Agents- The Vicious Circle of Low Fees

We have all been there … “Can you drop your fees?”

… the landlord/vendor tells us that they loved everything that we showed them and how different our approach is ….but then asks us to lower the fee to bag the listing, to win the business. So, most agents lower the fee. Then, because we lowered the fee, we fail to produce the result the landlord/vendor needs. It required a larger investment of time, money, advertising, effort (whatever), and we destroyed our ability to make those investments but we dropped the fee.

…. what if you already started off with low fees? Even worse!

Anyway, back to the story, since as the estate or letting agent, we don’t deliver the better results, our landlord / vendor believes that all agents are all the same. They believe that the valuer / lister exaggerated and overestimated their real abilities to make a difference, and they come to believe that no agent can really get them what they want. So they decide it isn’t worth paying more when every agent tells them that they are going to produce better results at a lower fee .. but never do.

What is the worst part of all of this? The whole estate and lettings agency industry responsible….

Every estate agent and every letting agent has a choice …. your service can either be seen as one that is revolutionary, out of this world, remarkable, indispensably awesome OR it can  end up being viewed as a commoditised. It’s your choice

definition of commoditised

to render (a good or service) widely available and interchangeable with one provided by another company

Ouch …

Caving in on fees means you will not have the resources to make that client feel your service is revolutionary, out of this world, remarkable, indispensably awesome … meaning you will have to offer a bog standard service like every other agent ie commoditised ….. and being commoditised isn’t how you help your dream landlord or dream vendor.

If you are going to really help your dream landlord or dream vendor, if you are really going to be their trusted advisor, if you are really going to be consultative, you have to sell well enough to get your dream landlord or dream vendor to make the investment that they need to in order to produce the result that they want.

What is it going to be?

(a) Are you an agent that offers a service that is widely available and interchangeable with one provided by another estate/letting agency (ie a commoditised agent) .

(b) or an agent that offers out of this world, remarkable, indispensably awesome service that is unique as you are their trusted property advisor.

You cant offer an out of this world, remarkable, indispensably awesome service on cheap fees … that is simple economics

If you opted for the second choice … then you need to prove to the dream landlord/dream vendor the value that you are creating. You need to describe to them how a fuller fee is going  make a difference, and how without it you, you won’t be able to provide what they want and they won’t get what they want …. and here is the killer bit … and if I had a pound for every agent who told me this story …. if you have to, you have to learn to say no and to walk away.

 

 

Christopher Watkin

I teach, guide, support, mentor, consult, counsel, partner many hundreds of UK Estate and Letting Agents in their quest to grow their estate and lettings agencies business. Old school techniques of touting, landlords wanted leaflets, ring us for a free valuation, we have sold this in your street leaflets don't work anymore. There are too many competitor agents .. meaning cheap fees are epidemic, overvaluing is almost a norm to get the stock and don’t even mention about the online/hybrid threat. So a few years ago, I set about looking around the UK and spotted that certain agents (not many mind you) in certain towns were still seen as the ‘go to person on property’, the person the newspaper editor rang up every week for a comment and I looked at what they did and they were doing some thing quite remarkable…. Only one thing but they were doing it so well .. and reaping the reward in terms of decent listings and decent fees, happy staff, decent sales pipeline and exchange income, managed lettings portfolios in the many hundreds .. but more importantly, they really enjoyed the job… they enjoyed getting up in the morning and people looked up to them Over 400 agents around the UK are on a mission to change the way our Estate and Lettings agency profession is perceived and looked upon, doing it town by town, city by city. I guide these 400 agents, teach them, mentor them and support them to be seen in a different light, to be seen as the ‘go to person for property’, actually be the ‘local property expert’ and prove it. Christopher Watkin 07950 147 572 christopher@christopherwatkin.co.uk

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