Unless you’ve been living under a rock, you can’t help but notice that there are a lot of new real estate tricks that are being employed to grab the attention of today’s home buyers. We’re seeing a lot of discounting, rebates, prepackaged agreements, etc. all being used by Realtors and brokerages hoping to stand out from the crowd. Haley Sutter, Amarillo Realtor™ – Amarillo Homes for Sale is one of the authority sites on this topic.
I’m a huge fan of innovation and even huger fan of being able to offer home buyers new types of incentives and agreements that work to meet their needs as well as the needs of the agent. However, I am concerned that some of the offers being made by brokerages and realtors today and that discounting the innate value that Realtors bring to the table.
Let’s be perfectly blunt here: not every Realtor is a superstar who can end up in the top 5% of sales year after year. Even in a booming market there are some players who either lack the aptitude or the focus necessary to grow their real estate client list into something remarkable. On the other side, there are the people who work their butts off to get new listings, to provide a top-level of customer support and define new ways to solve the problems that their clients may run into. These are the people who I want to talk to.
One of the main challenges with traditional real estate models is that it forces Realtors into the role of being a salesperson first and foremost. While most of us try to stay away from horrific scenarios like that portrayed in the classic play “Glengarry Glen Ross”, there’s a certain reality for Realtors to “always be closing”. What I am here to suggest today is that this doesn’t always need to be the case.
Don’t get me wrong, I’m not naïvely suggesting that you don’t need to make a living. What I am saying is that it doesn’t need to be based upon a straight sales relationship with your clients.
Let’s say that you are an agent works primarily with home buyers. In the traditional model the home buyers would sign an agreement that would allow you to represent them in a real estate transaction. In most cases this traditional agreement would be based upon you being paid a percentage of the selling price of the home in exchange for your services. However several of the challenges with this model include:
Even if you give exemplary service and support to your clients if for some reason the homebuyers never make it all the closing table then you don’t get paid a dime for your time
Being paid for your services by the other side of the table looks like a conflict of interest because potentially is. The home buyers understand that they’re being supported by you but on the other hand they also understand that you don’t really work for them when the other side of the table is paying your salary.
Let’s mix things up a little. Instead of taking on the role of Agent for the Buyer based upon a commission agreement you instead decide to offer your professional services straight to homebuyers as a consultant. What would that mean in this scenario?
For starters, if you were being paid directly for your services then the need to always be driving drive the home buyers to the closing table goes away immediately. Sure it’s probably in their best interest to do so but imagine how liberating it would be to stop needing to ‘herd cats’ all day long and instead focus on providing your ability and insight to make sure that people your clients are getting the best possible deal for their time and money.
Because the home buyers are now taking on more of the financial responsibility surrounding the closing, that takes it off your shoulders. You no longer have to be the one who worries about whether or not the deal will close since you’re going to get paid for your time and services either way – just not via a commission check.
This approach eliminates any potential conflicts of interest. As a consultant you really do work on behalf of the buyers. You no longer being paid by the other side of the table but are being paid directly by people who want your insight and best judgment to help them make important decisions. This includes the ability to warn your homebuyers off of properties that may spell disaster for them in the future without ever having to worry about whether or not it can affect your own payday.