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Posts tagged ‘sellers’

2
Oct

Mastermind Topic de Jour. Lost the Listing To a Relative

aunts referralProbably one of the most frustrating things a Realtor has to deal with is losing a listing to a relative. The farther removed the more frustrating it gets. This week, at our Wednesday Mastermind session an agent confessed that this had just happened to her. She had spent weeks with the potential sellers, offering advice, helping them make final preparations for listing. Lots of in-depth conversations about the market and strategies. She got a sense that the sellers really loved her. She met them after selling a unit in the same building and achieved the highest price level per square foot. She had sold other units in the building too. She was not a rookie. So on the eve of preparing the listing and doing final adjustments to the CMA to fine tune the listing price, the owners took a sharp left turn. She received an email stating that their aunt, in London, was going to recommend them an agent in Toronto. (Insert swear word here). She responded with kind words and good luck wishes. That was not what she really wanted to say though. This was bad news to bring to a Mastermind meeting but it got us all thinking about strategy in the hopes that we could save the listing. Remember those times when you walked away from an argument and thought, Oh, if I could go back in time I would have said THIS? Well now was the time to come up with the perfect counter attack…and we had lots of brains working the case. This is what we came up with;

“Dear Mr. and Mrs. Seller. Upon reflection I hope that, before it is too late, you discuss with your aunt the qualifications of the person she is going to recommend. I have sold X number of units in the building including the most recent one in which I negotiated the highest price per square foot for the owners. I am very familiar with the building and believe that I am in the best position to maximize your profit. Please ask your aunt how many suites her recommendation has sold as this will be critical information. I am happy to work in conjunction with your aunt and provide her with bi-weekly updates and showing feedback if that would make any difference”.

I loved the bit at the end because it hints at the fact that the aunt is only in it for the referral while our agent is making it about quality of service. In the end however, despite a noble effort, the aunt won out by claiming that her referred agent had more experience with “new families”. I’m not sure what that even means. Simply put, it’s hard to trump the family relationship. A similar thing happened to me many years ago, in a different market. After 90 days on the market the sellers eventually came back to me and my neighbourhood expertise and I got the job done. The fact remains that with as many Realtors as there are in the city, it might be worth having a discussion about family agents early on in the conversation.

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

9
Oct

The Real Estate Chain Reaction

science class
Today in Mastermind we talked about a series of events that, like a chain reaction, happen when you do everything you can to ensure the right conclusion. Here’s what I mean….do you remember back in high school chemistry we were asked to mix two chemicals together and then document the reaction? Often the students had different conclusions. Why? Because of the variables involved. Was it the measurement of the ingredients, the temperature of the flame or the length of time the chemicals were mixed?

In many ways, the outcome of your first interaction with a buyer or a seller, depends on the steps you take next. As with many agents I know, the first listing is often a friend or relative. This is a great way to get your career off and running, but, for ultimate success, you need to remove all chance and stick to the tasks that work. That means coming out strong. Prepare and stage the house to perfection, get a pre-home inspection, take care of any repairs, order virtual tours and professional pictures, tell the neighbours, hold an agent and public open house, etc, etc. the list is extensive and, quiet frankly, labour intensive and expensive, but at the end of the day you know that you didn’t leave anything out. I bring this up for one reason. You don’t leave any stone unturned because a perfect execution will lead to more interaction and more deals.
Today we talked about the real estate chain reaction and had some interesting examples of it. We heard from one agent who put an ad in the paper for a small house in a relatively unheard of neighbourhood. In a time when newspaper ads hold little value to a young demographic, it seems like a colossal waste of money, but a strange thing happened. The agent got a call from an interested buyer because their parents, who were helping with the purchase, had seen the ad. Bingo. Connection made.
Here is another one. An agent is out-door knocking. He just happens to meet someone interested in selling. Within a week the property goes on the market and sells successfully. The owners were so thrilled they used that agent to sell the mother’s house. That one sells quickly too. The agent then starts canvassing the neighbourhood to let everyone know that he sold it but to also ask if they know of any other people on the street are thinking of selling. Someone mentions the vacant house down the street. The agent writes a hand written note and leaves it at the house. The following week he has that one listed too. And so the real estate chain reaction begins.
I know to here are a hundred similar stories out there, and for each one there are ten others that end with one single transaction and plenty of lost opportunity because the agent didn’t do EVERYTHING, to ensure the chance of future business. You might even suggest that the agents just got lucky. Have you ever heard the saying “the harder I work, the luckier I get”?
There is another benefit of putting every ounce of effort into your listings. Your clients will know the lengths you went to and will recommend you to other people. So, get your business off on the right foot today. Agents fail because they go into the listing with the attitude that the house will sell itself. That might be true, but then what?
In a market where you are competing with 40,000 other agents, commission is no longer the competitive advantage. For ultimate longevity you need to go above the bare minimum of service. Not only will you sell the property but it will cause a chain reaction of events that will help grow your business and guarantee a fruitful career.

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.

25
Jun

Did Real Estate Get It Wrong On Who Pays The Commission?

rewrite the rulesWhen I think of some of the shenanigans that go on these days between agents and clients I can’t help wondering if our industry got it wrong. Did we made a fundamental mistake when everyone agreed that the seller should pay the listing and buying agent’s commission? If we could go back in time and re-write the rules, would we be subjected to stories we hear about today?

Think about some of the issues that we deal with on a daily basis. Agents are pitted against each other to offer comparable services for lower commissions despite the fact that they are the ones who lay out the most capital and accept the biggest risks. Buyers are looking to save on their home purchase so they contact the listing agent in hopes of gaining the inside edge. Multiple offers are rampant ( a condition of the market ). One may even argue that new business models (offering rebates or mere posting services) don’t solve the fundamental problem that exists…. The agency relationship.

One could argue that true agency, where buyers and sellers pay their respective agents for services rendered, doesn’t exist when only one person pays the bills. Did our industry get it wrong? It’s a question that comes up every time I hear about a buyer agent asking a listing agent to reduce their commission to make a deal happen or when a listing agent’s own offer miraculously wins in a multiple offer.

In a true agency relationship the seller would contract a listing agent to market a home including all the basket of goods and services that go with it, as well as ensure that the transaction went smoothly. The selling agent would have a unique understanding of the neighbourhood because he or she would be hired because of their local knowledge not because they were offering reduced commissions for doing two sides of a transaction. The seller and the agent would be free to negotiate a fee and the law would stipulate that the listing agent could not represent a buyer thus eliminating chances for error or corruption.

In a true agency relationship the buyer would contract a buyer agent to find a home, negotiate a sale price, and work with the listing agent to ensure a smooth transaction. The buyer’s agent would be duty bound to provide expert and professional service and work in the best interests of the buyer and be free to negotiate an appropriate compensation.

A few things would need to change. For instance, dual agency, also known as multiple representation would no longer exist. We would not have customers anymore, just well-informed clients. Controversy would no longer exist on how commissions are paid and what incentives are being offered. Flat fees might be more widely adopted and we might see the development of two types of real estate brokerages, those that list homes and those that act for buyers exclusively. Naturally there is the problem of compensating the buyer agent but perhaps bank legislation would have to allow a buyer’s commission to be rolled into the mortgage or sale price.

I’m not suggesting we need to throw out the current system. It’s not perfect but, for the most part, it works.

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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