BRER Real Estate Marketing Blog

Evidently not, according to a Consumer Reports survey quoted on Inman News.

If you’re a discount broker or working in that type of a brokerage, from what I’ve seen, you’ve taken a step toward a Real Estate Consulting model.  The objective is to provide a lower fee, but most of those brokerages I’ve seen have a “project description” that identifies what services will and will not be provided.

Full-Service Agents Just Seem to Provide Full-Service

I think it becomes a problem when full-service agents reduce their fee because the seller negotiated.  Full-service agents often don’t have a list of services - they just do what’s necessary.  And, according to the Consumer Reports survey, they perform the same services, regardless of the fee.

For example, the survey discovered that 46% of sellers attempted to negotiate a lower commission, and of those, about 71% were successful!

OK, so an agent decided to reduce their fee.  But, did they reduce their service level?  Evidently not.  The overall conclusion Inman News came to from reviewing the survey was that the amount of the fee didn’t affect the quality of the service.

Don’t you think that’s a bit crazy?

Real Estate Consulting Rocks!

The typical arguments I’ve seen about not reducing fees use examples like lawyers.  If a lawyer makes $350 an hour, do you think they’re going to lower that fee because you ask?  I can understand that it might be a bad example to use.  REALTORS® might not really identify with being on a par with lawyers.  But, what about consultants?

The consulting industry has been writing project descriptions forever.  A consultant’s knee-jerk reaction to a discussion of reducing fees is to find a way to meet the client’s objective while eliminating some of the steps in the process.  It would never enter a consultant’s head to reduce the fee and provide the same level of service.

I think the issue gets back to how you value your skills.  I know there are a lot of ditzy real estate agents in the world; I know that there are a lot of agents who just work part-time; there are agents who got their license because they were bored and wanted to get the commission when they sold their house.

But, there are also very talented, personable, knowledgeable, seasoned professional REALTORS® who really care about their clients, who work very hard, and who have saved more than one client’s behind on a deal.  Why would that person want to lower their fees?

Start by Documenting The Effort Expended

Maybe a place to start is by figuring out how many hours you spend on various transactions.  Do you have that information?  Not just a guess, but an actual accumulation of hours spent?  If so, bravo! 

If not, start jotting down the hours you spend in all the various aspects of helping a client buy or sell a home.  Once you start getting a feel for the effort involved, you’ll be able to appreciate the effort and expertise you bring to the table.

That might just start you on your way to moving toward a real estate consulting business model…

Thanks to Bill Gassett, who consults on Hopkinton MA real estate, I found some good ideas for increasing your exposure in your local market and getting quality incoming links to your blog.

Check out the site www.YourStreet.com.  Once you join, you will be able to:  “post articles, voice your opinion, join a discussion forum, and display your user profile” according to the website.

Bill has found the site helpful because he can send his blog posts to YourStreet and they are posted on the the site’s community page for his market area.   I’m not sure how much juice the incoming links have because there are so many pages on the site, but I think it’s a great opportunity to check out.

YourStreet will also syndicate your blog if they think the content is appropriate.  That will eliminate the need to manually add the post to the site.  Just use one of the feedback forms to request syndiating your blog.

The other site Bill mentioned is www.Topix.com.  Bill says that articles are cached pretty quickly on this site by Google, and Yahoo is showing some of Bill’s articles on Topix as incoming links.

Make the most of your blogging effort - get the word out electronically!

If you’ve been in real estate for a while, you’re undoubtedly aware of the problems there can be when you’re trying to manage a contact database.

Depending on your technology setup, you could have contact information spread out over numerous databases:

1. The database for your website
2. The database for your IDX MLS provider
3. The database for your contact manager

It’s a difficult situation.  I really wish industry providers would get together and come up with standards that would make consolidating information much easier.  After all, look at the Internet!  Lots of people had to agree on lots of issues to make it work. 

The problem is made even worse by the fact that, in my humble opinion anyway, no one vendor has put it all together yet.  Some IDX MLS vendors offer websites, but they aren’t the best.  Some website vendors offer contact databases, but they aren’t the best either, and the list goes on.

So, looks like we’ll just have to put up with the problem of where to store the contact information that should really be centralized to be effective.

One thing I was very happy to see is that Top Produceer has removed the “frame busters” from their forms in Top Producer 8i.  So, if you are a Top Producer user, you can now frame forms into your website.

No consolidation required - anyone who completes a form on your website will go directly into your Top Producer database.

I’m so excited.

The Answer Is: No.

Just because you are establishing a consulting business model, you’re not necessarily reducing your fees.  You are letting your clients have choices about the level of support you provide.  And, I think it would be important to make that distinction clear to your clients.

