Loved catching up with Carl Quested from Agent Mail to chat about the real estate industry and the need for Agents to embrace the online world or face becoming redundant…
Let me know if you agree or disagree!
Loved catching up with Carl Quested from Agent Mail to chat about the real estate industry and the need for Agents to embrace the online world or face becoming redundant…
Let me know if you agree or disagree!
Indulge me in this scenario if you will:
You, your vegan sister and your bottomless-pit-of-a-stomach brother walk into a McDonald’s.
Your sister orders the garden salad, no dressing, with a bottle of water.
You order a Big Mac with cheese and a medium Coke, no fries.
Your now-ravenous brother orders the complete right-hand side of the menu and a Triple Quarter Pounder, extra-large fries, a bucket of Coke, a chocolate sundae and an express sausage Egg McMuffin just to take the edge of his appetite while he’s waiting for the rest.
You’re all going dutch, so you ask your cashier to total it up per person.
Your friendly McDonald’s cashier taps a few buttons, and instead of saying, “Would you like more fries with that?” says, “That’ll be $9.99 per person.”
How do you all feel?
I’d guess your sister is feeling pretty ripped. 9.99 for a green salad?
You might be thinking, “Mine’s a little high, but it’s an OK price and I’m hungry.”
And your starving brother has a foot-wide smile that says all his Christmas Days have come at once.
Your sister asks, “How can that be? How can they all be the same?”
The McDonald’s cashier answers, same smile pasted on her face, “That’s always been the McDonald’s way, and the McDonald’s price. One size fits all…” and continues on with her mantra, “Would you like fries with that?”
Of course we know that would never happen at Maccas, so what’s my point?
For an industry where people are paid to be creative, I don’t think I’ve ever experienced anything more boring, unimaginative and vanilla, generally speaking, as the bulk of the real estate industry’s efforts on creativity around their pricing model.
Now, I know that simple statement will bristle some. But let me state my case before you launch a SCUD missile in my direction!
For more years than Colonel Sanders has been frying chicken, most real estate agents in Queensland, Australia were quoting a ‘one size fits all’ model for their commission – 5% of the first $18,000 and 2.5% of the balance. (In fairness, up until Dec 2014, that was the maximum fee that could be charged in a residential real estate transaction.
The limitations of that statutory maximum fee chargeable changed on December 1, 2014. After years of discussion, lobbying and industry consultation, the QLD Government finally deregulated residential real estate agents fees, allowing them the opportunity to essentially charge whatever they could negotiate with a Seller. No more set maximum!
More of what happened as a result of that market deregulation another day, but suffice to say, the reinvention of fee models and creativity that’s occurred by other than a handful of high-performing Agents since deregulation has been about as exciting as watching paint dry with an interlude of watching grass grow.
Now, I know I’m trampling all over potentially sacred ground by even raising the topic of real estate agent commissions. It’s a topic that brings out the best and worst in people in our business. But alas, I’m putting it on the table again to raise some additional awareness and to maybe shape some more creative thinking in our industry.
It’s not just a touchy subject here in Oz, but also in the USA. Even raising the topic of why USA Agents charge 6% and the slightly remote possibility that someone new might introduce a fee model offering something different to the widely-charged 6% will see mature-age Women Realtors throwing their handbags at you in disgust and cause mature-age Men with walking sticks threatening to break into fisticuffs with the offer to, ‘Take this outside and whip your ass, Sonny Jim!’
Thank goodness they have sensible gun laws to protect each other in the USA… <<sarcasm>>
In the USA, Agents will try and tell you there is absolutely no collusion on commissions, and they’ll even go to the lengths of protesting that the very whisper of 2 Agents discussing a commission or fee breaches their ‘Anti-Trust’ law. Really? It seems funny to me that over 90% of Agents in the USA all charge the same 6%. What an amazing coincidence that 1.1 Million of them charge exactly the same fee! *cough cough*
Look, I get it. Money is a topic that many people get passionate about. But we’re damn boring when it comes to fee models. Why does the bulk of our business only offer a one-siz-fits-all fee of 1%, 2%, 3% or the USA 6%?
So, here’s my thing. Where’s the same passion that brings people to the point of threatening to draw pistols at dawn about protecting their fee being transposed to actually being creative and inventive when it comes to their fees for service?
Does one size really fit all? Should one size really fit all?
I recently asked one Agent why he charged his 2% fee, and his answer was mind-numbingly inventive, “It makes it easy to calculate on the back of my card” was the reply.
