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Posts tagged ‘Commission’

30
Nov

Commission Discussion 101

commission
picture courtesy of Nick Youngson. link
Generally I have done my best to stay away from the great commission debate. In a lot of ways its kind of a moot point. If you are a seller you can pretty much pay whatever you want. You can even pay nothing and sell your home yourself. But a few weeks ago I was lucky enough to have one of our top agents at my Mastermind session and he made a point that has really stuck with me. He said that in his experience 25% of the people he meets never talk about commission. They completely understand the value he brings to the table and are willing to pay for his insights, experience and market understanding. Then there is another 25% who see little value in his offering. These people firmly believe that mls is the only thing they need to get a home sold and will list with the person who will do it for the lowest commission. Usually they are disappointed in the outcome and statistics have proven that on average, if they do sell the home themselves, they receive 13% less than they could have by using a Realtor. Then there’s the other 50%. That middle group that is essentially your battleground. These are the people who you need to prove your value to.
So, what is your value proposition? We hear about it a lot but if you were put on the spot, could you adequately explain why you deserve the commission you want? I’ve been at it long enough to know what my value is. I have practised it over and over and over again. I know how to deliver it in a way that doesn’t warrant a response. There is no discussion, no debate, no counter proposal. It’s on the table. Lets move on and sign up this listing. Of course you can get easily pulled back into the debate but you have to be resolute in the discussion. Of course you won’t win them all especially when a potential seller says that another agent will list their house for less and supply the same level of service. When that happens my response goes something like this;
“I appreciate the choices that exist for you, and across every good or service that exists there are several price points. You can buy a $20k car or a $50k car. Both will get you from A to B. But the cheaper model may take more time. It may choose a route that is bumpy or unpaved, the radio only gets one AM channel and the seats are uncomfortable. Yes, you arrive at your destination but the experience in getting there was unpleasant. Like the better car, the experience you get with me will be unparalleled. I know where I am going and I know how to get there based on my many years of experience. My understanding of the conditions in the road play an important role in determining strategy for arriving at our destination quickly and successfully. In addition, my service has no chance of a breakdown. My team is highly tuned and able to anticipate and solve every problem and the car that you drive will look its very best throughout the journey”.
The debate is often easier when the difference in commission rates is larger but stories and comparisons always work the best and I believe it is fair to say that every person who opted for the cheaper item or service, whether it be a car or computer, lawn care or renovator was disappointed in their decision.
Mark McLean is the Broker/Manager at the Bosley Real Estate Queen St W office, the Immediate Past President the Toronto Real Estate Board and a director at the Ontario Real estate Association . The opinions expressed here do not reflect the opinions of TREB, OREA or Bosley RE

26
Jan

List High To Double End? That’s An Interesting Strategy.

stubborn
Let me first say right off the bat, that I have no way of knowing if this was the intended strategy, but in Mastermind last week we heard from an agent who showed a house that, by his own estimation, was a bit over-priced. His clients really liked it but they were $50k apart. The listing agent was quite adamant about the price and said that the owner had no interest in negotiating. Our agent said his clients were prepared to play the waiting game. Give it a month, the home was sure to get reduced. But than it sold…the listing agent double ended it….at a price closer to where my agent’s clients were thinking.

The story highlighted our discussion on pricing to get listings. It planted a seed in our minds that maybe, just maybe, an agent would give a price that was on the higher side of the CMA scale in order to get the listing. Well certainly that is well within the realm of possibilities. I mean if you bring in three agents to price your house, and one gives you a price $50K more than the other two, wouldn’t you at least consider going with the higher number? It’s called buying the listing. And while it’s probably not the best marketing strategy, it does put your face on a sign. Of course the other side of the story is that the owner has unrealistic expectations but an agent takes the listing anyway. There are enough stories out there about walking away from overpriced homes but that is probably a discussion for another day.

Then the penny dropped. What if the intent was to eliminate all other buyer agents and then just wait for the call? You know…the one from the person who saw it on Realtor.ca and who’s plan is to only work with the listing agent to score a better deal? Again, I’m thinking to myself, “no, it can’t be. It’s way to risky”. But here’s the thing. There are lots of people out there who believe that working with the listing agent is the best way to win a listing in multiple offers AND get the home at the best price. So I suppose it is conceivable. Sometimes agents agree to drop commissions if they double end (bring in their own buyer) but it is a dangerous tactic for ANY realtor. So many things can go wrong. At the end of the day, representing two people (a buyer and a seller) is actually double the work. Everyone should know that going in.

I still believe that pricing is, in many ways, an art. It’s not just looking at what the neighbour’s house sold for (although that factors into it). There are hundreds of minute details that determine price. It’s something that can’t be learned in a day. My advice…stay on top of the market, wow Seller’s with your knowledge, marketing genius, and sales prowess.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

5
Jan

The RealtyLab Top Five Posts of 2014

top 5 RL 2014Happy New Year everyone. I hope that you are as excited as I am to start 2015 off with a bang. I find myself in such a great place these days. In 2014 I ran 1300 kilometres including two half-marathons, and was elected to President Elect of Toronto Real Estate Board. In addition I took on the position of Creative Director of Bosley Real Estate and grew my office significantly. All and all, I would put 2014 in the “win” category. We will just have to wait to see how 2015 unfolds, but I have already laid out my goals, although they are more like hopes, dreams and aspirations.
With all the other “stuff” that I was doing, my blog took a bit of a beating. While I actually collected a few more followers last year, I recorded fewer views because I was writing less. Finding time is increasingly becoming a challenge. Still and all, I had a couple of successes, so without further ado, I present the top five posts of 2014.

5. In this post I posed a simple question. Would our lives as realtors be easier if the Seller paid the listing agent and the buyer paid the buyer’s agent. Kind of an interesting theory once you work out how to roll the buyer agent’s commission into the purchase price. it is certainly one revolving topic around our office.

4. Nearly a year ago we had an office meeting where we discussed the pain of losing a listing presentation. What emerged was a discussion on removing all the variables from the equation. Being prepared seemed to be the most important point of the exercise, but the office got a lot out of this shared experience.

3. No other post received as much discussion. It revolved around the multiple offer scenarios. In this case we played out a fake multiple offer where the listing agent held back the highest offer but then made counter offers to each of the lowest offers. Confusing? Only a lot. At the end of the day, this type of negotiating required nerves of steel. The ultimate response was just to set the ground rules early and negotiate in good faith.

2. Back in November 2013 I was lucky enough to attend the National Association of Realtor’s Convention in San Francisco. Although the conference has a distinctly U.S. feel, every Realtor should endeavour to attend one NAR in their lifetime. I made a ton of notes but it took me a few months to actually blog about predictive marketing. In a nut shell, predictive marketing was done by a company that could analyze a series of seller events to predict the likelihood of them selling their home. It’s not as crazy as it seems.

1. And, the number one post of 2014 was a story I wrote about the return of the real estate brand. In this early entry I theorized that commission was no longer a competitive advantage for Realtors entering the business. Today’s Realtors need to perform above and beyond the general real estate population if they were to survive and given the enormity of that task, a newer agent might want to consider working with a brand that did a lot of the heavy lifting.

So there you have it. RealtyLab’s top 5 blog posts of 2014. I’m looking forward to breaking new ground in 2015 and hope that you will check in to see what I will write about in 2015.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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