A guide to help you stop reducing your agency fees
Even if you have qualified your landlord or house seller correctly, there are still times when your landlord or house seller asks for a reduction in your fees. How do you cope with that? How do you keep your fee up and still get the landlord/house seller to use your lettings/estate agency ? It really makes you want to cry sometimes, doesn’t it?
Fees are such an emotive issue for a letting agent / estate agent. You don’t want to charge too much and lose the landlord or house seller. Then again, you don’t want to charge too little and not make enough for the landlord or house seller to be profitable. At first sight, a landlord or house seller asking for a fee reduction is a big, big problem. However, it is actually a good sign because it shows that you are close to signing them up.
What you must not to do is reduce your fees without rhyme or reason, as this is educating your landlord or house seller that every time they want a fee reduction, they just need to ask and you will do it.
What you need to do instead is establish exactly what service you are delivering to them. You need to find out what it is that the landlord or house seller really wants from you, and what is a non-essential. If you can cut the non-essentials from your packaged offering, then you can offer your client a more bespoke package at a reduced fee. Your client is happy, and you are happy because you have signed up a client and not reduced your hourly rate or devalued what you do for clients.
Ah, but Chris, what if you don’t have the option to trim away parts of what you will do for the client? You may find that one of these methods may help eliminate the stalemate: The first is that you explain that the fee is what it is, and if they don’t want to pay this fee you will happily walk away, no hard feelings. Sometimes this works, and they still sign up. Or you should restate the benefits of using your services and how this will help them achieve their goals (especially if the asking price is high).
Another approach would be to demonstrate to them why it costs so much to sell or let a property and why you don’t have the room to reduce your fees. Or you explain (it needs to real and credible) to illustrate how other landlords/house sellers have also had doubts about your fees, but achieved great results, which justified your fee.
You could offer stage payments, if they are worried about the hit to their cash flow. (letting agents, you could spread the upfront set fee over a few months) or finally, agree a different pricing structure based on results achieved. (Estate agents – You have quoted 1.5%, client wants 1%. Suggest you say if the property sells below a certain figure its 1% but if it sells above that figure, you will charge 1.75% ).
These are just some of the things I have come across in my years in estate agency and lettings. If you know of anymore, do let me know. Try them yourself .. you might just be a happier agent?
What does anyone else think?
(For more articles like this, please go to the blog that helps agents get more business http://how-to-grow-your-lettings-agency.blogspot.co.uk/)