Now, let me be absolutely crystal clear on this. In NO way am I advocating for lower fees! Not one bit! This business is a hard gig sometimes. Bloody hard! In fact, I actually think we deserve more for our service in some cases. So don’t quickly package me up as the guy who is trying to drive fees down. Nada.
What I am advocating for is some creativity and originality to come from an industry that’s retained by its Clients to be great marketers, skilled and creative negotiators, and out-of-the-box, deal-making thinkers!
Sadly, though, that’s not the reality I see or experience in real life as a client of many real estate agents in many places.
So, I’m passing the porcupine back to you, Thought Leaders. What does our industry need to do to reshape its fee model? Because I believe it’s outdated, inequitable, archaic and under an increasing scrutiny by today’s wiser Consumer.
Is there an opportunity to build a fee model based around a Client retained hourly rate?
$800 an hour while you’re negotiating?
$120.00 an hour while you’re running Open Homes? $55.00 an hour for Admin work? Maybe like a Barrister, Lawyer, Valuer or Accountant does?
I know plenty of Agents who would love to implement this model based on the amount of ‘free advice’ they give each day now. Could that work?
What about a ‘fee for success’ model?
In my dark old days as a relatively successful Agent, I quite often charged top-end properties a fee based on a minimum of 2% to a max of what was effectively 2.75% if the Client was absolutely delighted in my service and result. That fee gave me security around my base, gave the client surety around cost, and gave both of us a mutually beneficial incentive and reward for me over-delivering service.
Does anyone run these incentivized commission programs with any success these days? Could you? What would stop you?
Would a ‘menu of services’ that Sellers could tick and flick based on their needs be attractive to some Sellers? (Not unlike the Maccas “Build Your Own Burger” experience being rolled out very successfully in Australia…)
Does every seller want a face-to-face meeting and written progress report twice per week? Does every Seller want your fancy-pants marketing program? Would some Sellers be deliriously happy to only hear your voice when you have a written offer as long as you SMS’d them a quick 3-line note, or 30-second video after every Open Home?
You might be thinking that I’m putting it out there to ruffle your feathers but…Maybe I am?… But is it an option?
Let me share a story of a ‘friend’ who wants to remain nameless.
In their recent research to decide on an Agent to sell their 1.5 Million dollar home, they asked 3 Agents to nominate their selling fee. To begin with, only 2 actually responded…
They were quoted 2.5% (about 30k) plus $6,500 marketing. My friend dutifully and fairly asked what they would get for 30K. Both Agents’ response was, ‘ For 30K, you’ll get my absolute best attention and focus on achieving you the best result I can using my best knowledge and skills to sell your 1.5 million dollar home.’
So, for almost $40,000 (30k +gst +$6,500 marketing) my ‘friend’ was going to get the promised, expected service rhetoric from either Agent who, by the way, had ‘no suitable buyers’ on their books and no historical database of any suitable prospects.
Inquisitively, my friend then asked the same Agents what, hypothetically, the selling fee might be if their property was a $300,000 home instead of a classy $1.5m property.
The Agents again quoted “2.5%” (about 7.5k) plus $3,500 marketing. Again, my friend dutifully and fairly asked what they would get for 7.5k. The Agents’ response, ‘For 30K, you’ll get my absolute best attention and focus on achieving you the best result I can using my best knowledge and skills to sell your $300,000 dollar home.’
So, this time for around $11,750 dollars (7.5k +gst +$3,500 marketing), my ‘friend’ was again going to get an Agent who had ‘no buyers’ on their books and no database of prospects.
In other words, exactly the same service for a whopping $28,000 less!
My ‘friend’ cheekily proposed to both Agents that given the service promise was exactly the same, but $28,000 cheaper in the second scenario, the Agents just pretend that theirs was a $300K home…
What would you do based on the same scenario as a Seller?
What would your response have been as the Agent?
Today’s consumer is getting wiser and much more inquisitive around the fees our industry charges. They’re starting to ask you to justify your fees more than ever. And, it’s not going to go away.
Today’s consumer is also becoming much more cynical about your service delivery, with a report suggesting that 41% of email enquiry to the industry is going un-responded to.
I experience cynicism-laced feedback from Consumers almost weekly about our industry from meetings and surveys our business conducts.
Here’s a challenge…
Go and ask the average man in the street how they feel about our industry’s fees, and stay tuned for a potentially sobering response. That dangerous old mantra of, ‘That’s the way we’ve always done it around here’ that too many businesses rely on won’t cut it in the future.
