This article is definitely worth a read if you have ever asked your realtor to reduce his/her commission! I hear from people quite often: "is the real estate business a good way to earn a?
Jun 8 2018 50169 1
This article is definitely worth a read if you have ever asked your realtor to reduce his/her commission! I hear from people quite often: "is the real estate business a good way to earn a living?" My answer to them is definitively, a YES! But there is a caveat. It is one of the hardest professions one can choose to do that includes long, sometime grueling hours, working weekends, unlimited calls, texts, and emails with no time restrictions, and often as not-- no respect for boundaries. This is the only business I know where you can take a crash course online for a few weeks, take a state exam, earn your license, and walk out the door and call yourself a real estate agent. There is so much more training that goes into this profession, and it's truly comparable to the level of hours one puts into becoming an educator and maintaining licensure in our society. There are continuing education class requirements ongoing that must be completed to keep one's license current. And nothing is free. There are numerous fees to maintain. But every business has expenses, ours is no different.
While we are forbidden to practice law or act as a financial advisor, we must have extensive knowledge of both in order to best represent the interests of our clients. That means, we must network and build a trusted team of professionals from whom we can gain insights and refer our clients when questions or challenges come up. In addition, when people begin thinking about selling or buying a house, there are a plethora of emotions that will inevitably cloud judgment and wreak havoc and fear of the unknown. We become counselors, as well as educators, therapists as well as mentors. We become deeply connected and involved in helping them navigate through the process. If we are doing our best, we are building a relationship/friendship, based on mutual respect with an ability to communicate openly and understand one another in striving toward a common goal.
Having the expert knowledge needed to perform our jobs well, is just one component of many other skill sets required. When you take the course to become a real estate agent, it does not include anything about being a sales person or skilled negotiator. There is no textbook included with the course that says you need to show some heart and empathy for the people you serve. No one tells you that you will/should always be "on" with a smile and an attitude of helping others. Those qualities or "skills" shouldn't have to be learned, but often need to be refreshed, because we are all just human. Life's circumstances influence us inside and out. We may call ourselves an introvert, when in reality we lack confidence to smile because we have experienced criticisms that lead us to believe we weren't valued. This is just another nuance of what we need to be able to recognize in ourselves as real estate agents engaging with people everyday. It's a job requiring many hats, and very importantly, a tough skin and open heart.
While this article is a good one with some great perspective that supports our professions' value, I can't help but ask the question before you read further: how many other professionals, i.e., doctors, lawyers, airline pilots, police officers, firemen, teachers, etc. would you ever consider asking to cut their paycheck? Food for thought...and my two cents. For the record, I love my profession, and I wouldn't trade it for the world!
Use Your Expertise to Justify the Commission
In part one of a three-part series, learn how to explain to prospects and clients that your specific real estate knowledge is worth the money they’ll pay for your services. MAY 2018 | BYTONYA EBERHART AND MICHAEL CARR
Everyone wants to feel appreciated, and you’re no different. You want your clients to see the value you bring to the transaction, but many real estate professionals are timid about tooting their horn to prospects and clients. You don’t want to come off as self-important, but you do want to educate customers about what you do—and most importantly, why you’re worth a commission check. Particularly in this digital age, where face-to-face communication is becoming scarcer, you might hear some of these aggravating comments:
“You made what off the sale of that home? It must be nice to ride around all day and make money.”
“I can save a lot of money if I don’t use an agent. That’s 6 percent more cash in my pocket. How hard can it be?”
“You can show me some homes, but I’m not going to sign an exclusive agreement with you. I’ll work with whoever brings me the best deal.”
“I’ll consider using you to sell my home if you’ll cut me a break on the commission.”
You know all the reasons you’re valuable, but this list is a resource you can provide customers. It’s part one of a three-part series designed to help you bust common misconceptions about your profession, drawn from our book, 31 Reasons Your Real Estate Agent Is Worth Their Commission. We’ve grouped our points into three value-building categories, beginning with knowledge.
Glean talking points about your experience in the field, which will come in handy if clients object to the amount they’re paying you. Read more.
