I just marked my tenth anniversary as an Inman columnist and thought it would be fun to take a look back at the hot topics, how the industry as changed, as well as the themes that are as relevant today as they were yesterday.
A Decade of Change and More of the Same
In many respects, the issues we faced a decade ago are still with us today. Key examples include how to utilize new marketing technologies, how to stay profitable during a shifting market, as well as how to cope with economic and natural disasters over which we have no control.
FSBOs
In 2003, an interesting trend was emerging. Web marketers were convinced that they would soon disintermediate (eliminate) agents from the purchasing process. In a column called, Why FSBOs Need a Web Savvy Real Estate Agent More than Ever,
I outlined the reasons that FSBOs would have a much tougher time marketing their properties online, even though FSBO companies were springing up everywhere. The quote below references research that was an early harbinger of a startling trend:
Despite the lowest interest rates in 30 years and one of the hottest sellers' markets in history, the number of FSBOs who ultimately list their house with an agent has increased from 76% to 80% (CAR study January, 2001). Inman News reports that ForSalebyOwner.com experienced a 7 percent decline in traffic during the month of June (2003) alone. When the real estate market shifts from a sellers' market to a buyers' market, these numbers will probably be even higher.
In other words, 24 percent of the sellers were able to sell their properties by owner in 2002 vs. 20 percent in 2003. According to the latest NAR Profile of Buyers and Sellers, that number is down to about 12 percent, half of which are intra-family transfers generated by marriage, death, or divorce. Sellers do indeed need a web savvy agent more than ever.
Defending Your Commission
My first column on how to defend your commission ran in 2002. As the market became superheated in 2004 and 2005, I wrote another 13 articles on this topic.
Jessica Sweesey, the Inman editor at that time, decided to change the title for my series from “Defending Your Commission” to “Waging War on Real Estate’s Discounters.”
The title alone set off a firestorm of debate that led to my first book. The discounters trumpeted how they were going to put the full service folks out of business while the full service companies desperately searched for ways to compete on value rather than price.
My position was that most discount brokerages fail in a market downturn and that history would probably repeat itself. With the collapse of most discount brokerage models in today’s market, history did do exactly that. Chances are that in the next upswing, however, discount models will gain momentum once again.
The strategy for defending a full service commission really hasn’t changed much. The research from a decade ago is still true today: up to 85 percent of all sellers will pay for Premium service provided the agent can demonstrate how their approach helps the seller achieve the highest possible price in the shortest amount of time.
Furthermore, commission objections are still best addressed by asking questions rather than trying to hard close the seller on your value. For example, instead of telling the sellers they should list at a full commission because buyers’ agents will show the listings with the highest commissions first (which probably violates the law), a better approach is to ask the following question,
To obtain the highest price possible for your property, you need someone who is a powerful negotiator—isn't that correct? (The obvious answer is "Yes.") So if you hire an agent who can't even negotiate a full commission on their own behalf, how effective do you think they will be in negotiating the maximum price for your property?
The shift from telling to questioning is still one of the most important fundamentals in all types of negotiation.
How to Win More Listings
In 2001, what would the tech savvy agent offer a seller to make their services standout from the competition? This list from “Do You Have a 2001 Listing Presentation?” would benefit many agents today that have yet to adopt these proven tools. When agents describe how their Premium Marketing Plan is unique, here’s what they could use back in 2001.
1. Your listing will be posted on my personal web site, my company web site, Realtor.com, and will include a "360" tour.
2. Your listing will be advertised in my email newsletter that reaches my past clients and my sphere of influence.
3. Your yard sign with have an 800-phone number that allows me to obtain valid phone numbers of people who call for information on my listings.
4. You will also have access to our on-line tracking system that allows you to check the status of your transaction 24 hours per day.”
The last point is important. Transaction tracking systems have been around for a decade and yet they’re just now starting to become commonplace as more agents move to doing paperless transactions.
Need more timeless tips? If so, don’t miss art 2 of this Part Series.
Posted by Bernice Ross, Join us this week on RealEstateCoachRadio.com as Coach Patti Kouri shares her Insider Coaching Secrets to Make Your Business Soar. Here's what Patti will be covering: Monday: How to sell anything from pencils to penthouses, Tuesday: Seven Ways to Stay Connected with Your Sphere, Wednesday: Are You Battling Time and Losing? Thursday: Secrets to Creating a Winning Attitude, Friday: Get Rid of Worry Lines without Plastic Surgery.
Comments