So even from the beginning of my career in real estate , I wrestled with how real estate fees were paid . Of course , agents who are very good at their job will earn their fee . But as we all know with real estate agents , homeowners don ’ t always get what they pay for . There are so many people having horrible experiences with the real estate agent they ’ ve hired to sell their home , yet those agents charge the same amount for their services as I do . Which has always bothered me .
There are over 5,000 agents in my marketplace where I work in Boise , Idaho ; nationally there are well over a million agents . Another way of saying that is : you are in the minority if you don ’ t have at least one relative who is a licensed agent . The reason there are so many Realtors is because it is so easy to get your license , which has led to a nationwide problem of having too many inexperienced , unprofessional , and unsupervised agents doing less than stellar services for homeowners , but with most of them still charging the same 6 %. This trend plus new technologies are slowly leading the demise of the traditional model of selling homes in the U . S .
Sales VS . Consultative Culture
I want to attempt to change the way real estate is sold or at least give homeowners more options and add more transparency in the process of selling homes . I believe the process of selling homes should move away from traditional SALES culture , into more of a CONSULTATIVE culture .
Do you look at your accountant as a salesman ? Probably not . Why is that ?
The difference is that you pay your accountant for his or her advice so that you can avoid spending more on taxes than you should . You pay your accountant to handle important tasks that you don ’ t want to do and / or don ’ t want the responsibility of screwing up which can lead to trouble with the IRS .
Do Accountants , Doctors or Attorneys give you a sales presentation before you hire them ? None that I know . They give you a consultation . In most real estate offices around the country they teach Sales Scripts to agents to sell you on why you should hire them . They also practice scripts to get homeowners to lower their price . These Sales Scripts work , which is why they use them . The problem of course is this breeds a sales culture rather than a consultative culture .
I despise using scripts , and have never recommended them to the agents I train . The first real estate office I spoke with when I initially got my license ( a very large national company that should remain nameless at this point in the story ) required that new agents spend dedicated hours each week learning and practicing scripts . I couldn ’ t believe it . I was sure the scripts worked but that was not what I signed up for when I decided to start my own real estate business .
Scripts are used solely to sell , rather than to advise and consult . Scripts are needed when you can ’ t think for yourself or provide advice .
What if you found out that your doctor had practiced sales scripts to get you to pay for higher priced medicine than you needed so he could benefit from it personally ? Yikes , right ? The thought of it is unsettling to me . I know I wouldn ’ t trust anything else the doctor told me .
What if we paid accountants based on a percentage of the total you paid in taxes ?
Suddenly it seems like a conflict of interest .
You might wonder how important it is for your accountant to save you money and to have your best interests in mind . In that situation you would still have honest and effective accountants , but you would also have others who weren ’ t . I know I would have a harder time trusting advice from an accountant under those circumstances .
A similar “ conflict of interest ” exists in real estate . How do you know you can trust the advice you are getting from an agent when they pressure you to lower your price . Is it good advice or is it because they are just focused on getting a quick commission ?
Why Change the Real Estate Fee Structure :
If the fee the Realtor makes is NOT based on the sales price , then I feel you could trust the advice of the real estate agent at a much higher level . It becomes more Consultative based , just like it is with your accountant .
Others have attempted to remove the sales price from the real estate fee structure ( using a flat fee of some kind ) but ultimately failed because they also reduced the services they offered to sellers and provided limited or even non-existent consultative support throughout the process . I studied these agents and brokerages and it is clear to see they all had the wrong approach and sellers often lost thousands and endured many more months on the market rather than saving money .
In 2017 I will be implementing my Consultant Based Approach , but at the same time I will continue to offer the traditional model as well . I want to give home sellers options . This new approach will definitely ruffle the feathers of agents throughout my marketplace because this is “ just not how it is done .” It is not my intent to undermine their business , but when you swim upriver you get a lot of push back . In the end it ’ s all about the client , so if other agents are threatened or unhappy with me , then so be it . I already have a couple of clients who have opted for the new approach , and it ’ s been an awesome experience for everyone .
I ’ ve also written more about this consultant-based approach at www . ListingScience . com
I am very excited to bring this consultant-based approach to the Boise area . This is something I ’ ve wanted to do since I started my real estate career .
Let me know if you want to learn more about it . Cheers , Mike Turner
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