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2010-06-04 16:15:46

What is YOUR Value Proposition?

If all REALTORS provide the same service, then how does a consumer choose one REALTOR over another. How does one differentiate themself from the competition. If any product or service offered is just like the  competition's product or service, then the differentiator becomes price.

I would ask myself...If I was a consumer, and wanted to sell my home, why would I choose me over my competitors?"

Saul, I don't agree, it may be part of it but this is still a personal service business and as such, rapport between parties is still key, "It just feels right". If you go buy a car one day and don't like the salesman but like the car you go the next and get a different salesman same price, same package of value, different person.

Personally I think you need to 'know the territory' as the old song goes.  Experience, perseverance in your market place. Knowledge of the market place and personality, ability to deal with all types of people, know how to make people laugh while providing the best information and service possible all are important.

As a broker I always told new agents that everyone is capable of becoming a great sales person - I learned - most people fail through lack of perseverance and a belief that they know best when in fact they need to
learn 'the territory', many are just incapable of relating to all the different types one has to deal with.

So, hard though it may be to say so, new salespeople need to ask themselves some hard questions - like how much do I want to work for free from January until September(!) before I get some rewards later in the year.

Had to think back to the last time I listed my house in 1994 I interviewed a number of agents. I wasn't a realtor then. In the end run I thought a couple were sleazy realtors and by the way they still are. Now they all did CMA's and very professional, The 2 sleazy realtors though had priced the home much lower than the 2 good guys. Luckily I had been a contractor and an appraiser in past lives. By the way they still price low and have been known to buy their listings when they received an offer.
 
The 2 sleazy ones anyway were hard sale types and having been a salesman all my life, it turned me off. So that left me with the 2 good guys. Almost same comps, showed me their brochures, same commission, etc. The guy I went with played golf, had been a marine in Vietnam the same time I was, past local and current state president, figured other people like him. He had a good in with a front page in the Real Estate Magazine. He had his own 6 person brokerage and I have always liked small businesses. So I guess my final decision was very subjective but I liked him.
 
Now having 3-4 homes in the past I know I didn't want to do a FSBO even though my wife had been a Realtor in Carmel, it was just too much work and pain in the ass. We tried it for 2 weeks and all we got was other realtors wanting to preview and make a pitch to list it.
 
So now 15 years later I am a Realtor, the business legally and technically has changed and I intend to die in my house. Just the thought of moving 4000 sq ft gives me palpitations let alone having to deal with an incompetent home inspector who thinks a house built in 1936 should be brought up to current code.

Assuming I had to sell though, I think a real list price is important, a person you trust is important, the cost to sell should be justified by the lister, good brochures. I would want to be part of creating the MLS listing (you have to sell a BA before they will show your home). Personally I don't think websites are that important in selling a house versus finding buyers. Print advertising is a thing of the past, I still think open houses are important even if I did some myself and the LA did some. I would not choose some listing machine, I don't think they have time to work your property. I also think I would insist on giving a little kick to the BA maybe a 2.5/3.5 split. Face it the LA doesn't sell the home, the BA does. I would insist on brochures at every MLS meeting and a constant contact campaign promoting a BA kick. So if I were listing a property those are the items I would sell to a potential seller.

If the services offered by competing REALTORS are relatively the same, and everyone seems to be on the same page in regards to pricing, then in my opinion, it simply comes down to the interpersonal dynamics between the REALTOR and their client. I like  interactive exchange between the REALTOR and the seller, coupled with the belief of the importance of rapport between the parties.

There's no doubt in my mind that the quality of the relationship between parties is paramount, which leads to answering the question of one's value. If the seller or buyer perceives that your understanding of their specific needs, wants, and desires are acutely dead-on, almost to the point of being intuitive, then any discussion regarding varying levels of compensation becomes irrelevant. I personally find this to be the case with my business, whereby I charge the same set commission on all properties, regardless of price.

I recently closed a transaction for a seller, in which she had to pay to correct an HOA violation of the house color. My client purchased the house as a FSBO, and no one bothered to tell her about the HOA. This is a small community with a very modest ($36/YEAR) fee, but they do have color restrictions in the CCRs and attempt to enforce them. She since painted her home without approval, in an inappropriate color. My client didn't have representation when she bought, didn't know what questions to ask, and it just cost her $1500 to correct the problem for her buyer. Notice that she hired me to help with the sale. Just one example of the value of our services...

Don't know about Idaho but here in Atlanta it is so tough to sell a home even with full time professional that if a seller thinks he can save a commission by marketing on his own I would sure go to work on him immediately. Professionals do this for a living and have lots more real buyers to show properties to. We hold caravans and give away gifts to agents to preview the house in hopes of generating activity. We market to other agents and past clients and spend 2 hours a day prospecting for a buyer. How many hours will he prospect daily? NAR says that we as agents get more money for our sellers when they list with us. Looking at his website I don't see a price which is very important on a brochure. He calls it a luxury property and if that is the case he really needs to be w/luxury home marketing institute or such. We can recommend any number of professional agents in his area of the country. Good luck!

Saul seems to be questioning the integrity of the Real Estate Agent in comparison to the FSBO. The difference being...... Internet Exposure vs. Professional Representation. This is the age old argument that we presume to have been resolved through the dissemination of information (IDX). If being a Nuclear Engineer is all it takes to sell real estate, then selling Real Estate is really "Rocket Science" and that's all there is to it. If I were a Nuclear Engineer (Rocket Scientist) I would be to proud to hire the likes of some hard working Licensee to market my property. Besides isn't Exposure what it's all about, Saul? What better exposure can an Owner expect when you compare MLS to the Internet? 

Saul, There are a bundle of reasons for sellers to employ real estate professionals, but if this seller feels he can do it all, let him. Most buyers want an agent on the buyer’s side to protect them. I'm in California that leads the world in disclosures and lawsuits. Agents should not feel they "sell" homes. Agents "protect" their clients. The buyer is the key. Forget the person whom you cannot convince that having a professional Realtor represent him is NOT in his best interest!

My recent college grad son expressed the same position. Although he has used an agent to look at properties, he is very skeptical of the value proposition especially when he questioned the % based fee of selling a condo priced at $120,000, compared to one for $520,000. How much more work was involved in selling the lower priced over the higher?? He did however value the professional expertise afforded when moving to a new city, but was unsure of how much that was worth? These are questions that many buyers and sellers are asking in more challenging economic times and will continue to be asked by the younger generations---they ask questions and must be convinced they are getting the best bang for their buck!

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