Will you drop your fee Mr(s) Agent ?
“We really like you and what your agency has to offer us, but your fee is much higher than what we are paying now.”
If your prospective vendor or landlord is dissatisfied enough to move agents, they are dissatisfied enough to pay more for the better result that you are offering. The difference between your fee and their current agent’s fee is the cost of doing away with the frustration that is compelling your prospective vendor or landlord to change agents. So what do you do?
You could just match their fee? Yes you could match their fee, but if you are doing is just matching their fee every time a dissatisfied vendor/landlord says this to you, you aren’t selling anything. You are allowing your prospective landlord or vendor to gamble, to make a bet that what THEY are doing is working for them.
Quite often the issue isn’t the fee but the asking price of the property. A change of for sale board stil wont sell a £300,000 semi that’s on the market for £360,000. People blame their agent, ignoring the fact they have an over inflated asking price and that only their lousy existing agent needs to change. This is why so many vendors change from one agent to the next agent to the next, never getting the result that they really need (ie getting the house sold).
Now I know some of you reading this will say, ‘you need to ahve it on the books if you are going to sell it’ and ‘you can always reduce the asking price’. But if that £300,000 semi has been on for 20 weeks at £360,000 and the potential vendor says they want to swap agents to you, but at the 0.75% fee the existing agent is charging and they will reduce to £355,000 (because their bottom line is late £340k’s).
Do you have the balls to tell them you will therefore refuse the listing as the property is over priced? (Dont worry, some shinny suited Vauxhall Corsa driving whippersnapper of a agnet will put it on to hit his listings target for the month.) They just replace the current agent, leaving the dissatisfaction right where they found it. It the same with landlords who want 3% managed on some frankly disgusting $h*t holes of a property that would put a dog in. …
You might even need to go below their fee to get it? If you are actually reducing the fee to get the listing to hit your targets, then you aren’t selling your firm, your services or what your agency can offer the vendor(or landlord) .. in fact the only thing you are selling is your FEE. Again, it gets even worse when you haven’t got the b*lls to refuse to list their £300,000 ‘clutter infested dog eared rotbox’ as it is £60,000 over priced. You aren’t selling the greater value that you create. Instead, you are removing the resistance to using your agency by eliminating fee or asking price as an obstacle. You are trying to make selling easy. This lets the vendor off the hook when it comes to change. They aren’t paying for new value. This is what weak listers/valuers and weak agents do.
Why not increase your fee? When you ask for more money, your prospective client has to get serious about change. Even more serious if you tell them their current asking price is way off the current market price (there are ways to do this which don’t offend and work). It gets even more serious, when you say (and it takes b*lls to say this), that you wont take them on unless the price is dropped and they pay your top fee.
They are now paying more and getting less, and they are going to expect a lot from you. If you are really selling, you’ve helped your vendor / landlord understand what is going to need to change on their end, in addition to them paying more for the results they need. You will have told them about the time, the energy, and the leadership that is going to be required. And you will have sold them on the value that you are going to create and why it is worth paying more to obtain.
If your prospective vendor / landlord is dissatisfied enough to move, and they really need to sell (because you only get paid when they do sell not on listings), then if they are serious, and you prove to them that this is the right action for them, so they trust you, they will pay more for the better result that you are selling.
.. but before I go, let me leave you with this little ditty I was taught in 1993 by my first Area Manager. He said, sometimes (but not all the time) you do have to drop the fee .. this is the real world. So, if you are going to be a good valuer / lister, you need to have this triangle printed on the inside of your folder .. really small like. This triangle will save your skin as a Valuer .. follow this triangle and you wont go wrong .. and so I share this with you…..
So, firstly draw a triangle on a piece of paper.
Next, on each corner of the triangle, write one of the following words (it doesnt matter which order you do it in …
- VENDOR MOTIVATION
- FEE
- PRICE
How does it work?
When you are sitting in front of the potential vendor, look at this triangle. Look at it honestly and you should only put a property on the market if you have at least two of the three corners covered.
- If the fee and price is right .. take it on .. the property will sell
- If the vendor motivation and fee is right (but the price is wrong) .. the vendor motivation will eventually force the price to come down
- If the fee is right, but the motivation and price is wrong .. a high percentage of no sale is worthless.
- If the price is right, but the fee is wrong .. yes it will sell but you will get peanuts
.. the scenarios could go on but the triangle has never let me down (nor it has thousands of other Valuers
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