A recent survey showed some disturbing statistics: more than 60% of home sellers who hire a full service agent no longer pay a full commission. And, on average, they are negotiating discounts of over 40%.
Additionally, 15% of all transactions are now handled by a discount broker and as much as 10% of transactions are done For Sale By Owner.
The bottom line is that even in a good real estate market, it’s getting harder to make money. Real estate agents are having to do more transactions to make the same amount of income.
That trend doesn’t have to affect you, however. Most sellers who hire a full-service agent indicate the benefits and service were worth the cost of the commission. Overall, they sold for more money, in less time and had fewer hassles. The main problem is convincing potential customers of the value of an experienced, educated and talented professional to accomplish their goals.
The easiest way to ensure that the customers you are working with trust your expertise, want the full range of your services, and aren’t the type to ask for a discount is to work by referral.
Potential customers that are referred to you are more likely to be serious about buying or selling, already have a level of trust and confidence in you provided by the person who referred them, interview fewer potential agents, and statistics show they are more amenable to paying full or premium pricing for your services.
Overall, the value of a referred customer is 35% higher than that of a non-referred customer. Which means if you work by referral, you can do fewer transactions for the same amount of money.
On a side note, one interesting statistic I took away from the survey is that of the 25% of people who hire a discount broker or go FSBO, only half of them did it to save money. The other half did it because they couldn’t find a full-service agent they liked, or said they simply didn’t trust real estate agents.
That offers a serious opportunity! 1 out of every 8 of the total real estate transactions that occur every day are up for grabs! You’ve heard it from all the real estate gurus, but Bob Burg said it first. “All things being equal, people will do business with those people they know, like and trust.” 12% of all buyers don’t know, like or trust an agent enough to hire them. An aggressive relationship marketing campaign can ensure next time, YOU are that person!