I never feel I am in competition with anyone. I can't remember the last time I didn't get a listing I wanted. Attitude is essential. Knowledge is also essential. But a total belief that you will provide the best representation in town s perhaps the most important thing.

Yvette,

I don't worry about competing with discount brokers - I'm of the firm belief, you get what you pay for.  Buy cheap, you get cheap - buy discount, you get discount.  What sellers need to remember is look carefully at what service the discount agent is going to cut in order to give you discounted service.

I provide my services, full service listings - for a fair compensation.  I give my clients what they deserve - my best!

Great post and with over 10,000 agents in my Raleigh market competition is fierce.

Thanks, Yvette.  Reading Rebecca's comment makes me wonder how Tucson, with more than 6,000 agents and 1,000,000 in population stacks up on an agent/per capita basis with other major population areas around the country.  Another blog post idea!

Mike in Tucson

I'm not sure anymore what the word "discount" means in real estate.    I work on the quality principle no matter what decision I make about the fee I am charging my client.  New business models  give us the opportunity to look at what we do and make improvements.  Read and watch what the other brokers are doing and see if there is anything in their plans that might actually benefit you.   Then beat them at their own game if it is appropriate.

I like this post.  However we choose to work with clients, we have to be clear ourselves to communicate our value clearly to them.  Thanks.

Good debate topic on the board Yvette!!  I offer "all of me" which means I charge a fair rate.  Amazingly, real estate has tripled in value in the past 20 years and full commissions "back then" were good.  NO WONDER everyone has a real estate license!  We all got the memo!!

A good reputation competes well with discounted commissions.  If your potential clients hear that your honest and fair and get the job done they will choose you.

I think competition is great and is important.  My problem with some "discount" brokers is that they misrepresent the services they ultimately offer.  There is a particular company in my area that purports to be full service at a discount -- and nothing could be further form the truth!  So is that really competition??? It is not good for the consumer or for the profession when a brokerage misleads the public.

Making sure you are aware of the marketing methods and models is only part of the equation...but offering your services that get results...that is the bottom line.  Nice post.

good info

the idea of the no closing cost bank loan are the same...

you have to wonder what the consumer is thinking they are getting

I provide my clients and customers with the best sevice there is.  My fee is fair and well earned.  Looking for discounted fees, look elsewhere.

Great post

I get people shopping me all of the time.....

When I get beat, I tell em good luck. <= and they usually need it.

You have to believe in yourself first before you'll get any listing.  People usually get what they pay for and if it sounds to good to be true, then it probably is.  I tell people this, because I believe it.

I like the flexibility to charge what I and the seller agree on. 

 I get a little nervous when there is discussion of discount rates...it implies there is a norm or standard and that comes very close to anti-trust issues.  I would even discuss commission with family members who are in the profession.  I have had agents comment.."your a good agent because you pay X%"  I told the agent I was offended. 

Most of the time my co-broke is with-in what appears to be the local norm.  When it isn't it has a lot to do with my customer's needs.  If someone doesn't want to show my listing because the co-broke is "low" then I hope they are just as put out when it is "high". 

What really gets me is when you get to the closing table and find the listing agent kept more than they offered.

Fancy threads and status vehicles don't prove your worth but they do raise your overhead.  I walked away from one office when the broker told me what sort of vehicle I needed and to "fake it 'til you make it." 

A great trainer I work with, Ralph Williams of Bottom Line University, has suggested eliminating "Discount Brokers" from our vocabulary.  Instead use the term "Limited Service Brokers", it is a great and appropriate spin on the situation.

I don't compete with them, I dismiss them based on results and show what I provide. I work hard for my customers and for my commission and I make sure my customers understand that.  I openly discuss both things. I get paid for what I do. I work hard, do good things for my customers and expect to be paid accordingly in the end.

This is not something that you can have any doubts about.  If you don't firmly believe that you EARN all of your commission, then why should your customers believe it?

-Bill

Thanks Yvette............I need to analyze what I do and this is a great start.

Duane Hosek in the Black Hills of South Dakota

There will always be different business models -- and most likely a customer base for each model. This is true to real estate as well as retail store -- Nordstroms and K-mart - they both exist. If discount brokers want to make less money that is there choice I guess. And if clients want less service, I guess they can get less service.

There is more and more competition in the market and limited service brokerages are popping up everywhere.  While I think for the 'right' seller, one that is knowledgeable and realistic and has a property in a 'hot' area this solution can save them some money - too often I see sellers list and have their properties sit,sit,sit on the market.

I know that the services I provide are worth my fees - I work hard for my commission - but there will always be people who are stuck on x% commission number and will solely base their decision on that - I wish them the best and know that in the future there is a strong possibility that they will come back to me again.  When they do, after being stagnant on the market for some time, our job as listing broker becomes even more challenging.

We have a new "flat fee" broker in the area. It's the "$495.00 and we'll list your home" type of sales pitch. This company lists all of the services that are provided. In the longer paragraphs about marketing, receiving advice, going to the closing, etc., etc. you have to look very closely in the verbiage to find "these services provided at an additional charge".

As we all know, many people don't read the fine print and expect normal services provided by full service realtors.

Yvette,  Excellent review and very well written.  Embrace change, understand the differences and challenge yourself.  Well done.

