With the rise of the discount real estate service companies, we have to be better than we were 5 years ago, even a year ago! We use the term "Full service", but do we provide it?
I keep hearing some real-estate agents complaining about discount brokers taking a bite out of the real-estate market and they are worried that Web companies like Redfin and Zillow will, for some buyers and sellers, eliminate the need for a full-service agent.
Full service real estate services are about more than a commission, it is about treating clients like a member of the family and not just a number. Our commitment must go beyondjust answering our phone, putting a sign in a yard and looking up houses on the MLS.
Successful agents fundamentally and ultimately understand that success is based on human relationships and personal connection that a discount firm or an on-line company cannot offer.
We can and need to be more personable, which is the most effective way of building a loyal customer base and growing our business rather than loose it to discount firms. As a business problem, the issue gets down to this: If our clients cannot get individualized service from you, they will go to a discount firm.
Our future depends on customized and professional service. A useful metaphor is clothing. Would you prefer an "off the rack," or a tailored suit? Some folks can buy clothing off the rack that fits fine, but most people look best with fitted clothing, even if the modifications are slight.
Off the rack is serviceable, but not desirable. It lacks style. It lacks elegance. It is comfortable only in a diffuse, unrestrained way. You'd wear one if you had to, but only if there were no alternative. But when it comes to that suit made to fit you exactly, it not only looks great, but it feels great. There's something comforting about a snug, custom fit. It doesn't have to be extreme to give you a sense of well-being.
Real Estate should work the same way. Every client wants you to "tailor" your service to fit them. You can't just trot out the same routine for every client!
Just some thoughts.
Brad Snyder - "The 45 Day REALTOR"
www.45DayListings.com
EDIT: Paul Silver made some great comments and insights on this post and in his own post (Discount Brokers, Full Service Brokers, Limited Service Brokers... what is all the fuss?) I would reccomend you also read his post. I would now change my use of the word "Discount" to "Limited Service".
Thanks Paul!
Brad Snyder
Buying or selling a home in Sierra Vista is a major commitment in terms of both time and money. There are many things to consider when selling or purchasing a home, and my services can be a big help!
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In my area of the world New Jersey to be exact, the Discounters are not doing very well. about 70% of their listings are expiring without selling only to be re listed with full service Realtors and actually sell.
The discounters will always be around, but usually their model is not to sell the house, it is to get customers from the listings which they can take to houses marketed by full service Realtors. Without that extra income from the higher pay out at the Full Service marketed houses, the discounters would go bankrupt.
Thanks for the comment James. We are better than discounters, and now we must reinforce it!! Thanks again.
Brad
Discounters are not doing so well in the Omaha area either, however the problem is that sellers think that they can save money with them. In many cases what happens is that the lack of "Full Service" fails the seller and the home is re-listed with a "Full Service" company. The problem then becomes the extended market time that resulted from the previous listing makes some buyers wonder what is wrong with the home. I definitely agree with you Brad. If you are going to say you are "Full Service" you had better provide the service you say you will, and we need to somehow do a better job of showing the seller from the start that our services are worth the money. For them and for us.
Roy,
Thanks for the feedback. Have a great day!!
Brad
I have always felt that the best advertisement is a happy client. Too often discount service means discount fiduciary.
Like it or not, every client and transaction is different and cookie cutter service just doesn't get you very far. Thanks for your post Brad.
Custom cars are SO much cooler than the factory rides...
And I am, too.
I think instead of focusing on your distaste for discount brokerages, it may be more productive to focus on what you as an agent can do better than they can.
Just my 2 cents.
Nicely put. That is a great way to say it, "tailoring your services" I'll have to redo my listing presentation now :-)
Brad - I focused heavily on the human relationship and it has contributed greatly to the growth in my business.
Brad, discount brokerages have the highest number of expired listing. We deal with human emotions all day. We should be caring for buyers and sellers as well as potential clients. They need us, why should we give what we need for ourselves and to help run our businesses?
Discount agents have been around for awhile. I think at some point people thought they would take over but I think people realize the problems when the use discount agents.
Great post - congrats on being featured. Interested in everyone's comments.
Brad, I hate to sound rude, but when you say "discount brokers" you are implying that there is a standard rate which an agency must charge. I offer both "discounted" services and full service brokerage, custom tailored to any clients wants and needs. Lets face it, there are some people out there who want to save a buck (usually quite a few bucks) even if it means they have to share some of the work load. If the client ever decides they want to convert to full service, they may do so at any time during the life of the agreement.
Good post. Thanks for sharing the information.
What a wonderful post, I have bookmarked this one, you have gave me some ideas for a blog to write, Thanks again and good luck.
Nice post Brad. You are so right, the same-old, same-old just won't get it done.
I still believe that we need to get away from the term "discount". Discount from what?? The word "discount" is, to me, simply an advertising term meaning less than others. Fee for service is a good term for brokers who only charge for what Virginia now calls "Limited Service" brokers.
Seems to me that the best advertisement for our services is to focus on what we do and not worry about what other brokers and agent do not do for the consumer.
This may have been said. I don't worry about what another agent is doing. If they discount, that is on them. I don't discount my service, that is my main focus. I treat my client with the utmost care because I want them to satisfied with my service and if that were to be a discount here and there, it would still be the same service - full to what I am in agreement to do for that client. Nice post and great points.
Service is the key to sustainability not all business models are alike. Full/disount/flat fee/ no 2 agents run their business the same. Congrats on the feature.
