“We really like you and what your agency has to offer us, but your fee is much higher than what we are paying now.”
If your prospective vendor or landlord is dissatisfied
enough to move agents, they are dissatisfied enough to pay more for the better
result that you are offering. The difference between your fee and their current
agent’s fee is the cost of doing away with the frustration that is compelling
your prospective vendor or landlord to change agents. So what do you do?
You could just match their fee? Yes you could match their fee, but if
you are doing is just matching their fee every time a dissatisfied vendor/landlord
says this to you, you aren’t selling anything. You are allowing your
prospective landlord or vendor to gamble, to make a bet that what THEY are
doing is working for them.
Quite often the issue isn’t the
fee but the asking price of the property. A change of for sale board stil wont
sell a £300,000 semi that’s on the market for £360,000. People blame their
agent, ignoring the fact they have an over inflated asking price and that only
their lousy existing agent needs to change. This is why so many vendors change
from one agent to the next agent to the next, never getting the result that
they really need (ie getting the house sold).
The agents that take on the over priced
property don’t sell the vendor on change. Now I know some of you reading this
will say, ‘you need to ahve it on the books if you are going to sell it’ and ‘you
can always reduce the asking price’. But if that £300,000 semi has been on for
20 weeks at £360,000 and the potential vendor says they want to swap agents to
you, but at the 0.75% fee the existing agent is charging and they will reduce
to £355,000 (because their bottom line is late £340k’s).
Do you have the balls
to tell them you will therefore refuse the listing as the property is over
priced? (Dont worry, some shinny suited
Vauxhall Corsa driving whippersnapper of a agnet will put it on to hit his
listings target for the month.) They just replace the current agent, leaving
the dissatisfaction right where they found it. It the same with landlords who
want 3% managed on some frankly disgusting $h*t holes of a property that would
put a dog in. ...
You might even need
to go below their fee to get it? If you are actually reducing the fee to
get the listing to hit your targets, then you aren’t selling your firm, your
services or what your agency can offer the vendor(or landlord) .. in fact the
only thing you are selling is your FEE. Again, it gets even worse when you
haven’t got the b*lls to refuse to list their £300,000 ‘clutter infested dog
eared rotbox’ as it is £60,000 over priced. You aren’t selling the greater
value that you create. Instead, you are removing the resistance to using your
agency by eliminating fee or asking price as an obstacle. You are trying to
make selling easy. This lets the vendor off the hook when it comes to change.
They aren’t paying for new value. This is what weak listers/valuers and weak
agents do
.
Why not increase your
fee? When you ask for more money, your prospective client has to get
serious about change. Even more serious if you tell them their current asking
price is way off the current market price (there are ways to do this which don’t
offend and work). It gets even more serious, when you say (and it takes b*lls
to say this), that you wont take them on unless the price is dropped and they
pay your top fee.
They are now paying
more and getting less, and they are going to expect a lot from you. If you are
really selling, you’ve helped your vendor / landlord understand what is going
to need to change on their end, in addition to them paying more for the results
they need. You will have told them about the time, the energy, and the
leadership that is going to be required. And you will have sold them on the
value that you are going to create and why it is worth paying more to obtain.
If your prospective vendor / landlord is dissatisfied
enough to move, and they really need to sell (because you only get paid when
they do sell not on listings), then if they are serious, and you prove to them
that this is the right action for them, so they trust you, they will pay more
for the better result that you are selling.
.. but before I go, let me leave you with this little ditty
I was taught in 1993 by my first Area Manager. He said, sometimes (but not all
the time) you do have to drop the fee .. this is the real world. So, if you are
going to be a good valuer / lister, you need to have this triangle printed on
the inside of your folder .. really small like. This triangle will save your skin
as a Valuer .. follow this triangle and you wont go wrong .. and so I share
this with you.....
So, firstly draw a triangle on a piece of paper.
Next, on each corner of the triangle, write one of the
following words ...
- · VENDOR MOTIVATION
- · FEE
- · PRICE
How does it work?
When you are sitting in front of the potential vendor,
look at this triangle. Look at it honestly and you should only put a property
on the market if you have at least two of the three corners covered.
- If the fee and price is right .. take it on .. the property will sell
- If the vendor motivation and fee is right (but the price is wrong) .. the vendor motivation will eventually force the price to come down
- If the fee is right, but the motivation and price is wrong .. a high percentage of no sale is worthless.
- If the price is right, but the fee is wrong .. yes it will sell but you will get peanuts
.. the scenarios could go on but the triangle has never let
me down (nor it has thousands of other Valuers