When dealing with a competitor willing to cut costs, real estate agents have to match the price, show why their services are worth the extra money, or accept that they will lose some business if they opt not to slash their commission.
Although matching the price will generate more business, agents will earn less money for taking on extra work. Those who want to engage in value-added selling must prepare a listing presentation that touches upon the benefits they offer that make clients willing to pay more.
They should focus on their sale-to-list ratio, percent expirations, days on market, average sale price and unique services, among other information, emphasizing that the gain in net equity and a quicker sale will offset the higher commission fee.
If a home seller balks at paying more, the agent should ask them who they would hire if the fees were the same and whether the additional benefits are worth the added cost.
Finally, agents must be willing to let some business go, keeping in mind that standing firm when it comes to commission fees will cost them up to 15 percent of listings they attempt; however, a 1 percent reduction in fees will shave up to 33 percent off their profits.
Source: RISMedia (07/28/10)
Source: INFORMATION, INC. Bethesda, MD
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