Realtors across the country are hurting. Housing markets are in a downward spiral. Homeowners are flocking to FSBO websites to list their own homes. Internet lead generation services are heating up the competition. And many agents are offering cut-rate commissions to survive the cutthroat market.
Realtors have to remember, however, what most retailers already know -- competing on price alone is for suckers. Start offering sellers lower commissions and you are setting yourself up for a world of hurt, both in the short-term and well into the future. Once you establish a reputation as the "cheapest agent on the block," turning that around later can be nearly impossible.
Instead of competing by offering lower commissions, find something else to compete on -- quality service, experience, and know-how. Adjust your marketing materials to highlight current market conditions and your unique ability to sell homes in a down market:
Do not sugarcoat news that the market is down. Provide facts and figures showing the current condition of the market. Let prospective clients know that other agents may try to present them with a rosier picture just to get their business.
Inform clients that according to the NAR, a home sells for 16-percent more on average when sold through a Realtor than when sold by the owners or someone less qualified. Most homeowners are unaware of this fact and may need to be reminded that you are likely to earn much more than your keep.
Highlight your experience. If you have been a Realtor for ten years, that is a big plus. Make sure your clients know the value of your experience and that you have sold homes in slow markets before.
Highlight your dedication. If you are a full-time Realtor, market yourself as a full-timer and let you clients know that selling homes is your passion. Let them know that some of the agents they talk to may be part-timers and may not be quite as responsive as you.
When you meet with prospective clients for the first time, make sure you have a marketing plan in place for their home. Highlight your three-pronged attack for selling a home in a slow market:
Pricing the property to the market. Explain why setting the right price is so important in generating interest in the property. Explain how you arrived at the asking price, and back it up with plenty of facts and figures from comparable properties.
Getting the property in tip-top condition. Explain why curb appeal is critical and why the home needs to make a great first impression. Consider putting together a team of consultants, including a home inspector and a professional stager to write up a plan of action, complete with an estimate for the work that needs to be done, and how much these improvements are going to increase the salability of the property.
Marketing the property online and off. Demonstrate to your clients your ability to get the property listing in front of as many prospective buyers as possible. Explain the access you have to MLS listings and show your client at least eight places on the Internet where you plan on marketing their property, including Craig's List and Backpage.
In a slow market, many sellers are worried that in addition to losing money due to market conditions, they stand to lose an additional 6 or 7 percent by having to pay your sales commission. Make sure they realize the benefits of using a licensed Realtor, including the following:
In addition to marketing the home to the general public, you market to other Realtors, who can show the home to their clients.
You prescreen prospects, so only the most serious prospective buyers can look at the home, and you accompany all qualified prospects as they tour the sellers' home.
You can help the sellers compare and evaluate purchase offers.
You can negotiate with the prospective buyers without tipping the sellers' hand or compromising the sellers' negotiating position.
You can handle all the details related to closing to make sure the sellers' interests are protected.
When a sluggish market and other changes in the industry heat up the competition, you have to make some adjustments in the way you present yourself to prospective clients, especially those who are in the process of considering hiring you as their listing agent. Step up to the challenge. Never simply give in and lower your commissions. Offer more value, and earn your commission.
Published: July 20, 2007
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Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker.
Throughout his career, Ralph has proven his commitment to helping other real estate and sales professionals build upon their past and present success, grow and expand their businesses, and provide a rich and rewarding future for themselves, their customers, their employees, and their families.
As president and CEO of Ralph Roberts Realty, Ralph has personally helped thousands of consumers realize their dream of homeownership. While selling over 10,000 homes (and buying and selling over 3,000 investment properties) throughout his 30-year career, Ralph has made the time to mentor and coach hundreds of professionals in real estate, sales, and a host of other fields. Ralph is a recognized authority on Real Estate and Mortgage Fraud; Residential Real Estate; Personal Salesmanship; Sales Force and Office Management, Motivation, Design, and Team Building; and Foreclosure Self-Defense and Loan Modification, fields in which he has demonstrated his commitment to preserving the American Dream of Homeownership.
Ralph's numerous websites, blogs, seminars, and speaking engagements engage, entertain, and educate both consumers and professionals. Ralph is also an accomplished author with several successful titles to his credit, including:
Power Teams: The Complete Guide to Building and Managing a Winning Real Estate Agent Team
Financing Real Estate Investments For Dummies (John Wiley & Sons)
Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing (John Wiley & Sons)
Foreclosure Self-Defense For Dummies (John Wiley & Sons)
Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan)
Foreclosure Investing For Dummies (John Wiley & Sons)
Foreclosure Myths: 77 Secrets to Saving Thousands on Distressed Properties (John Wiley & Sons)
Advanced Selling For Dummies (John Wiley & Sons)
Flipping Houses For Dummies
52 Weeks of Sales Success (John Wiley & Sons)
Walk Like a Giant, Sell Like a Madman (John Wiley & Sons)
Cross-Cultural Selling For Dummies (John Wiley & Sons)
To learn more about Ralph, visit AboutRalph.com, check out his daily insights on real estate and mortgage fraud prevention at FlippingFrenzy.com, or visit his latest blog dedicated to helping distressed homeowners fight foreclosure, KeepMyHouse.com.
You can reach Ralph at or by calling (586) 751-0000.
Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker.