Residential Real EstateEliminate Free Services
The categories of free in real estate are legendary: free property showings, free open houses, free broker opens with “free” lunches and the list goes on and on. While we may have trained consumers to expect free, not all trust it.
When I polled more than two hundred consumers in my 1998 “Frugal HomeOwner® Survey” many stated that they would pay for services we currently offer for free if they could obtain them from an “unbiased party without the pressures of being expected to list or sell something to obtain the information they needed”.
In other words, our traditional sell-something-before-we-get-paid approach has many consumers leery of the salesmanship techniques we use. It boils down to the fact that “free” in any industry is an oxymoron. Each and every activity/service carries its own degree of overhead for running the enterprise including insurance, marketing, employees, etc.
In fact, one of the most abused services is the amount of supposed “free” services squandered by real estate salespeople. Until each one of us determines what an hour of our time is worth and be willing to write a check for every hour spent (for most of us it’s between $75 and $200+ per hour), we will misguidedly attempt to compete with “free”. As seen in previous recessions, many real estate people are forced to leave the business not solely due to a lack of sales, but from the sheer cost and mismanagement of “free”.
Eliminate "Free"
The next time you present a CMA and the seller instructs you with, “Thanks for coming to talk to us today. We’ll get back in touch with you. In the meantime, just leave your market analysis there in the pile with the other twenty three”, I challenge you to retort with your own rendition of the following: “Mr/Ms. Potential Seller, I work differently than most other real estate agents. Like CPAs, attorneys, and other fee-based professionals, my time and analytical skills are truly my stock-in-trade. I prepared this CMA to determine approximately what the home would sell for, but my practice is not to leave the analysis with you unless you decide to work with me. If you’d like to purchase it from me, however, it’s available for $____ which covers my time and expertise to produce it.”
As Dr. Phil McGraw, the Oprah-branded psychologist says, “The most you’ll ever get is what you ask for”.
Author’s note: Since licensing law rules and regulations vary between states/jurisdictions, be sure to check your applicable laws prior to charging for unbundled fee-for-services.