The Real Estate Game … Are You Fast Food or Fine Dining?
What Is A Real Estate Agent
As defined by YourDictionary.com:
A professional sales person who sells houses, condominiums, and cooperative apartments (co-ops) for a living. The real estate agent legally represents sellers, even if he or she is working with buyers to show them properties. Real estate agents are paid on a commission basis calculated on the selling price of the house, which may be as high as 7 percent. The seller pays the commission. However, buyers can contractually hire their own agent to advise them on the buying process. In that case a fee, which might be a commission based on a purchase price, is paid by the buyer.
Hmmmm… There are some interesting things in that definition. But before we explore those, let’s talk about business in general.
What Is This Thing Called “Business”?
Let’s not pull out a dictionary for this one. We all know that “business” is the term we have coined for handling a transaction. Hundreds of years ago, before we coined the term, two parties exchanged goods or services for goods or services. A trade of something of value for something of value. Simple, right? Are you surprised, that we humans have complicated this so simple transaction to point that most of the public have no idea what it means to “do business.”
Do you think that the average person in the checkout line at the local grocery understands they are about to take part in a business transaction? I doubt it… people just don’t think that way anymore. They don’t think that in the exchange for these life staples for money is a business transaction. Or that in exchange for a day of work they are paid a wage. This is a business transaction. We have become conditioned to not think of it as business. We are conditioned to think of business as people in suits sitting around a table haggling over the terms of a deal as “doing business.”
The Pitfall Of This Conditioning
We have forgotten what it means to handle ourselves as a business person and act more like a consumer. What do I mean by this? When was the last time you thought you should be paid more? When you thought to look at what you are using to trade for that higher wage? It’s one thing to ask your boss for a raise, it is a whole different matter to tell your boss what you have to offer and what it is worth.
Speaking of worth… I have paid for hamburgers all over the world and at all different types of restaurants. Did they all cost the same? No! Is the fast food burger equal to the plated burger from a 5-star restaurant? No! We must realize that in every transaction we take part in we are conducting business. Thinking like a consumer is just that, we walk into a store, grab an item and pay the price that is listed. When was the last time you haggled over the cost of corn flakes with your local grocer? The sooner we shift our thinking from consumer based to business based the faster we will open the doors to success.
So, What Is The Message
I sell services into the Real Estate Marketplace. Over the years, I’ve come to the conclusion that a vast majority of agents I talk to think like consumers. Let’s go back to that definition… “The real estate agent legally represents sellers, even if he or she is working with buyers to show them properties. Real estate agents are paid on a commission basis calculated on the selling price of the house, which may be as high as 7 percent.” It is very broad, it has to be, there is a lot for the agent to do. The real estate agent is “hired” by a property owner to not just represent them, but to make the best sale possible for the seller. In return, the seller is paying the real estate agent a percentage of the profit from the sale of the property. Simple, its business. The exchange of something of value for something of value. Real estate agents need to shift their thinking from consumer based to business based.
Now I Have Gone Too Far! Really? I Don’t Think So…
As a real estate agent, you are responsible to your client for the sale of their property. The best deal is expected by the client. The real estate agent must make sure the property is in the right condition to be sold. The agent that thinks like a consumer just signs the contract, puts up a yard sign, then sits back and waits for someone to walk in off the street, and ask to ring up the transaction. The agent who understands that this is a business transaction works with their client to manage their expectations. They walk through the property and make recommendations to their client on how to best show the property. They will bring in a home stylist to make the property feel welcoming to a potential buyer. They will make sure that the exterior is ready for a prospective buyer to see… that first drive up the driveway and the walk to the front door are a critical moment for the potential buyer. They will make sure the property is professionally photographed, because they know that the very first impression and what really leads to a walk through in this day and age are the images they post on the internet. So, have I really gone too far?
Time To Reset The Table (Pun Intended!)
Let us go back to my hamburger analogy.
You can walk into a fast food restaurant and read the offerings off a wall menu. Or you can sit down in a 5-star restaurant and read how the chef has chosen the best ingredients and combined them with love and skill to present you with a mouthwatering plated meal. They are both just burgers, but are they? Are they equal in cost? Are they really the same thing?
What Kind of Agent Are You
Are you the agent that markets the property? Are you the agent that makes potential buyers mouth water? Are you the agent that gets multiple offers on the same property at the same time? If you answered no, let’s look at how we can change that.
The Most Important Step
Start thinking and acting like this is a business. As a real estate agent, this is your business, your reputation, your bank account that you are in control of. Look to make connections and relationships with those vendors you will need to make a property sell for the best price possible. Make the client you are working with so impressed with the level of service you offer that they spread your name around. Have you ever heard a person bragging about the meal they ate at a fast food restaurant? No! You need to make your client know you are giving them the 5-star treatment.
Real estate agents market properties, or they lose the contract. What do I mean by marketing a property? Make deals with your peers to buy services at a “bulk” rate. Get the services you need to make that property glow at the best price possible. How many times have you walked into a property that you are being asked to list and all you see is dirt. You know you are going to take the listing, and you hope you can get the seller to clean the property. Instead of hoping, talk with the other agents in your office and go as a co-op to a local cleaning service. Work a deal with them for a discounted price, knowing that with the co-op you can deliver a lot of work. You client will be amazed when you tell them you scheduled a cleaning service to get the property polished and ready for a walk through. You will have less to worry about knowing you are listing a clean and tidy property. You can also work the same type of deal with a local landscape company. Make sure the grass is cut, the trees and bushes are trimmed, there are no leaves sticking out of the gutters.
Pushing The Boundaries
So now that you have the property cleaned and groomed, let us make it even better. Bring in a professional stylist and a professional photographer. Work with them to take the property from a lived-in space to a place that a buyer can imagine their new life in. I know… I hear it all the time… “I just can’t afford it…” No offense, blah blah blah… Are you a consumer agent or a business agent? Are you the fast food agent or are you the fine dining agent? Figure out how to afford these things. Again, put together a co-op and get better pricing. Think of what your client will think and say to their friends and neighbors when they see you walking through the property with your “team” discussing the best look for each room. What is the best angle to capture this room for publishing on the MLS? Think of what potential buyers will think of your listing when you work with experts on the best way to market the property. Remember, marketing is a fancy word for selling. And yes, as the real estate agent contracted by a seller, you are the one responsible for putting this property in the best marketed position to sell for the best possible price.
What Are The Outcomes
When you stop thinking like a consumer and start thinking as a business person, you will find that you are not interested in the profit from a sale, but in the profit from all the sales you make in a year, a month and a week. You will stop worrying over a rounding error in costs to market a property and start worrying over how you will handle all the business you develop. Yes, I said develop. Business is not going to just drop in your lap, you must develop it. When you market a property as opposed to waiting for that walk in, you will find that you have a very happy client at the end of the process. And happy clients mean that they will refer you to others. The best way to develop business is by referral, word of mouth. And think of it this way… if you are not wowing your clients, what do you think they are saying to their friends and family about you? Have you ever gone to a restaurant that a friend or family member told you was a bad experience? I didn’t think so.
As a real estate agent, you are the business person in charge of the sale of the property you have been contracted to sell. You, the real estate agent, have to create the relationships you need to help you sell properties for the best possible price. And yes, my good real estate agent, you have only yourself to blame when your client doesn’t re-sign with you and signs a new contract with a different agent to sell thier property. So … How are you going to market yourself and your listings? Fast Food or Fine Dining?
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