Message from the CEO: Competing with Real Estate Discounters

We have been talking about how important it is for all of us to focus on getting more listings. The most successful agents put the majority of their lead generation and prospecting energy into finding sellers. Believe me, I know it’s not easy! But that’s what makes us great: our drive and motivation to work hard and be the best.

One of the toughest problems agents face when talking to prospective sellers is having to compete with the real estate discounters: the companies and agents who entice sellers with their promises of LOW COMMISSION RATES! How do we convince the sellers to list with us instead? How do we show them that we are worth paying a standard commission to? Here is a strategy that can help you win the battle over real estate discounters:

Do your research! Take some time to study the methods and sales statistics of your competitors, and use the information to your advantage.

1. Find out what services they offer and what services they don’t. Based on your strengths, identify three or four services that you will provide that the discounters will not. For example, here is what Redfin offers:
They offer just the basics at 1%, and some extra services like cleaning and staging, for 1% more. For a $1,000,000 home, that’s $10,000! You can easily show them that you can help them get all those services done for much less money.
Plus, you can show that you offer all the same services that your competitors do, and several more. Play up your strengths and your company’s strengths. Don’t forget to showcase the services available to you in, such as the Golden Ruler, the unique property website, social media advertising, etc.

2. Arm yourself with MLS data. Find out how long it takes their listings to sell, and what percentage of the list price the homes sell for. Find out how many of the listings expire, withdraw, and/or get re-listed with other brokers. Compare these statistics with your own sales statistics, or the statistics of your office or all of C21 REA if you don’t have a lot of sales under your belt yet. The goal is to be able to show sellers that listing with you/our company can actually net them the same or more money in many cases.

3. Break down the numbers. Find out what your competitors actually charge. Here’s a great example. Redfin advertises a 1% listing fee, right? Well, let’s read the fine print:
Look at the second paragraph. Notice the line, “Buyer’s agent commission not included”? That means that when they advertise the 1% listing fee, they are only advertising the listing side commission, not the seller’s total commission. So what the seller will really pay is more like 3.5% – 4%. And remember, if they want staging, cleaning and other services, they pay another 1%.

The bottom line.

Finally, be sure to present the information in a positive, not negative, way. Keep the information centered on the sellers and their needs and desires. Don’t degrade or insult other brokerages; rather, use that information as a jumping-off point to help the sellers see how great you are! Show them that you will provide the same services the discount brokerages do, plus other services, and that they will net the same amount or even more.

Leave a Comment