As Jack Harper said in the Real Town Real Estate Consulting Group, “we have a pricing schedule that sets hourly and bundled prices such that when the client decides to add a majority of them all up it would total just below full-rate traditional commissions. The reason is that they are paying up front. Since the risk to our income is reduced, we can afford to lower the fees.”

Have you ever thought about all the things that have to be done when you’re acting as a listing agent?  If not, take a look at this list compiled by the Orlando Regional REALTOR® Association.  There are 180 tasks.  Not all of them need to be done for every transaction, and depending on the situation, some of the tasks may take a few minutes or a few days.

Now, as you look over that list, think about the potential for breaking the tasks up into “bundles”.  Can you see the possibilities?

I’ve talked before about the fact that I think agents and brokers are running real estate consulting service firms.  Today, I saw a couple interesting posts on RealTalk about changing how real estate professionals charge for their services.

Have you thought about it?  Do you think it’s possible?  Do you think it’s necessary?

The posts were made in a RealTalk Group called “Real Estate Consulting” by Jack Harper.  Jack has been a licensed REALTOR® since 1983, and is a broker in California.  Jack says that he is an

• avid proponent of radical change in how we in the real estate industry need to restructure our business models - away from transaction-dependent contingent commissions and toward service models that are more client-centric and allow the consumer full choice when it comes to selecting the services they want us to perform on their behalf.

I think it’s a fascinating concept for real estate professionals to actually get paid for the time they spend on a client’s behalf.  Here’s how Jack explains his approach.

Having been in the consulting business for quite a few years, I understand how the consulting fee model could be applied to real estate.  I think the question is, will the industry be able to pull it off?

Jack talks about three different types of pricing models:

• Hourly Services
• Consulting Packages
• Full Service Plans that could either be traditional commission or a capped fee

Can you think of services you perform that could fit into an hourly fee structure, or ways to bundle certain services in to a package?

The first thing any consultant learns is how critical it is to manage the “scope” of the project.  That’s why it’s important to write a project description that defines exactly what tasks will be performed.  Any consultant who doesn’t learn how to manage their projects’ scope doesn’t stay in business very long!

If a proposal states that two revisions of a design are included, that gets written down and accepted by the client.  If the client wants 15 revisions, they know that some of those revisions will be outside the scope of the project.  Well, they don’t always know it — but when the fact is pointed out, they can see it’s right there in black and white.

Why should real estate consultants charge any differently?

When was the last time you really took a hard look at your listing presentation?  If it’s been a while, take the time to get it updated.  Especially in a slow market, you don’t need to spend time with listings that won’t sell or sellers that won’t listen.

Use Your Listing Presentation to Educate and Evaluate Your Prospect

Just like a job interview, a listing presentation is an opportunity for you to decide if you want to work with the seller, while the seller decides whether he/she wants to work with you.

Given the fact that you are running a real estate consulting business, we should stop thinking about these meetings as listing presentations.  Maybe we should call them Home Selling Evaluation Meetings.  The seller evaluates you and vice versa.

Elements of a Great Home Selling Evaluation Meeting

Don’t Just Talk About Technology, Demonstrate it! - You’ve got a laptop computer, right?  Put your presentation materials in PowerPoint.  And, while you have the computer handy, show off a few other things:
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If you’ve ever tried to coordinate the colors on your real estate web site, your business cards and letterhead, and your yard signs, you know what I’m talking about.

I’ve been working with a client who has just established his own brokerage.  We designed a logo for him, and we’ll design his brokerage web site to utilize the colors from the logo.  He also needs yard signs, business cards and letterhead.

You’d think doing those tasks should be fairly simple.  But, you’d be wrong.  If you find yourself in the same situation, here’s a brief primer on colors.

Website Colors

When you’re identifying colors on websites, you use six-digit HEX numbers.  For example, 000000 is the HEX equivalent of black.  Each pair of numbers represents combinations of Red, Green and Blue.  The HEX numbers are used in HTML to identify colors.

HEX colors translate well into a color model known as RGB.  Black can be identified in RGB as 0-0-0.  That indicates a lack of any color, of course.  Equipment like monitors and television sets display colors using RGB.  So, it’s fairly easy to display the color you want on a monitor because it uses somewhat the same method to identify the color.

However, you know that sometimes you see different colors on different monitors.  In the same way, you can really mess up your television if you adjust the color settings to be too green or red, and so on.

Printing Colors

A printer who is producing your business cards and letterhead uses another color model, CMYK.  Unfortunately, the conversion from HEX or RGB to CMYK is not very direct.  Therefore, if you like the website color you see on your monitor, you’ll have to work with your printer to choose CMYK colors that are consistent.

