It is scary that vendors believe most estate agents provide less value today than they did five, 10, even 20 years ago. But what’s scarier is that many agencies seem to think this is fine by the customer, and are happy to charge less to provide less. As more and more agencies join the race to the bottom, we’re waiting in anticipation – who will be the first one to provide their service for free (and not just to “celebrate” opening a new office)? As ridiculous as it sounds, that’s where many are heading.
The downward fee environment spreads every time a vendor doesn’t see value in the agency fee and just assumes what we do. Today’s agencies are confused as to how to add value worthy of their fees. They have become merely ‘facilitators of process’. In doing things the way they have always been done, we’ve become irrelevant. You get called in, give a price, sign up a vendor. Post a property ad. If you’re one of the few to get the price right from day one, the enquiry comes in. You don’t know your buyers. You’re not bringing any value to the process. You’re merely a tour guide. And like the travel industry, consumers now want to navigate their journey without us. You open doors to everyone and anyone and hope for an offer. When it comes, you present it as the best and only one they’ll get and press your vendor (who chose you because you promised the world!) to accept it because ‘you can’t guarantee them more’. Is this really what our industry has become? Is this really how we respect someone, often a family, who’s put their biggest asset in our hands?
Building relationships with both our sellers and our buyers is the key to adding value. Keep a buyer involved in their segment of the market and they will put their money on the table when their hearts and minds align. It happens fast and the results are measurable. We’ve forgotten these simple truths. Remember, it’s two or three buyers that make all the difference to an eventual sale price, not 100,000 page impressions, not click-throughs. It’s Business 101 to understand your customer’s needs and meet them. Do our vendors want a million viewers or two to three motivated buyers for their property?
Where some agencies have lost their way, focused on getting as many eyeballs on their instructions as possible, others are working intimately within their concise network of buyers and core contacts within the industry (yes, some of us do share and put our clients before our wallets!). Outdated agencies solely rely on web portals to drive traffic to their inbox before beginning the same shoot in the dark approach each time. Some spend enough time on the phone to survive. That’s fine for them, it’s not good enough for the client.
Yet most agencies, and the industry as whole, seem to think they need to adjust their model to become sustainable in a lower commission environment. Instead, narrow your focus and sharpen your offering. Working all over London, we know a few agencies who are more than there already. They have a little black book built on working with buyers and other progressive agencies, have a commitment to their delivering the BEST result to their client, and funnily enough, often charge a higher fee than their competition.
The redundant agency qualifies buyers for the property they are inspecting. A modern agency qualifies them for all of their vendors, present and future. The agencies of the future will qualify buyers for their entire sales team. Think of it as continuous buyer momentum rather than buyer reach.
Think of it as continuous buyer momentum rather than buyer reach. Now, there’s one tangible way to prove commission fees. Meanwhile, agents who start from scratch with each new campaign are always five weeks behind. If they’re inefficient now, imagine when they’re competing against this new model.
Now, imagine being a seller working with an agency committed to customer-centric delivery. There is plenty of development and experimentation to be done with buyer practices and collaboration from agencies working in the same area/network. Both new and existing agencies AND THEIR CLIENTS will all benefit immediately from a collective approach, while industry leaders will have a real incentive to share their experience, because it delivers ongoing value for their brand, staff and customers.
The agency of the future will encourage its agents to sharpen these focuses. Instead of broad shoot in the dark tactics, the new approach will be narrower, more precise and more collaborative. Once we all learn to get along, put the people providing us the opportunities to work first, create more value them – there’ll never be a question on fees for service. But first, we’ll have to prove our worth.