Why your Value Proposition means Life or Death today’s industry
Why Real Estate Agents Need a Killer Value Proposition
With the ascent of websites like Redfin, Zillow and Trulia over the past 10 years, many homeowners have started to question the need for a real estate agent – in the form of a real live (and local) human being, that is. Well, we all knew this day would come. The good news is it will not be the death of the Real Estate Agent – instead, it will be the death of the “Do-Nothing” Real Estate Agent.
Homeowners are smart – they see how easy selling a home seems these days, and how much money they can save with all the cheap alternatives out there. While many of these services are indeed cheap, customers are learning the hard way that you really do get what you pay for. Those opting for a low-quality short-cut have probably never had a real professional sell their home – otherwise, they wouldn’t be inclined to go that route in the first place.
For starters, these sites (and not having a real estate agent) make the process of selling a home time-consuming, especially for first-time seller. And with self-service lies a veritable minefield of mistakes to be made with very little accountability to fix them. When out-of-state “agents” are tasked with pricing a home, for example, they may be armed with data but are out of touch with the forces underlying the local market. Overpricing or underpricing a home is one of the major pitfalls of not using a local agent, as well inadequate marketing, poor curb appeal and home staging, and potential inspection/title problems, to name a few.
With these sorts of palpable issues, it’s easy to see how a skilled local agent can offer more and get better results for sellers (and buyers too). In order to compete in today’s industry, an agent needs to deliver a robust, comprehensive value proposition that blows away anything offered by these low-cost alternatives. Agents offering anything less these days – without question – will fade into the dust of obsolescence, until they one day become extinct.
As a real estate agent, in order to thrive in an info-at-our-fingertips, “click-and-go” world, you must be willing to do more – and get more – for clients than any other service. This means justifying your commission not just with antics, but with a solid plan of action and a proven track record of performance.
The 5-Prong “Do or Die” Value Proposition
Your value proposition should include the services that cannot be efficiently offered by human-robot hybrid agencies, and it should illustrate to homeowners how they will come out ahead after accounting for a 5 or 6 percent commission. It’s true that some “click and sell” services offer some local human assistance for certain elements of the transaction, but what they lack is a local “project manager” who is highly motivated to make sure the whole thing goes smoothly. These services lack a skilled professional who is not only tuned in to local conditions, but invested in the sale of the home. Your job is to show homeowners why this is important, and how it can affect a sale price by a lot more than the higher cost of your commission.
Below we outline how to develop and communicate the specific ways your service generates a better bottom line for sellers. This includes how you will price, prepare, market, show, and close each home, and how to make sure every homeowner in the neighborhood knows it.
Many sellers don’t realize just how important the right price is – and how much the wrong list price (too high or too low) can cost on the final sale price. The average homeowner may know precisely how much they want for their house, but often it’s a bit inflated or unreasonable. Or, they may undervalue their home because it needs a little work – and an online service or inexperienced agent won’t give them the right guidance to get more money out of their home.
Sure, online services (and any agent or person with a computer) can punch in some data and spit out a Zestimate-style figure. Often these estimates are comically inaccurate; we all know it takes more work (and local insight) to pin-point the perfect list price. In your value proposition, discuss the process you use to maximize buyer engagement, volume of offers, and ultimately, the final price.
Most agents, of course, can do comparative market analyses while sleeping – with one smartphone tied behind their back. The Pricing Prong of your real estate value proposition needs to take it several steps further. Discuss precisely how you identify which comparable sales to use, and how you factor in the current degree of buyer demand, the season, and the price trends in the hyper-hyper-local area. If you already have a track record of getting more money for sellers, highlight this in your marketing and in your listing presentation.
Every prong of your value proposition is inter-dependent. For example, the list price you come up with will be dependent on condition (and appeal) of the home once it’s ready to be listed. Many sellers just don’t realize how much better their sale can be – in terms of days on the market and price – when they properly prepare their home. How you will help with this needs to be clearly outlined in your value proposition.
- Make a List: Conduct a thorough walk-through with the seller, during which you write down everything (big and small) that could be done to improve the sale. Sit down with the seller and decide which fix-ups and touch-ups will generate the best ROI, taking in to consideration the seller’s timeline, resources, and budget.
- Pre-Inspect: Depending on your market, you may want to order proactive inspections before listing a home. This can be an enormous value-add for sellers who may have been burned by inspections in the past, and can better inform your pricing and home prep decisions. Knowing what issues might come up during escrow can ensure a contract closes without a hitch.
- Enlist an Army: Top agents have a solid network of carpet installers, painters, plumbers, landscapers, roofers, you name it – for every potential job. You should begin vetting contractors now (if you haven’t already), and develop a tight-knit army of service providers. Then, you can shout from the mountaintop about how easy and efficient you can make the home prep process.
- Stage: Not every home will warrant a professional stager, but at a minimum you should be able to guide your seller about uncluttering, and you should at least be equipped to provide light staging on your own. Many top agents that we work with here at Discover have furniture in storage units and simple décor at the ready. If you’re in the luxury market, you should offer professional paid staging every time – your top competitors do.
Effective home preparation requires more than simply freshening up the decor and the paint. Photos act as a virtual calling card, and the key deciding factor, when other agents and buyers click through listings. This is an arena that a professional real estate agent is built to manage. There is no one (and no other source) better to help make that first impression count. Buyers want a house that is clean, uncluttered, and move-in ready – put together a plan that will show sellers that working with you is worth every penny.
