Sleepless in Sarasota

Ever have a sleepless night?  That’s me right now.  My brain just won’t turn off.  So I got to digging around in the blog and came across the pricing series I did last November.  I think it might be helpful today as more and more people are starting to venture back into the market.  Read them in order, 1-4, and let me know your best pricing secrets.  Oh, by the way:  if you’d like good quality versions of any of the graphics to use in your own pricing conversations, just let me know.

Pricing Clinic 3

Pricing Clinic 3

Pricing Clinic 3

Pricing Clinic 4

Why We Charge A Set Fee

The Low Set Fee is the heart of our identity.  It is the engine that produces the result we are known for:  consumer savings.  There are several reasons why we charge a Set Fee instead of a percentage based commission.

  • It is logical. If you know how your market behaves at any given time, if you know how long it will take to sell a properly priced property, if you know what you’ll be spending each month on marketing — you are able to know what it will cost to sell the typical home.  That, plus a ‘fudge factor,’ is your carrying cost.  Add a reasonable profit for your company and you have a Set Fee that makes sense to you and to the consumer.
  • Percentage Commissions, on the other hand, make no sense at all.  Think about it:  if your company charges, say, 6%, the guy with a $200,000 house is going to pay $12,000.  His friend, two blocks away with a bigger house, worth $300,000, is going to pay $18,000.  What did the friend get for the extra $6,000 he paid?  $6,000 more advertising?  I don’t think so.  Is his agent going to work $6,000 harder?  Doubtful.  Truth is:  they’re paying hugely different prices for the same thing.  It’s nuts and the consumer knows it.
  • It is a differentiator. Differentiation in the real estate business is a good thing.   The California Association of REALTORS has been asking consumers for years if they’d use the same agent again in a real estate transaction.  In 2004, 79% said ‘yes.’  In 2009, only 22% said ‘yes.’  If that’s not a confidence crisis, I don’t know what is!  Seems to me, the smart thing is to look as little like the rest of the pack as you can.  Charging a Set Fee instead of a Commission says you’re different.
  • It drives more business to your door. The Low Set Fee that produces savings over what ordinary brokers charge has great appeal to Sellers, resulting in large numbers of listings which create a strong flow of buyer leads through the office.  More Sellers = More Buyers = More Business.

Maurine Grisso, on the Broker Roundtable Call today, presented the Set Fee as well as I’ve ever heard it presented.  She talks in term of 3 ways your home might sell:  You Sell – We Sell – They Sell.  No matter how it sells, you always pay the Low Set Fee.  If you find your own buyer (You Sell), that’s all you pay.  If our Help-U-Sell office finds the buyer (We Sell), you pay your Set Fee plus our Selling Fee.  If you elect to go into the MLS and another Broker brings the buyer (They Sell), you’ll pay your Set Fee plus whatever % Commission you offer to the selling broker.  In all cases, the Seller saves over what they’d pay a traditional broker.

The Set Fee is who we are.  It’s what sets us apart from the crowd.  It’s what motivates consumers to call us and ask, ‘How’s that work?’  Set it wisely and re-evaluate it regularly, and wear it like a badge of honor.

Charging Less, Making More

The ability to go into the marketplace with a financially attractive offer for consumers AND walk away from the transaction with more dollars than your more traditional counterparts is at the heart of Help-U-Sell’s appeal to brokers.

Think like a traditional broker for a moment.

  • The success of the office is built on one thing:  your ability to attract and retain productive agents.
  • Your primary tool in accomplishing this is commission split — you know to be successful you need agents and to get them, you’ll need to pay well.
  • Unfortunately, the health of your bottom line is dependent on how many commission dollars you retain after splitting with your agents.

Put all of that in a hat and shake it up and you’ve got  . . . a mess!  Your formula for success is at war with itself! No wonder ordinary real estate offices suffer from embarrassingly low profitability if they make a profit at all (despite the fact that consumers think they’re paid way too much!).

Help-U-Sell takes dynamite to all of that nonsense.  First thing we do is demystify the listing process.  We toss out the notion that personality is what sellers buy when they list their property for sale.  Bunk! we say.  Listing is a logical thing.  If you present a system with a track record of success for a fee that is reasonable, most people jump at it.  Instead of two hour marathons where traditional agents warble on about how wonderful they are, listing presentations become simple, short and matter-of-fact:  here’s what we do, here’s what you do and this is what it costs.  Listing is so easy in Help-U-Sell that, well . . . even a Broker could do it.  That’s why we take the listing side of the business out of the agents’ hands.

We believe the listing side of the business belongs to the company, and the broker or an assistant (that’s different than an agent) takes all listings.  The agent’s role is on the buyer side, where we can afford to split commissions.  But, since we create all the leads for our buyer agents through our large number of listings and the power of our well-conceived marketing, we don’t have to give away the farm to get and keep salespeople.  We’re not asking them to call on FSBOS or Expireds, to knock doors or make cold calls to find listings.  We’re not asking them to master a slick listing presentation or memorize responses to two dozen common seller objections.  We just want them to take the prospects we’ve created and find them a property.   Good agents thrive at Help-U-Sell.

Back to the listing side;  here’s how the dollars break down:

Here’s where the ‘yeah-buts’ start to echo from the mouths of ordinary agents.  Yeah-but, with no listing agent the seller’s getting less than full service! Says who?  Full service is getting the property sold for the greatest walk-away dollars in the right time frame — and we do that every day.  Yeah-but, you get what you pay for!  When you list with me I’m going to actively market your property until it’s sold! Um, let’s see . . . ‘actively market‘ . . . I guess that means put a sign in yard and a listing in the MLS, which then syndicates to a couple dozen Internet sites, right?  In my experience that’s what ordinary agents do when they get a listing.  In my Help-U-Sell office, we have a comprehensive marketing plan, orchestrated, monitored and constantly improved by . . . ME.  It’s not just a bunch of agents running around willy-nilly, making it up as they go along on every listing they take.  I could go on with the ‘yeah-buts,‘ but we try to keep these posts to a ten minute read or less.

We are a very proud group, and rightfully so.  We’ve taken the fluff and snake oil out of selling real estate and converted the process to logical systems that get results.  We’ve done it in a way that saves consumers thousands of dollars and makes our brokers a nice profit.  Who could ask for anything more?

How To Grow

Many have remarked that a well run Help-U-Sell office looks a lot like a mega-agent team where,  in traditional offices, top producing agents hire assistants and agent specialists to enable them to do more business.  The growth pattern is similar:  both the traditional agent and Help-U-Sell broker start out doing everything.  As they approach the maxed-out state, they add an assistant and make a corresponding leap in productivity.  As max is approached again, a buyer agent is added and productivity leaps once more . . . and so on.  The difference is that the Help-U-Sell broker goes into the marketplace with a stronger consumer offering and a differentiating identity.

Craig Proctor, a Re/Max agent from Ontario, Canada, is a model of the successful mega-agent team and has spent years speaking on the topic of team development and growth.  RISMedia features him in a nine minute video talking about how to develop your team and grow to the next level.  The parallels are so clear to what we’re doing that it is well worth your time to take a look.  Follow this link and click on the Best Practices video, ‘When to Create an Agent Team.”

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