Now You'll REALLY Need To Justify Your Commission To Sellers Part 3

November 5, 2009

The walls of regulation in Canadian real estate are bound to keep tumbling down, so it’s no good complaining about it.  Our response to competitors charging less for their services shouldn’t necessarily be doing the same.  If your business’ calling card is low commission rates, you’ll attract people who are fixated on price, not on value.  That’s a losing game because any competitor can pull the rug out from under you in a second simply by charging less.  So your response to this de-regulation should be providing more value to customers so that you can justify your higher fees.  Show people that they’re truly getting what they pay for.  Isn’t that what they deserve anyway?  

The same principle applies when pricing a new listing.  Many real estate professionals think they should appraise a home with a higher than market value price as a strategy to get the listing, and then reduce the price as necessary to make the sale.  They create a kind of backward bidding war.  The problem is, when you reduce the price once, people will think there’s no reason you won’t reduce it again.  If you reduce the price twice, why wouldn’t you do it a third time?  You also may find the seller won’t want to reduce the original price, meaning you run a high risk of never selling it at all.

But if you price the home at market value and justify the pricing to the client with a strong CMA, you probably won’t have to lower the price.  When you stick to your original price, you don’t give buyers any reason to think you’ll ever lower it and wait.  This often puts pressure on the buyer to buy sooner rather than later because they know they have nothing to gain by waiting.  They only stand to lose by waiting because someone else might buy the house.

So how do we provide more value as real estate professionals?  Not necessarily by working harder, but by becoming better at our profession.  The more prospects can see our ability to do our jobs, the less concerned they usually focus on price because we’ve shown we’re worth it.  Many real estate professionals merely rely on time and experience to become better at their jobs, but you can advance yourself in this business far quicker by investing back into your business and taking time regularly for educating yourself and learning from top producers.

The internet is where the future of real estate lies even more than it does today, and my business and expertise is dedicated to making real estate professionals experts at using the internet and technology for advancing their careers and making more money.  You can get there by taking any of my accredited continuing education classes.  All of these courses have been approved by the Registrar, REBBA 2002 for continuing education credits.

Filed under: Marketing Tips,Negotiating Best Practices

Tags: anti-trust, branding, closing, commission, competition, Competition Bureau, CREA, flat fee, Lawrence Dale, NAR, National Association Of Realtors, negotiate, negotiations, OREA, Realtysellers, Stephen Moranis, Toronto real estate board, TREB