What’s working for you?
What’s working for your Clients?
What would you like to try in a fee model?
What prevents you from going above the industry average?
I’d like fries with mine…
I’ve often joked with close friends….
“If by some horrible chance I pass away in my sleep tonight, can one of you please delete my Google search history?”..
Now, without passing any judgement I think we’re all potentially guilty at some stage of innocently entering a Google search, that, if discovered, without the benefit of context, could see some of us very embarrassed, or even in some cases, on the FBI or ASIO Watch-List.
I for one don’t think I could never really plausibly explain to a Judge why my search history contained dubious results from entering the search terms: ‘Cheap Old Boxes’, ‘Spicy Spit Roasts Images’ or ‘Saddle Chaffing Relief’…
But I digress...
The common practice of using various privacy settings, filters and Incognito browsers to keep our Search or online browsing habits private is something that many rely on for professional, and sometimes personal reasons, that frankly are none of my business…
But in the modern day dictionary that now includes meta, beta, cache, pixels, physing attacks, cyber criminals and data-doctors, many people are incorrectly relying on an assumption that our online habits are safely hidden from all eyes, other than our own.
Couple that misconception with the myriad of devices that we use in our professional day and then privately at home after hours, along with most browsers now ‘handing off’ from Mobile to Desktop and vice-versa, our online world is much more complex, far less private, and with some lines that to many, are much more blurred than ever before. And its those changes in technology that are biting many people on the buttocks much harder than you might ever have expected several years ago..
Let me explain..
I’ve been following a recent court case from the USA with great interest. I won’t go into deep detail on the case other than sharing some of the events which sees one Senior Business Exec who has moved from his former employer to join the employment of a fiercely rival company.
With the authority of the Courts the former Employer is now deeply, almost forensically, exploring their former Employees online behaviour, using his company provided devices, including sites visited through to exact dates and times that USB devices have been accessed, files deleted, copied and moved, even through to details of deleted text messages.
The depth of technical knowledge available to the now apparently aggrieved Employer through these forensic examinations now sees that Exec in what would be for many of us, a position where embarrassing and compromising facts are being unveiled in the witness box for the world to see, salivate on, and to share. I’m not even going to contemplate the online reputation damage that’s being done to the Execs name in SEO terms for his future reputation..
Savitt: Before running the Cipher and cleanup.bat programs did you think you should talk to your attorneys?
Savitt: Did you?
Savitt: Why not?
Beardlsey: “Because i did not want to discuss the pornography issues with anybody, including my attorneys.”
Savitt: When you ran the programs did you believe you were tampering with evidence?
Beardsley: “No, I did not believe there was anything in those computers at all related to the case.”
Beardlsey: “I had accessed via browser pornographic websites and viewed pornographic material and wanted to not have that come out. I wanted to hide that.”
Savitt: Why were you concerned?
Beardsley: “I am ashamed of it and did not want anybody to see it.”
Savitt: “Were you ashamed that you had used it on your Move computer?” Beardsley: “Yes.”
Savitt: What did you think people would look at you and see if they found out?
Beardsley: [starts tearing up] “Someone who was not the person I wanted to be.”
Savitt: Was it a lot of pornography or a little?
Beardsley: “Probably a lot.”
Beardsley: “Over time, it’s generally when I’m under stress, so it ebbs and flows.”
Savitt: “Did you visit sites like playboy.com or sites with graphic sex?”
Beardsley: “Sites with graphic sex.”
Savitt: “How are you feeling right now, Mr. Beardsley?”
Singer: “Objection: relevance.”
Judge O’Donnell: “Over-ruled.”
Savitt: “Is this precisely what you were trying to avoid?”
Now. In anyone’s terms I reckon the above Courtroom exchange would rate fairly low on the things you’d like your Partner, Kids and future employers to be reading. No matter how innocent the searches and browsing may have been.
My point?.. Its simply this. Every keystroke that you make is potentially being recorded by someone somewhere these days. With social networks and mobile search and browsing dominating most days, the clarity around the lines of what is business, and what is private have become very blurred for many.
Our friends at Google recently shared at the Inman conference in NYC that a majority of us are now checking our Mobile devices up to a whopping 160 times per day. In fact they shared that up to 90% of life decisions are now being made via our Mobile devices.