The DIY FSBO, the “My cousin is an Agent,” or the online broker approach all have one thing in common: the marketing plan sucks.
Anyone can put up a yard sign, list a home online, and post it on Facebook. In fact, everyone who sells a home does. In order for a home to stand out and get attention, the marketing plan needs to be strategic for the local market and much, much more aggressive than what everyone else is doing.
Marketing can’t work when it’s half-baked, and half pursued. A valuable agent can provide aggressive, comprehensive, and strategic marketing to get a house in front of the right people at exactly the right time. Your value proposition must underscore how you will take the time to ensure the listing photos and the accompanying marketing materials are of the highest quality and caliber, and blasted out with the highest degree of fervor – in order to appeal to the widest pool of potential buyers.
Top agents offer pre-listing previews with local brokers, they create stunning online and print packages, and they list homes on hundreds of websites and channels. The thoughtful planning and strategic proficiency of a true professional is what it takes to devise a marketing approach that best suits a specific property. An effective value proposition would also seek to encompass a combination of: custom video tours, social media advertising campaigns, and print or digital advertising. Put your plan in writing, advertise it in your farming efforts, and discuss it with your potential sellers.
A local listing agent is in tune with the many nuances that service the efficacy of a good showing. They know how to not pressure or hurry the buyer. How to make it an overall pleasant experience, not an annoying or sales-oriented one. To have buyer’s packets printed and ready. An experienced professional becomes highly skilled in ways no one else can – and is very aware that buying a home is often an emotional experience, leaving buyers with trouble determining if a specific house will suit their family.
When a full-service listing agent shows a sellers’ home, they are infinitely more invested in the process than an agent who shows it for a fee on behalf of an online broker. They are more attentive to comments from buyers, and are better equipped to give advice and opinions on the home – to better assist a buyer. This is not something a seller thinks about when the prospect of a “1%” sale lures them away from a traditional agent.
In your real estate value proposition, be sure to point out that you personally show the homes you list, and why that leads to more offers, faster sales, and a better final price.
Discuss the pitfalls that can arise
Inspection problems. Low-ball appraisals. Contingent offers. These things that happen after an offer is received, things that sellers never thought about, that can throw them into an all-out panic. These are some of the important things agents can help to manage, mitigate, or prevent, and what’s troubling traditional agents is that now even online brokers are trying to show that they can solve these problems too.
But the truth is that with all the hair that can grow out of a deal, unless a there exists a person who is highly motivated to ensure a sale is smooth, fast, and efficient, these problems will crop up and stall or kill deals when sellers go with cheap online alternatives. But the real threat to full-service agents is that sellers don’t realize that ahead of time. Why would they? They don’t sell a ton of real estate like you do; they are just looking at the bottom line and trusting all will go well.
To combat this threat and to rise above the competition, your value proposition should outline every ugly thing that could go wrong, and how you will prevent or overcome each and every possible crisis.
Highlight your negotiation skills
In your arsenal against becoming obsolete, you should promote your superior negotiating skills (assuming you have them). Sellers dread negotiating, so much so that those who go the online route will entrust the negotiation of their home to “someone” the computer-bot assigns to them. How invested is this shadowy figure, really? Do they care if the final price is $20,000 more, or $50,000 less? What they care about is whether the seller will accept it, and so the real negotiating happens when they convince the homeowner to take whatever lowball offer comes in first. Now this may not be true of all online services, but the point is that when you take a full-service commission out of the equation, you take the fire out of the negotiation.
Skilled real estate agents are known for being able to negotiate well, if only from experience. They know what usually works, and what doesn’t. Most good agents have tried-and-true techniques all their own. Perhaps most important, however, is that they have no emotional stake in the property to cloud their thinking. An effective local agent is also aware when their client possesses certain bargaining chips. It’s simply more money saved when a real live real estate agent prevents a homeowner (or a buyer) from taking an unneeded financial plunge. To strike a chord with a prospect, put a detailed description of your negotiation strategy in your real estate value proposition.
Fire and Fury: Market your Value like your Life Depends on it
Once you lock down a value proposition that’s beefy enough to outshine all your competitors (including other full-service agents and alternative real estate services), it won’t help you unless you effectively communicate it to your farm.
This can be done using most of the channels you probably already use. Many top agents also use content-driven publications or newsletters, which have enough space to show homeowners what they’re made of. Postcards can be effective for branding, but these campaigns should be punctuated by enough content marketing to tell your story.
Your value proposition should also be clearly laid out on your website, and in your listing presentation materials. Focus on the areas that set you apart from the competition. Talk about the little things that homeowners may not consider. It’s advisable to read about how some online services promote themselves, so that you can provide counter-points to the “value” they purport to offer.
Do more – or Die!
With more and more lay people trying it out for themselves, there are countless disadvantages and pitfalls to selling FSBO or with an online service – subtle pitfalls that will most definitely be encountered. As time goes on, in the very near future, agents will separate themselves into two categories: those that offer a strong value proposition in order to stay competitive, and those that become more obsolete than they already are – to the point of becoming utterly extinct.
The former category (the ones that are doing it right) will pick up market-share from agents who become outmoded by cheaper online alternatives. So do more – a lot more – and shout about it; it’s the only way to thrive in real estate today.
Check your Territory
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