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It's not what we do that creates value....it's how we do it!

Hi folks. This post is an edited version of an article I wrote back in November of 2006. The comment thread on the original post is, in my opinion, one of the best in ActiveRain history. The comment thread involves consumers and members of AR heavily debating "What do you do to justify your high commission?" ActiveRain members were up to the challenge and made me very proud to be a part of this community. It was awesome!!! If you haven't read it before take the time to do so. You'll get to meet the infamous Candybags!!!

Anyway, I feel this article and the question asked is even more relevant today.

So let me ask it again....here. What do you do, to sell a property, that justifies receiving a x% commission? Why would the consumer want to hire you and pay your fee, when they can find all the information they need on the Internet (disintermediation)? What can you do to justify your commission?

Well folks I am here to tell you, you best be prepared to answer this question. And you best have a better answer prepared than your 25 step marketing plan and access to the MLS. This will not cut it in this day of disintermediation and discount, web based Real Estate agencies. If all you can bring to the table is your marketing plan you will find yourself either out of business or drastically reducing your commission to be able to compete in this market.

So, what do we do? Well, here's what I do. I build value in something that the consumer cannot access over the Internet. "Broker Bryant, that's pretty vague, can you expand upon that?" Of course. I thought you would never ask.

First, all people want to feel good about themselves and their decisions. You can provide that. You can help people decipher all the information that they have available. You can help them apply this information to their situation. Together, you and the consumer can come up with a game plan that will help solve their problem. You can listen to what their concerns and needs are and then fill them. Quit selling and just listen. You can be a trusted advisor.

Secondly, you can be a calming force. Selling or purchasing a home can be one of the most stressful things a person ever goes through. You can remain calm and help them through this. This can be achieved by constant communication and by constantly being there for them when they need to be reminded of why they are selling or buying. When the going gets tough, you can be there for them. You can let them vent their frustrations, on you, without taking offense. When they are all done, you can get them to return their focus, on the end result. Leave your emotions at home. It's not about you....it's about them.

Thirdly, you can be their friend. You can have honest and sincere, care and concern about their situation. You can lead them down the right path without placing your commission in first position. You can make them and their situation feel important to you. This cannot be faked. It must be genuine care and concern. Folks can tell the difference. Again, listen. Be receptive to what they are telling you. Then respond honestly and with conviction.

My point here, is to get you to understand that folks' emotional needs cannot be satisfied over the Internet. As Realtors, we need to position ourselves, to be the one person, that will take the time to make sure that their emotional needs are met. If you can achieve this, I can assure you, that your business will take off and your services will be in high demand. And the consumer will be more than willing to pay the price for this kind of service. Quit trying to sell them something they can get over the Internet for less money.

The Internet CAN provide the data and tools needed to buy and sell real estate but it CAN'T provide the emotional support that people need. It's not what we do that creates value, it's how we do it.

So that's it. Broker Bryant's crash course on overcoming disintermediation. Did I make you feel good? Did I give you a solution to the problem? Did I present it in a calm and informative manner?

So, what do you do to justify your high commission?

Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
http://www.brokerbryant.com/
***The content of this blog is solely my opinion***

Posted by Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc on 03/15/2008 04:11 PM

Comments (67)

disentermediation, opinion, educational

67 Comments on It's not what we do that creates value....it's how we do it!

MAR

2008

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

LOL. I haven't watched that vid in many rain moons.

It's still just as flippin' hilarious now as it was back then.

I'll be back later to create a little value :)

TLW...ROAR!

Pretty funny video, the only suggestion I have is if there was anyway to shorten its length a little. A lot of video viewers have short attention spans.

Michael, I have heard that on several occassions and agree. This is the only video I have done that was longer than 3 minutes. Ideally I try to keep them under 2. Unfortunately I don't have editing capabilities. I'm not that smart:) I just shoot and post.

I loved this vid....and hey...it portrays how you are not...:) Don't ya just love the multi million and top 5% producers? Of what?

Bottom line...it doesn't matter how many, how much we sell...it's how well we do it.

hahahah...I kept listening while I was typing.