In light of these stats and this rapidly moving world, here’s a few thoughts to ponder while you’re sitting under your desk rocking back and forth today.
If you’re an employer.
-Does your written signed company policy clearly define your expectations and have absolute clarity around ownership and acceptable use of devices?
-Do you have a written signed policy to deal with such things?
If you’re an employee.
-Do you know exactly what you can and can’t do with company owned devices and on company time?
Give it some thought.
If you think you might need some help to get some clarity you might want to seek some professional help.
I’m here to help you navigate the maze. Give me a call on +61417630962 or drop me a line to email@example.com
I’ve lost a few of my heroes lately. The loss of Glenn Frey from the Eagles in just the last few weeks, and this morning the announcement of the passing of Aussie Rock, TV and theatre legend, Jon English, has hit me really hard.
Both Glenn and Jon have been wonderful inspirations to me in life and I’m sure they’ll continue to give me inspiration in my own remaining days.
Glenn and Jon knew how to make people smile. They knew they could inspire happiness through their music and their message. Without doubt they’ve helped me to pursue a happy and optimistic view through my life.
The result of that is that those who know me understand i’m a big believer in having fun and sharing a smile when I can. Even when the days are dark. And for me sharing a smile or a laugh or some self deprecating humour isn’t just confined to the after hours and weekends.
I reckon that unless you’re a heart or brain surgeon or maybe an Undertaker there’s gotta be an opportunity to share a smile during every day.
I figure that if you’ve gotta be at work today, then you may as well make it fun!
I ran into this awesome guy at the Sunday morning Eagle Farm Markets in Brisbane recently. I reckon if he can have this much fun selling an avocado and some veges then there are absolutely no limits for you in your business day.
Whether you’re a rock star like Glenn and Jon or a guy selling fruit at a market, get out there and make someone smile today. You mightn’t wake up tomorrow. #ripjonenglish #ripglennfrey #ltfu
I had the absolute pleasure of seeing Jon in concert with Peter Cupples on a #Besties date with my old Mate Kathlyn Owen recently. This video i captured will always make me smile. Fast forward to 1.24 for a smile.
Rest in peace Jon.
I’m part-way through the long and arduous, but totally worthwhile, process of updating my Client contact records. It’s an important thing for every business to do regularly. But, after reviewing about 20-30 Real Estate Agent business cards today, I’ve had to pause the process for a good chuckle and a sanity check.
Now I accept that most of us need to have a ‘Title’ accurately describing the role we play in our own business or in that of our employers. For our Clients, a good Title usually makes it easy for them to understand who we are, what we actually do, and lets them know they’re communicating with the right person.
But it seems to me we sometimes seriously lose the plot these days with some of our self-adorned Titles.
Now, from the outset, I’ll confess that from time to time, I’ve strayed down the path of boasting a mildly exaggerated business Title myself. In fact, as a young child, I was in awe of Thurston Howell, III. (Though some people say it’s scary to imagine ONE Peter Brewer, let alone 3 generations of them!)
In fact, my awe of those magical Roman numerals in Thurston Howell III’s moniker, and the potential power associated with that illuminatingly impressive Title, recently seduced me to chance my luck when booking a room at the New York City Marriott. With mild trepidation and a healthy dose of tongue-in-cheek mirth, I took the opportunity to glamorise my Marriott online registration to read…wait for it… Dr. Peter Brewer, III. (It seemed a fitting title, given that I’d recently successfully diagnosed my own in-grown toenail with the help of WebMD.com.)
Sadly, the New York Marriott were less-than-impressed with my diagnostic skills and my self-appointed Title, and apparently even less so with my third-generation heritage.
So much for that futile exercise.
The end result of my mildly-exaggerated Title saw me bunkered in a standard room with no minibar, overlooking the carpark. But damn, the feeling of self-importance as I completed the rego form and breasted the Hotel Checkin counter was off the Richter. (Fortunately, at no stage during my stay at the Marriott, was there a call of, ‘Is there a Doctor in the house?’!)
But I digress…
What is it about Titles that seduces so many?
Is it the desire for power that comes from being a Colonel, a Major or a General?
Is it the lust for recognition that some crave by adding credentials of Prime Minister, Councillor or Lord Mayor to their lot in life?
Could it be failed academia that drives so many to want to add ‘Professor’ or a ‘MBA’ to their birth names?
And why is this epidemic so prevalent in Real Estate? Sometimes we let our crazy egos or industry jargon consume what was originally a way to help people understand what we actually do and how we can help them.