Well done Brad. It is all about the service. BTW I see you have utilized my 45 day listings technique. Is it working for you.
Thanks to all the AR comments! This is a post I felt very passionate about and it is great to hear the feedback, good and bad.
Thanks again everyone!!!!!!!
Brad Snyder - "The 45 Day REALTOR"
www.45DayListings.com
Great customer service is, and will always be, the solid foundation that any successful business is built on.
Nice Post , I am a Full Service Real Estate company and I charge a flat fee and I do offer Full Service. I treat every client like they are my only client. Work hard and it will pay off...
As has been mentioned, we need to get away from the discounter/full-service dichotomy.
As an Accredited Consultant in Real Estate I helped someone yesterday for one hour and got paid for that one hour. I also did a 3 hour Agent Open House for a commissioned listing.
In my mind...Full Service is having the tools and expertise to do it all. That includes hourly consultation, fee-for-service and commissioned sales. I let my clients decide how to pay and how much to pay. Most people choose commissioned sales because they know it's all free unless you produce.
But some people have different needs. A Full Serivice Company can help them all.
Great post....we are highly paid professional for a reason....we get results. In the end that is what it's all about.
The discounters aren't doing as well as they were in the past and most agents have gone above and beyond with their fees. My fees range from 6-8%, not from 3-5%. I have to do more to get a house sold these days, so I should get compensated for that, not discounted...
Customer service is what it is all about and like you say relationships, That is what I love about this business
Quality not commodity. That's the way to go!
Great post and two thumbs up on the featured post!!
I propose that when we talk service, we use the terms "Full Service" and "Limited Service" rather than the commission based terms... if we are going to use "discount" then we should use "full price" or some such... but then, as Lenn and others have commented, using commission based terms implies some sort of standard pricing level, which can then be discounted.
Lenn had a great discussion on her blog about talking commission, and I argued there, perhaps indirectly, that the fees we charge for our services may vary, without varying the level of service. For example, fee structures in most industries are based to some extent on costs of providing the service. Of course, they are also based on market pressures. One is a sort of bottom limit, the cost of providing the service, the other invokes a downward pressure on maximum profit. Somewhere in the middle is where we find our fees. People or companies that can reduce the cost of providing service, can charge less for the same service. Companies with higher overhead must charge more to make the same profit when providing the same service. Basic economics.
But then completely separate to this, is the actual level of service provided. If we assume all our overhead is the same, then the less expensive fee must be coming from reduced levels of service, all else being equal (which we all know it is not). So, we have limited service providers, and full service providers. Within those groups we have companies that have managed to reduce the costs associated with providing those levels of service. They can charge less for the same service and make the same profit.
I think your point here is that what differentiates one provider from another, is the quality and level of the service they provide. Within the limited service provider community, I am sure that some firms make more profit than others, and that some have lower overhead than others. The same is true of full service providers.
Is there a convincing argument that if you and I provide the same level of service, but you are able to reduce your cost associated with providing that service, and so you charge less than me, is that to say you are providing less than me? Of course not.
So yes, some firms provide less service, for less money. Some provide the same service for more money, and others are losing their shirts from too much overhead, regardless of the level of service.
I want to be competitive in my market area, as I am sure you all do. If I can provide full service, with less overhead cost, and so reduce the cost of my service as compared to yours, then I can charge less than you and make the same money. I would be foolish not to do so, dont you think?
Great post-you are right in line with my thinking and I have some posts that are very similar in content to yours. Very well said
This has been a thought provoking post for me and I want to thank everyone, especially Paul Silver for the comments and insight. Paul made some great points and I would now use "limited service" in place of "discount Service". He makes some valid points in his comments above.
Thanks again!!!
Brad Snyder - "The 45 Day Listing REALTOR"
www.45DayListings.com
Brad,
Nice post! I love to hear you realty agents debate these points. I'm a simple kind of guy. You get what you pay for, don't you! Thanks, Fran
Brad - Good thoughts. I have always felt that this is a people to people business. I have avoided most marketing that is impersonal. If you treat people with respect, listen to what they say and attempt to accomplish what they ask.........you will stand out from the competition.
Right on Brad, full service is a family business. You get a 5 and congrats on the feature.
Best...
Go back to the basics...if you tour homes, talk to buyers and sellers, know the market, personal experience...it can't be replaced. But if you don't bother to truly know your market and keep up on stats...well...then it choices rather than you can get everything with this agent.
"Discounters" do very well here..I've often thought of joining the ranks!! An agent can give good service, no matter the price.
Good point! Has anyone read Commissions at Risk? It's about more than discounters but rather companies which will "automate the entire transaction from cradle to grave".
The author also stresses how it's important to find a niche market (among other things) to prepare for the inevitable future of the way real estate transactions will occur.
I am still on the fence about whether or not I fully buy into the author's predictions.
Brad,
Some great points are made and Paul Silver also makes some very good points. From my personal evaluations though, I have to agree with the last part of James Boyer's comments on this one.
Great post and great points. IMO, the discount and online brokers will never replace us. They just offer something different that some consumers want and some don't. I've had many discussions about this lately and I compare it to my own preferences. I choose to drive a little farther and pay a little more for my groceries at Target, rather than the Wal-Mart Supercenter that's about 1 mile from my home. Why? Because the stores are cleaner, the isles are wider, the products are often better quality and the service is superior. It's worth the extra money to me. It may not be for my neighbor, but my neighbor has different tastes than I do.