You have better information to assess a home’s value. Homes listed with a licensed full-time real estate agent sell for nearly 26 percent more than FSBO listings—even after factoring in the agent’s commission—according to the National Association of REALTORS®’ 2017 Profile of Home Buyers and Sellers. Why? Mainly because you have intimate knowledge of the local market and what price it will support. Homeowners may have an idea of what price they want to ask for, but that figure is often not in alignment with market fundamentals. You have the professional training to assess your clients’ situations and position their home to sell for maximum value.
You understand the appraisal process. Buyers and sellers don’t always know why there is an appraisal and why it matters. Federal rules on appraiser independence requirements can add confusion to how a buyer or seller can communicate with an appraiser. A full-time agent understands that an appraisal is meant to help the lender determine if the sale price of a home will adequately support the loan the lender is giving to a borrower. You can explain how the process works to confused buyers and sellers so they don’t feel caught off guard and understand the need for an appraisal. You can also provide the appraiser with additional information, including comps and market analyses, to ensure the information that is most important to the value of the home is being considered.
You’re a professional dealmaker. Common sense might dictate that a professional salesperson’s talents are applicable to any industry, but nothing is farther from the truth. The average consumer can’t sell a vehicle as well as a professional car salesperson. The same goes for houses. A natural salesperson might be able to win the confidence of a buyer, but are they prepared for the next step? You can earn a client’s trust, but you also know how to handle contracts, negotiations, etc. Negotiating is generally done on the back end, when the details of the transaction come to the surface. In order to keep a deal together, you sometimes have to play hardball—especially when the opposing side drags its heels, potentially harming your client. Negotiating takes a lot of practice, which you’ve taken the time to master.Your clients need that expertise to keep a deal from falling through.
A Google search won’t teach your clients what you already know. The real estate business is a complex system. Your customers could search online for the answers to any state or national real estate test, and it still will not give them the full knowledge you possess. Buyers and sellers might be able to glean the basics of filling out a contract—but then what? Even if they could find every answer to every possible question, how long would that take? Google is indeed an incredible gateway to knowledge, but it is no substitute for the hours, days, and years you’ve spent applying your knowledge to real-life scenarios.
You do most of the thinking for your clients. The brain is a muscle, and when muscles are overused, they get sore and need recuperation. You can supply peace of mind—literally—to your clients by handling the most taxing parts of a transaction for them. And that’s worth every penny of a commission. Your clients don’t need to tax their brains in an attempt to gain knowledge or information you already have. You can let them focus on their bottom line while you engage with those who want a piece of it.
When you make money, your clients benefit. You might make a $30,000 commission on a million-dollar home, but you don’t keep all that money to yourself. Some of it goes back to your clients in the form of rewards for loyal customers, gas and meals when taking customers out on a day of showings, not to mention marketing expenses such as MLS fees, Google ads, listing photography, signs, and open house events, all to help sellers find a buyer for their home. You put your money where your mouth is.
You’re properly trained. It’s not possible to do what you do at your skill level without the proper training it takes to understand all the nuances of the industry. Not only are you properly educated and licensed to conduct business, you are required to take continuing education courses to keep your skills in line with current trends. Would your clients make that kind of commitment?
You have an eye for what sells. Staging is a key factor in selling a home for its full value. You know which improvements or repairs will bring maximum return on investment for your clients. You keep up with home style trends in order to make a property stand out and catch buyers’ attention. You’re skilled in portraying a story with listing photos, and you know how to highlight the attributes of a home and properly address the drawbacks.
You work in an age-old industry that has weathered ups and downs. The REALTOR® brand has been around for more than 100 years, and you are carrying on a legacy of continually putting systems into place to help consumers, set industry ethics standards, and find better marketing solutions. You’re backed by industry leaders who lobby for better training and laws that protect the client from fraud. And in the end, your clients are better off because of it.
"Sales isn't something you do TO someone; it's something you do FOR someone and WITH someone." --Anthony Iannarino Helping people is my "WHY;" showing that I care is my "HOW!" ....