Sign Printing

If you’re having signs prepared, unless you’re using cut vinyl, you’ll probably run into yet another color model, Pantone colors.  Pantone colors do not directly translate into any other type of color model.  So, if you want your sign colors to match your website and business cards, you’ll have to work with the sign vendor to pick a color that is consistent.

As you can imagine, coordinating production of all of these real estate marketing materials can drive you crazy.  And, we don’t want to even think about what happens if you want to get some coffee mugs printed.

The important thing to remember is that you want to maintain a consistent “feeling” with your marketing materials.  If the colors are slightly different (and they probably will be), no one will notice but you.

If you saw a McDonald’s sign that used a slightly different shade of yellow, you’d still know it’s McDonald’s.

Are You Lost in the Crowd?

Have you taken a look at your About page on your website lately?  What about your introduction on your marketing material?  When you read about yourself as you are presented to the world, does it sound familiar?  Does it sound like every other agent’s description of themselves, with only the names changed to protect the innocent?

Anytime you write about yourself, you should really be writing about your business.  Many “About” pages are written like a biography, something like this:

• “Joan has been with ABC Realty for four years, and was a member of the Millionaire Club in 2003.  She has been a licensed realtor for ten years.  Joan is a member of the Podunk Association of Realtors and the National Association of Realtors.  With her husband Harold, she has lived in XTown for 15 years and has a son and daughter.  Joan loves people and does her best to help her clients achieve their dreams.”

OK, So What’s Wrong with That? 

Well, for one thing, you’d think a REALTOR® would know how to display that designation.  For another thing, most people think if you are a member of the Millionaire Club that you make a million dollars a year.  That can be pretty intimidating; besides that, it’s an industry award and doesn’t necessarily mean anything to someone who isn’t a real estate professional.  Finally, citing an award you received 5 years ago and never again since doesn’t really help your cause.

The biggest problem is that there is not one benefit identified.  A prospect reading that description might think Joan sounds like a nice person, but they have been provided no compelling reason to work with her.

Get Benefit-Oriented!

Long ago I took a sales course that emphasized three ways people describe things.  I’m not sure if they’re still teaching this approach, but it’s always worked for me.  The idea is that you describe a product (or a real estate consulting practice) in three steps:  Feature, Function, Benefit.

Basically, you work through those three steps until you reach the benefit, and that’s how you sell something.  Here’s an example - let’s say we were selling a 6-slice toaster:

• Feature:  Six toasting areas.
• Function:  Lets you toast a lot of bread at one time.
• Benefit:  No one has to wait for a piece of toast while their eggs are getting cold.

The closest thing to a marketing message in the agent’s bio above is this: Joan loves people and does her best to help her clients achieve their dreams. 

So what do you think?  Is that a feature or function?  It sure isn’t a benefit!

Get a Brand

The purpose of developing a brand for your real estate consulting business is so that you can identify your niche, and come up with a list of benefit statements that you can use on your website and in your marketing material.

If you don’t have a brand, at least take a hard look at your marketing message and make sure it’s full of benefits!

It could happen to you if you visit www.AgentSuperStore.com. 

This site was introduced on July 16th, so it’s still very young.  The site is set up as a virtual convention floor.  The home page is pretty creative, letting the visitor select what they want to see from a convention floor layout. 

The AgentSuperStore has categories for many different types of products and services that a real estate professional might use.  The categories range from a New Product Showcase to Education and Professional Services to Electronics and Signs.  There’s also a social networking component with a Forum, member profiles, messaging and so on.

According to information on the site:

AgentSuperstore.com’s goal is to serve as the one-stop, online Real Estate directory, as well as the “go-to” destination of all agents, brokers, vendors and industry professionals nationwide.

That’s a pretty big goal, and it will be interesting to see how it turns out.  If you’ve used the site or have an opinion . . .   leave a comment!

If you visit www.BuildRealEstateResults.com, you’ll  notice that the header includes the phrase Web-Centric Real Estate Marketing.  So, what’s that, you ask?

I did a presentation recently for the local chapter of the National Association of Hispanic Real Estate Professionals (NAHREP), and prepared a Powerpoint presentation for the visuals.

I talked about the things that are critical to real estate professionals now.  First, a brand and USP (Unique Selling Proposition) to differentiate each agent from all the others.  Second, a logo to represent that brand.  And, third, a lead-generating real estate website.

This graphic was used to illustrate the idea of web-centric marketing:

I was rather pleased with myself, so thought I’d share the image.  If you use direct-response marketing in your direct mail and print ads, you’ll drive prospects to your website.  If you do SEO so that your site ranks for effective keywords, you’ll drive prospects to your website.  And, finally, if you use the Internet to promote listings, you’ll drive prospects to your website.

Besides the fact that if you don’t have a real estate website you’re in deep trouble, you can use a website as the central component for just about all of your marketing.