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There’s no doubt that the recent changes to broker compensation have shaken up the industry, and it’s natural to wonder how this will play out in your business over the long term, especially if a majority of your clients are buyers.
Buyers are probably already approaching you with myriad questions based on what they’ve heard and read over the past several months. We have been encouraging our agents to lean into these questions. Use this time as an opportunity to strengthen your value as a trusted advisor with buyers as you continue to build those all-important relationships at your business’s core.
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Here are some things to consider as you navigate this new environment.
Don’t fear the conversation
This is new for you, and it’s also new for your clients, so it’s likely that both sides will be a bit apprehensive.
After the overwhelming amount of news on this topic in the past several months — with terms like “price fixing” and “collusion” in the headlines — it’s likely that some of your clients are feeling unsure and perhaps even a little defensive when it comes to navigating their next real estate purchase. It’s your job to stay calm and confident, remembering that one of your primary roles is education.
Let their questions open the door to productive conversations. In some of our markets, the settlement changes went into effect in early July, which let us see how the new laws would play out.
In most cases, sellers understood the new buyer-broker compensation arrangement and were willing to cover those fees as part of the terms of their purchase offer when asked by the buyer.
Be ready to articulate your value
Hone your pitch so that when a potential buyer questions the cost of your services, you’re able to communicate your value in a way that resonates with them.
To prepare, make a list of the tangible benefits you bring to the table.
- Do you achieve a lower sales-price-to-list-price ratio for buyers?
- Does your firm hold top market share in an area?
- And what does that mean in terms of being able to access off-market listings?
A buyer simply wants to understand how working with you — your experience, your access to pre-market inventory, your strong relationships with other agents in the market — is ultimately going to benefit them.
Ask yourself these questions to come up with talking points. Remember to keep them concise, boiling the information down to three or four things that are easy to understand. Practice until you feel confident.
Tell a story
The above points notwithstanding, don’t try to sell yourself by reciting long lists of services you provide or explaining your market position with a laundry list of numbers. That will just confuse your clients.
Instead, tell a story that relates to your clients and help them understand that you have worked with other buyers in situations just like theirs. Perhaps you worked with a buyer who bought a home off-market that they never would have been able to see without you. Or maybe you had a seller who was concerned about a half-point commission difference, but they wound up netting several additional points because you were able to negotiate a great deal.
They want to know that you get it and that you get them. And as an added benefit: The more you tell your story, the more confident you will become.
Lean on the data
Last year, real estate consultancy 1000Watt surveyed 1,000 consumers who bought a home in the past three years. The survey asked homeowners to consider a possible future in which they’d be required to sign an exclusive agreement with a buyer agent and pay out of pocket for their services.
The response? Seventy-five percent of those surveyed said they would still choose to have an agent represent them, which bodes very well for the future of buyer agency.
I also want to point you to a number of studies of consumer purchasing behavior that, time and time again, show that a large majority of consumers will pay more for a higher-quality experience. Keep these statistics in mind as you work with buyers.
While the settlement has changed a number of things, it has not changed the fact that your clients still need you. Stay confident, listen to potential clients, be the advisor they need, and you will thrive.
Amy Corr is the chief brokerage officer for @properties Christie’s International Real Estate. Find her on Instagram, Twitter and LinkedIn.