From first-hand experience, I absolutely know how deeply some people’s primal needs are to boast superiority over their colleagues by being anointed as the ‘Senior’ Salesperson, or ‘Senior’ Property Manager, simply adding the word ‘Senior’ to their business cards. It’s an amazing ‘status’ to many.
It’s time to put yourself in the shoes of your clients.
Is a ‘Senior’ Property Manager a person of respected authority, or a really old Property Manager who hasn’t yet crumbled under the intense pressure of a really tough job?
Does your Mum or Dad client really know what a ‘Lead Agent’ is or does? Do they trade in Lead? Do they appreciate being called Lead?
Would your Dad or Daughter know what duties a ‘Co-Agent’ carries out? Does the ‘Co-Agent’ own the company, or just help out on really busy weekends?
And what is it with the designations that are so big in the USA? Do any normal people honestly know what it means when a Realtor has a string of ‘GRI, ABR, CRS, MRP, ALC, CIPS, SRS, SERS, AHWD, C-RETS, PSA’ and even ‘RSPS’ letters after their name on a business card? Do they know what they mean or even care? I wonder if, in fact, some clients want to treat those things we claim to have with an ointment!
What’s my point?
It’s pretty simple.
Does your business Title really serve to impress you and your Mates, or does it actually honestly serve to assist your Clients by explaining your role and ability to help them?
In 1990, I heard someone referred to as the “Director of First Impressions’ for the first time. And, 26 years later, I’m still OK with that as an inward-facing title. It provides a laser focus for that employee about the core function of their role. But I reckon what’s happened across the rest of our industry in that time probably needs to be put under the spotlight for a relevance and reality check.
Now, I realise that there’s a marketing component to our titles.
I get it.
Some feel a need to impress, and I know it can be super-competitive in some markets. I understand that. But maybe we need to take a deep breath and ask our Clients what they really think, and, in fact, if they really actually care about our fancy titles.
What would happen if Real Estate Agents worked in different professions? Could you imagine their cards then?
So, lets get back to some reality with our titles so they actually say what we do and help our Clients out.
My recipe? 99% that’s a description of what we do, and 1% dedicated to strokes for our often-brittle egos.
For example, I’m a massive fan of Gahlord Dewald’s. I first met the ‘G-Man’ in 2009, and for as long as I can recall, he’s held the apt descriptor of President/Janitor. I can’t think of a better way to keep yourself grounded and to let your Clients know who you are.
These days I often use a title of ‘Cool Stuff Doer’ as my stage intro.
Is it self adulating? I don’t think so. (OK, yeah it is!)
Does it start conversations? Yes, often.
Does it describe what I do? Kinda.
But I’d argue it’s a damn sight better than the ‘Social Media Guru’ mantle claimed by many of my contemporaries.
(Hey, I should use President Peter Brewer instead! I hear there’s a looming vacancy that almost any dummy can try out for at the moment…)
What is your title? Does it tell your story? Does it communicate a real value to your Clients or does it just give you a ‘warm feeling when you’re sitting in a cold pool’?
What about other titles in business? What other titles have you seen that hit the spot well?
Let me know in the comments below…
In my life I get to meet some wonderful people. Bill Risser from Chicago Title in Phoenix, Arizona sits pretty high on the list of the most wonderful people I’ve met. Bill and I caught up recently to have a fun chat about all sorts of ‘stuff”. I hope you enjoy listening in to 2 blokes sharing their passion for all things real estate technology, and beer.
In my business, I get the honour of being invited into businesses of many sizes right across Australia, New Zealand and the Unites States, and there’s one common series of words I hear that I consider are the most dangerous you’ll ever hear in any business.
In the video snippet below, I share my thoughts, including problems I see with the typical real estate transaction today. And I share the words I guarantee will cripple any business that constantly utters them.
Video courtesy of Professionals Real Estate Group
This video snippet is from a 3 hour workshop conducted by Peter where he challenges the real estate salespeople and business owners to change many of its lazy behaviours before its too late.
If you’d like Peter to speak at your office meeting, training workshop, or company conference you’ll find his range of fees, services, and booking information here.
I enjoyed meeting Members of the Elders Real Estate Network in Cairns recently. I’ve extended my offer to spend 2.5 hours in any Elders Real Estate office working deeply with you or your team to embrace the changes of technology in your business. Please call me if you’d like to take advantage of this heavily discounted opportunity. I’m on 0417630962