Why Most Real Estate Agents Fail… and 10 Ways to Help Make Sure You Don’t
I’ve worked with thousands of real estate agents at all levels over the past 30 years.
Two of the most common problems I see with coaching clients, and for that matter the biggest reasons for failure in this industry, are…
- The notion that somehow working harder will make up for working smarter.
- Fear of asking for what one is worth and deserves.
Here’s a few of my favorite strategies to overcome both of these obstacles, set you apart from the average agent, and lead you to greater profitability…
1. Raise it.
Before the listing appointment, fill out all paperwork with your new rate (7% maybe?) and make it business as usual. Scared? Well, make a great listing presentation, don’t leave until you get the objection, and learn how to overcome the objection. If you have to, drop it back down to your old retail rate but only after much hesitation.
2. Email new listings.
Send new listings to your database immediately, hours before it hits the MLS. This is a two-fer:
#1 – It keeps your database informed with “secret” pre-listing information, but with your “permission” they can forward this hot info on to their sphere.
#2 – You make more double ends with new people.
3. Institute a cancellation fee.
Many agents allow sellers to cancel listings with a guarantee stating they can cancel if they are not happy with the process. If you offer this guarantee, you will always be worried about offending sellers who are serial cement heads bent toward overpricing. In addition you may not try hard enough to get the price reduction out of concern they may cancel the listing.
On the other hand, sellers often have a legitimate reason for needing to cancel, and, as upsetting as that is, you can’t sell a property that the seller does not want sold. Offer them an out and you get paid for your time, while working with a chance to get the listing back. “I offer an ‘any reason to cancel’ clause. It’s just $1000 anytime the first month and only goes up an additional $500 a month after that. (Adjust for your price range.) It is fully refundable should you ever re-list the property with me and I am successful in contributing to its close.”
4. Gain limited partnership as commission.
I carried many of my commissions due from builders as a limited partnership interest in their next project, rather than giving them discounts.
5. Skip the discounts.
Instead of discounts, carry your commission as part of any seller carry back. It is better than taking a beating on the amount up front.
6. Include a transaction coordination fee.
I started using a transaction coordination fee about 25-years ago. Many offices have them as standard fees now. They range from $250 to $1250, depending on your nerve and price range.
It is easy to answer their objection: “I understand that with a 7% commission you find that another $475 seems excessive. Allow me to highlight the items that most agents cannot do or don’t do. I spend more overhead than agents in this area; it’s not the market but the marketing that achieves your goals. I have evaluated my excess overhead and my expected transactions this year; the number runs about $475 per listing to provide these extra services.”
If you cannot sell the transaction fee, back off a bit: “I understand. Do all the other terms meet with your agreement? I have already mentioned that I think I can do wonderful things with the marketing of this property and achieve your goal of (core motivation). If you move ahead with my plan, I will personally absorb the additional overhead reimbursement.”
7. Offer credit.
If you have to negotiate commissions, offer credit toward the property they buy from you after the closing of their listing.
8. Offer credit. Yes, again.
Same as above, but only offer the deduction if you get both ends of the transaction. It does result in lower commissions, but only if you get both ends. Most agents (except my coaching clients) rarely get both ends.
9. Take reasonably alternative commissions.
I have taken commission in the form of bullion from a coin dealer client, gift cards from restaurant owners, and even antiques. All, of course, at more than the commission if it were in “real” money. The secret is to net more by taking things you like or can use rather than taking a discount for cash.
10. Get a new house.
I have taken all my commission in the form of a house at the end of a long string of sales with one builder. Builders need cash flow. By taking my commission at the end in the form or a house or credit toward a house, it helped to mitigate the commission-ectomy so often ably performed by my builder-seller.
★ Walter Sanford still coaches some of the top agents in the world. He can be reached at 815.954.9545 or firstname.lastname@example.org. He has discounted his library of systems for us, go to Walter Sanford’s Library.