From New York’s 17th Avenue to the board rooms of Detroit’s auto makers, marketers are crunching numbers to determine what sales price will move the most products and what cost of production will give their customers the greatest value-within company profit projections, of course. Saturn sells more cars than Mazaratti at a lower price point. The same goes respectively for clothes makers Gap and Versace. Somewhere in the middle lies Ford and Old Navy. All of these have a customer niche that has determined what they need, want and can afford. Prudent sacrifices are usual and no one gets hurt. When one moves from products to professional services, there most often becomes a higher level of risk and more dependence on the competence and proficiency of the service provider. When the service provider is required to be licensed by the state in which they practice, you can bet it’s because the stakes are higher yet. This group includes doctors, lawyers, investment bankers, and real estate agents, to name a few. The choice of your service provider becomes more critical. The real topic here is buying and selling real estate and what I will call the “value formula” of the real estate agent. I define value as quality over cost-or what you get for what you pay. Service professionals set their prices much like other marketers, based upon their cost of producing the service, demand, and when discoverable, their success record.
I think it is a fair assumption that most consumers expect the highest level of service from their real estate agent, no matter what compensation structure they are on. This is where products take a wide diversion from services. Very few real estate agents will offer a bargain rate and inform you that you will receive bare bones service for that rate. When interviewing, beware and recognize what is “steak” and what’s just “sizzle.” Before going further on that subject, let us explore the similarities and differences in agents themselves. Like the legal, medical, and other professional fields, we all begin the same. Immediately, some show more prowess for what they do. Some work harder, and some train longer to develop their skills. Some gain more experience, more quickly than others. Some, quite frankly, are more ethical and honest than others. Some give back to the community in volunteer time and donations, and some are less philanthropic. Remember, doing business with “givers” automatically extends into the common good. While it may be human nature to seek a path of least resistance, there exist those people who are driven to do better no matter what the cost to themselves, in either time or money (which for most of us are our most limited and in-demand resources). How many children have pined for mommy or daddy while they were taking extra classes, sometimes away from home, or giving extra time to a client who needs special attention? The sacrifices made by the very best in any field are rarely recognized by their day-to-day customers. Yet the level of service grows, incrementally better and better, almost without pause, from the very beginning of their careers. The real payoff for these exceptional people is in delivering what their customers want and need with consistent success and few if any problems along the way. Considering that what we do for our clients is to begin with a problem-special home to find and buy within budget and/or a special home to sell for the most money possible, all within market conditions possibly not most conducive to the goal. It’s that simple and that complicated. Now, I can further address two subjects we touched on earlier. Commission structures and those who follow the path of least resistance. We have in our profession what are known as “discount brokers.” As you would guess, their commission is less than those I refer to as “full-service brokers,” though many of the discount brokers will certainly purport to be full-service and to deliver the same results.
My experience and research data proves otherwise. Consider how much easier it is to tell a prospective home seller, “I’ll do the same job for thousands less,” than it is to actually demonstrate your measurable success of client’s objectives (most money-shortest time-fewest failures) as above industry averages! This is not to say discounters don’t have a valid place in our industry. What that place is, I can’t elaborate with much justice, without running too long here, although I will reiterate “you get what you pay for.” That said, consider two questions: (1) Is your home an important or even vital part of your long-term financial picture? i.e., kid’s college and your own retirement and (2) Would you risk your family’s health to a “discount” doctor?
To fully grasp the real estate agent value formula, consider what all is entailed in meeting your objective with the greatest success. To get it all in here, I’ll just offer a list of resources that I consider valuable to the task: availability; experience; honesty; advanced education; and some specifics including: high-speed Internet and a good portable computer which you can use to play video games or visit sites where you can see this is how the ranking system works; cell phone with text messaging; dependable email (not including Juno, Hotmail, or AOL); digital camera and ability to use it well; Acrobat 5.0 or better for writing emailable PDF files; color printer; assistant(s) (ever seen a doctor or lawyer doing their own day-to-day clerical work?); tracking and reporting systems; dependable four-wheel drive auto (in the foothills at least); and probably as important as anything, a written plan of progression from start to completion of the service.
Why is all of that important you ask? One missed impression to a good prospective buyer is a missed sale. A new listing, well priced, will often not wait a few days or more for you to discover it. One missed communication may spell disaster to a delicate transaction. Ditto mishandled paperwork. Out of state (and out of country) prospects need special responsiveness. MUCH is at stake. To think that all real estate agents are alike and a lower commission is money in your pocket is naive and dangerous. As you may well have guessed by now, I’m a full-service Realtor®, and frankly, I turn down many clients because they want me to reduce my fees to levels that I simply cannot earn a reasonable living at AND deliver results to the standards to which I have risen over the years-the very standards, not surprisingly, that every seller and buyer want. The clients I do serve would be short-changed if I did not keep the marketing reserves and state-of-the-art tools and systems in place for their benefit. The least expensive is not always a bargain, and maximum value is truly only measured in the final outcome. On that note, check your prospective agents’ references and success ratios, then choose the one who will do the best job. K.C. Butler, ABR, CRS, MRE of Re/Max 100, Inc., an Evergreen resident, is married and has three daughters ages four to eighteen years. He is a twenty-four-year real estate veteran, and past president of the Jefferson County Association of Realtors. He has been Jefferson County’s Realtor of the Year and Re/Max International has awarded K.C. with RE/MAX Hall of Fame, Lifetime Achievement, and “Above The Crowd” distinguished service awards for his sales production and for industry and community contributions. He is a consistent member of the Re/Max Platinum Chairman’s Club (Re/Max’s highest) for high-volume annual sales. The internationally acclaimed Starpower Network welcomed K.C. as a Starpower Star in 1995 for his special industry expertise. K.C. lectures locally and nationally and offers free real estate lectures to local groups, depending on his schedule.