The best thing I've heard from my seller client recently was:  "Debbie, I wanted you to know that I felt like I really got my money's worth by listing with you." 

I was floored - this was a woman that tried several times to get me to reduce my commission before I listed the house.  I was tempted because it was an awesome house in my own neighborhood.  But , I thought that if I did it for her - I'd have to do it for everyone else in the neighborhood ( and there goes my reputation out the door).  I'm so glad now that I stuck to my guns!  It just doesn't pay in the long run to ever reduce your commission.  I would be fine losing a few listings to a discounter for this principle. 

As a former Top Producer with a large Prudential Affiliate and now an Owner for the past three years of Assist2Sell VIP Realty, allow me to make a few comments and observations for what it is worth. Yvette, nice post and you are wise to ask questions and seek out info on other business models.

 I prefer "Alternate Business Models" as opposed to "Discount Brokerages", Discount to what?? As all commissions are negotiable, using some of the reasoning I have seen in posts, some of the biggest "Discounters" I know then would be some Remax Agents in my area. Grouping all Discount Brokerages or Alternative Business Models together is like Grouping all REALTORS, Traditional together, surely some of you stand out from your peers ??

The Quality of Service has nothing to do with Level of Commission. I know Trads in my former company who charged their clients "Full Commission" and didn't even know how to Email, let alone download digital photos etc. Just like not all Trad REALTORS are created Equal, neither are all Discount Models. If I didn't give exceptional service and get results, I wouldn't be in business.......no matter what I charged.

My clients receive Fantastic Internet Exposure, Homes "Showcased" on Realtor.com, Personally Narrated VIDEOS of their homes imbedded into my websites, Video Email Correspondance, Email Video on Demand to potential Buyers, Color Advertising in Local Paper, Automated Email Feedback system and the List goes on and on. All While Saving Some $$$$ in the process. I didn't "Forget" overnight how to sell a home and service clients after 8 years as a Top Producing Traditional Agent, because I switched, In Fact it has made me a BETTER Agent, not to mention wealthier.

I have nothing but respect for everyone in this Industry, no matter what Model they operate under or how much they charge, until they give me a reason not to be worthy of that respect. There are Great Traditional REALTORS as well as Incompetant Traditional REALTORS, the same goes for "Discount". In the end, it is all about You and what makes You as a REALTOR stand out from the rest. All the Discount Model has done is Make the Phones ring of the hook from potential sellers and get me in the door, the Rest is up to Competance and Skill. Compete by Showcasing your skills and what makes you Shine, but one Little bit of advice.....Don't BAD MOUTH your competition, that makes you look insecure and Educated Sellers can see right through that. I can't tell you how many times Sellers have met me , listened to my presentation, Listed with me , then proceeded to tell me How SO & SO from XYZ Realty trashed me up & down, I politely say there are all types of Realtors and Business Models and this is what I bring to the table....Done Deal.

It's a big PIE and there is plenty of pieces for everyone! Feel free to check out my previous Blog on this topic : STOP Whining and Give Them a Reason to Call YOU!

Expect a Great Day!

great post

The lowest commission here does not sell.  Don't have to compete with them directly as the proof is in the numbers,  Good old F has about 85% of their listings expire without selling.

Good post. In my market we have lots and lots of competition, however, the "discount" brokers don't bother me at all. As others have said, you get what you pay for and I think many consumers have that figured out. As Bill said - They are not discount brokers but limited service brokers...very true. 

Great Post Yvette, I just came to bookmark til I have time to chime in.

Yvette,

The agent business is getting more competitive by the day with the Internet making all sorts of inroads into the once sacred turf. To survive there means you have to get a grasp of what it is and then find your niche. The same goes for the mortgage originator. Massive changes are taking place right now and in order to survive is to adapt.

I've written a few posts about discounters, and it can be summed up with this:

Mercedes doesn't discount, but you can almost always get a discount on a Kia.   

This is definitely a hot topic. Recently an agent in my office went to a discount brokerage.

The questions you posed are great and we should all either know the answers to them or know before our clients ask.

Fortunately, I rarely have to compete for listings. Folks calll me to list their house not to interview. commission is a not an issue. There are many ABMS in my market that charge less than me. Some of the agentsa are very good and I am happy to work with them at anytime. I actually have a few I refer business to if the sellers owe too much and can't afford my commission. In my opinion, service has nothing to do with commission. 

Lane... Thats funny,I got a pretty good deal on my S500, must be my Negotiating skills.

Bryant, I always learn something from you...thanks for visiting.  It is that simple isn't it?

Great post Yvette. Well-stated and nicely presented. You makes some great points and these are issues we all should ponder weekly to really gain an advantage over our competition. Thanks for sharing!

I tell my clients that although I'm sure there are many competent agents in that field, it's a good possibility they'll get discount service. Very often it's a case of demonstrating the level of commitment you're willing to give as a full service agent. Good post Yvette.

Yvette - I guess my only question revolves around, why did real estate agents see their income double in the last few years. It occured because prices doubled and agents continued to operate on the relatively same commission fee structure. Work did not double, cost did not double, come to think of it the only thing that doubled was the price of the house being sold.

I am not sure that holding cost to earnings for the same work is a discount. In our market, agents have become very overpriced.