The silent killer of your lettings agency? Neg’s Commissions.
Letting and Estate Agents don’t often command much respect, do they? Modern Letting and Estate Agents have created a business model so opaque that landlords, vendors, tenants and buyers don’t really understand all the work done by Letting and Estate Agency staff. The result is that they often don’t value us the way they should. In the future, the idea of Letting and Estate Agents, on the High Street, as physical space MIGHT be vague or nonexistent with the onslaught on the online agents .
The way High Street agents can avoid this is by better educating all our stakeholders, especially our landlords and vendors about the role of modern agents, our vision for the future, and how the management of property and the selling of property brings value to them.
The ability to network is critical in a social work environment, whether that’s a Letting and Estate Agency who is a corporate, an independent Letting and Estate Agency, High Street, Hybrid or even online a corporate or any other kind. This is because we are reliant on those landlords and sellers to give us the properties to rent/sell, to do our jobs effectively. Agents, however, are notoriously poor at networking and marketing themselves
Looking particularly at lettings (although the same could be said for our cousins in the estate agency arena) where historically, those attracted to the field of lettings, did so because of their love of managing the property, not getting new properties to let. However, to be a good letting agent today requires not just great people skills and ability to know landlord and tenant law, but exemplary networking, self-promotion and marketing skills as well.
Up to a few years ago, letting agents didn’t need to go out and get new business and new landlords.. Because it came to them. Whilst the letting market has doubled in the last ten years, the number of letting agents has tripled (info from Rightmove)
If landlords and home owners are unclear about what we, as an individual letting agent offer and what we do, but more importantly, WHAT MAKES US DIFFERENT TO EVERY OTHER AGENT, why would we expect them to be aware of our firm, let alone swap agents and use us?
Part of the problem can sometimes exist in the structure of Letting Agents. In a lettings agency for example, most agents incentivise the staff on movein’s .. If you are a Lettings Neg, are you going to bust a gut over six or twelve months, trying to woo a landlord to bring you their business, or just try and relet this month’s properties, where you already have the property on the books and you can hit your target by getting another tenant in now … and anyway, you (the neg) might have moved jobs by then?
Bonuses/Commissions in lettings, and the culture of bonuses, are responsible for some of the lettings agency woes when it comes to growing the lettings portfolio. Bonuses/Commissions reward Neg’s immediately with cash which reward short-term successes (move ins) without regard to long-term growth of the business (get more landlords). Its no wonder that you as the boss want to grow your lettings portfolio, when in fact all the Neg’s want to do is hit their monthly move in target
Just think on, think outside the box and think if the commission structure you have actually grows your business or just keep things ticking along??