Home sellers don’t want a REALTOR® who is simply an order-taker, says Joe Schutt, CRS, broker/owner of Unit Realty Group in Boston. “They say, ‘We really want you as the expert in the market.’ They want a partner. They need someone who understands more than just listing your home.”

Value propositions

CRSs bring a lot to the table — the key is successfully communicating it.

By Gayle Bennett

 

Alexis Bolin, CRS, with ERA Legacy Realty in Pensacola, Florida, has been a REALTOR® for 36 years. As a top seller in her area, her reputation precedes her.

Even so, from time to time potential clients will ask her to lower her commission, usually making the argument that they’ve talked to another agent who will charge them less. She knows they aren’t completely comfortable with that low-cost agent or they wouldn’t be talking to her.

“Typically, I say, ‘I can appreciate how you feel. In every field, there’s generally someone who will do it for less. But if you were in a bad accident and needed a good attorney, are you going to look at the track record of the attorney, how many cases they’ve won? Or are you going to hire the cheapest attorney?’” she recounts. She tells these potential sellers that she charges a reasonable fee, the same charged by many agents who have not sold anywhere near the thousands of homes she has in her career. The vast majority of sellers who meet with her end up hiring her.

Most CRSs don’t run into too many potential sellers questioning the commission, but it happens. However, if CRSs have already marketed their proven track record and can clearly communicate all they will do to sell the house as fast and for as much as possible, sellers will understand the bargain they are getting.

Stacking Up Against FSBO Only 9 percent of sellers are FSBO sellers, and 40 percent of these sellers knew the buyer. Another 18 percent were contacted directly by the buyer.
FSBO sellers and others	12%
Sellers who were assisted by a real estate agent	88%
The FSBO sale price for a typical home	$184,000
The sale price for a typical agent-assisted home	$230,000
Percentage of sellers who choose to sell their home to a buyer they do not know without the assistance of a real estate agent because they do not want to pay a fee or commission.	46%
Other reasons for selling a home without a real estate agent include selling to a relative, friend or neighbor; buyers contacting the seller directly; and sellers not wanting to deal with an agent.	54%

Market Your Expertise

Home sellers don’t want a REALTOR® who is simply an order-taker, says Joe Schutt, CRS, broker/owner of Unit Realty Group in Boston. “They say, ‘We really want you as the expert in the market.’ They want a partner. They need someone who understands more than just listing your home.”

Proving your value often comes down to having a conversation with the client to explain in a concrete way what selling a home entails. For example, Schutt asks potential clients who are considering selling for-sale-by-owner (FSBO): Are you going to be able to say “yes” to every single showing request? How far do you live from your job? Can you take all that time off of work to show your home? In a busy, traffic-choked city like Boston, is it even realistic for you to consider this approach? When an offer comes in: Is the mortgage material in order? What improvements can you make to your home for $5,000 that will gain you $20,000 on the final sale price?

“There’s tons of opportunity to prove to somebody that you are valuable on so many levels of the transaction that, why wouldn’t they hire you?” Schutt says. Good agents help position their clients’ homes in the way that best reflects their market — and that market expertise cannot be duplicated by an inexperienced, under-educated REALTOR®.

After all, he says: “How can you break down the value of having a partner to talk things over with when you get 10 offers? How do you place a dollar value on someone showing your home?”

Gretchen Lambeth, CRS, with Hawaiian Isle Real Estate in Kailua-Kona, Hawaii, says she signs about 95 percent of the sellers she meets with. She partially credits this great batting average to the data-heavy newsletter she emails to about 1,000 prospects and clients.

“By the time people call me, they know me. They see me as an expert in their community,” she says. “The listing presentation is just the detail to that. Proving my worth started a year ago when I started mailing them my newsletter.”

Bolin markets herself as someone who sells homes, not someone who lists them. “Even my sold signs don’t look like normal sold signs. They’re huge and they say ‘Alexis did it again.’” She’s also hosted a live real estate TV show since 1988.

Furthermore, once each home transaction closes, she convinces her buyers and sellers to market her services to their friends and family. “Once I sell a house, I say to my sellers, ‘OK, now I’m out of business. It’s your job to go find me another seller in this neighborhood.’” And they do. Bolin says 75 to 80 percent of her clients at any given time are repeats or referrals.

In areas that went through a major boom and bust, CRSs might need to adjust their marketing as the market rises from its depths. “As we transfer from a short sale, foreclosure market around the country to a traditional market … there’s an anticipation that you are going to be doing some things differently,” says Lee Barrett, CRS, with Barrett and Co. Inc. in Las Vegas. “Now, as prices go up, you have to be able to prove value. You do more service. If you don’t have the service mentality, the consumer is going to negotiate with you based on the services you don’t offer.”

Communicate Your Value

Lambeth goes into every listing presentation with a 28-item, two-and-a-half page marketing plan (see sidebar) that breaks down everything she will do to sell a house, including staging, hiring a professional photographer, marketing and much more. She takes an hour to go through each item with a client. The last item on her list explains the commission.

“I get to the bottom, and I say, ‘Do you have any questions?’ Ninety percent of the time they say, ‘No,’ because it was more than they had ever considered doing to sell their home. If you are the average seller, you don’t sit down and think of all the things that need to happen to sell your home.”

Barrett doesn’t use a list, but his listing presentations have four distinct stages. The first is presenting the market research, the second is what he will do to ensure the house sells, the third is the pricing and the fourth is marketing. “In the first part, they have to get to like you, trust you and know you before you get to a point where you are talking about money or how you are going to market the property.”

Barrett isn’t opposed to negotiating commissions, although he says he isn’t often asked to. But he stresses that in any negotiation, agents must know their value. “They should be able to say, ‘This is my bundle. What would you like me to take out of this bundle so that I can still provide you quality service? I can use some flexibility if you are prepared to position the property to sell.’”

As an example, he says the professional photographer he uses charges $250 to $500 a shoot. “That’s a hard cost we as real estate agents put in. An owner is not necessarily going to want to pay for those photos, but the quality of those photos is going to get their home sold.”

Keep It in Perspective

The data are clear on what a REALTOR® brings to a sale: In 2012, the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales, according to the 2013 National Association of REALTORS® Profile of Home Buyers and Sellers.

While all REALTORS® will field client objections to the commission from time to time, “I don’t think it’s as often as we think it is,” Barrett says.

Bolin agrees. “A lot of times we think the biggest concern they’ve got is the commission, and it’s not.” Her clients are most concerned with whether the property will sell and the price they can get for it. “Very few sellers shop the price. And yet, if you ask REALTORS,® commission is the objection they are most afraid of.”

Combating that fear comes down to mind-set, says Bolin. “If you go in positive that you can do the job, you’re the best person for the job, you charge a fair price for the job, you’re going to do everything within your human powers to get their house sold, they can feel that. Honesty, confidence and humor help overcome any objections, commission or otherwise.”

And for the sellers who really want more for less? “The word ‘next’ is one of the best four letter words,” says Bolin. “You don’t have to have everybody. And the good news is they don’t have to have you. If they don’t trust you, you can’t help them.” 

Gayle Bennett is a writer and editor based in Washington, D.C.

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