare — those end up very different from each other due to the personal creativity of the chefs.
The real estate industry is a lot like that. Every agent in any given market has access to the same MLS, the same internet, the same social media, flyers, lockboxes, open houses. Everyone has the same tools of the trade, but it’s not about the tools you have. It’s all about how you use those tools that sets you apart.
The second part of the listing conversation is about showing the homeowner how you use the MLS, explaining the importance of details, how you take photographs, how you market compared to other agents, how you leverage social media to showcase the home, you get the idea.
It’s where you spotlight to the homeowner what makes you a cut above the competition.
How metaphors and analogies are the best tools you have
One of the best ways to explain how you work and what you can accomplish for the homeowner is through the use of metaphors and analogies. I can’t stress how important it is while you’re on a listing appointment explaining the MLS or at a broker’s open house.
Whenever I introduced the power of the broker’s open house, I explained it this way:
“Mr. or Ms. [insert name], the broker’s open house is one of the best things in marketing a home, and here’s why. If every broker has two potential buyers for your house, and I can get 30 brokers excited about your house, that’s 60 potential buyers right out the gate.
Now, if a clothing designer is having a fashion show for a new style of clothing, they start promoting that fashion show. All the clothing buyers for boutiques come see this fashion show, and if they see something they like on the runway, they bring it back to their store. That’s just like a broker’s open house — like a huge house fashion show.
Now, having an opinion sheet at this broker’s open house for them to fill out is like in the movie industry when they have a premiere. After the movie is over, the audience fills out a critique sheet about the movie so the producers can get a feel for their opinions. It’s not uncommon for them to change things in the movie once they get the surveys back.
For example, in the last of the original Star Trek movies with William Shatner, he dies at the end. Well, the audience hated how the ending was, so based on that survey, they went back to the studio and reshot the finale, so Shatner didn’t die, all due to the feedback they got.
The broker’s opinion sheets from the open house do the same thing. If the majority of them say ‘There is a problem with the price’ or ‘This room shows well’ or ‘Those ugly curtains need to go,’ you can learn those things right away rather than having the house sit for months on the market.”
A homeowner who’s shopping based purely on price isn’t convinced that the real estate industry or a real estate agent is worth the money, which is why it’s so important that we show them.
Not only is it important for the client’s best interests to understand the importance of hiring an agent, but when we can highlight all the benefits, the entire industry looks good.
Now, go help homeowners get their homes sold!