Keep it simple right? Decipher info, be a calming force and be a friend. And though the internet gets all of us leads...it's what we do to bring it to close.

Thanks for Friday funny and info. :)

Broker Bryant - Lol, I remember that video. Haven't read the thread you speak of in awhile, I'm going to re-visit. You the man!

I agree with you B.B., the discussion was off the charts. What a wonderful reminder of what this community is all about. Excellent stuff!

Sure beats the "pig outfit." Also, I did get your point.

BB, I just got back from reading a portion of the Candybags dialogue....fascinating but I will need to go back to finish. I think I will answer your question by asking you...why do you use the phrase "justify your high commission?" Have you not already made a subjective statement that requires a defensive response? I don't justify my commission, I earn it! How? I always act as a fiduciary. Everything I do is in the best interests of my clients unless they ask me to do something unethical...then I fire them. I honestly give my all for my clients, I have been a respected REALTOR for 17 years and I invest my time, my expertise and my own money every time I take a listing (or take on a buyer); not focusing on my bottom line but rather what it will take to get the property sold for the highest price in a reasonable time period. I am constantly expanding my knowledge through education. And, in many cases I more than make up for my commission through strong negotiations and marketing. Plus, I answer the phone:)

Diane, It's the question the consumer will ask us. It's not my question. My post is offering suggestion on first, how to avoid the question being asked and secondly how to answer it if it is. Does that help?

OK I edited my post to remove the video. It seemed to be distracting from the article.

Now the picture is distracting from the article:-)

Hi WooHoo, It is all about the consumer and making them feel good in their decisions. But you knew that:)

Jason, Good to see you my friend. The original comment thread was something else. And the one where it started over at bloodhoundblog was real sad. I couldn't believe some of the stuff I read over there. Candybags ended up getting kicked off of their site!!!

Diane, I wanted to add. I know you know what you do and I know you earn your commission BUT how do you get the consumer to understand this prior to them hiring you and finding out?

Hey Hun, I love that video. I had to remove it though. It was overwhelming the message of the post.

Well.

Buyers think they can buy without our representation and services.
Sellers think they can sell without our representation and services.
The government tells the consumer we charge too much.
The financial markets used real estate to line their investors' pockets.
The public, the government, the media, the Buyer, the Sellers just want consumers to do it themselves.
Experienced agents and brokers are involved less and less in the real estate transaction.

HOW'S THAT WORKING OUT FOR THEM?????

My commission is justified by getting clients to the closing table; helping them achieve their objectives with as little stress and upheaval as possible and by heading off potential problems before they become roadblocks. It's about what knowledge we possess and how we apply that knowledge to help our clients. No computer model can replace that.

What I love as much as the "high commissions" is the benefits; the employer paid health insurance, the paid 3 week vacations, the free secretarial support, the employer 401K contributions, the easy credit access and more.

Would have helped me to read down further...I was thinking I was going blind because I didn't see a video link anywhere and the first few comments mentioned it. I thought I was losing it there for a minute...

Well at least you didn't post that naked computer guy picture again. Now that would have been distracting!

Good always sells regardless of the model. I am often thankful for my counseling degree because a few of my clients...well...they could use a little couch time. Agents that have value can sell their compensation plan. Agents that don't well...we all rant about them here on AR...

Bryant, I am eagerly awaiting the responses. This is a great post that will help agents identify what they do well and also what they could do differently in areas they might be missing that they might not have though about. I like it a bunch!

Bryant,

I have had the toughest week of my real estate career. If my buyer had not used me as an agent, her escrow would have been cancelled several times this week. It's schedule to close Monday and we'll see. I was on the phone getting people to follow through with what we needed them to do constantly, then throw in negotiating two short sales for sellers along with the standard stuff that goes on, and suffice it to say, I'm exhausted. I am a problem solver and that is what I bring to each and every transaction.

Fran

Ok...I understand you are going to be on the show. I commend you for coming on?

This question has been asked by many people many times and including none other than AR's resident dinosaur who chimes in with her wasted rhetoric (she will remain nameless in this comment but I am sure will be named on Monday)...the question remains.

I am sure that your main question will indeed be "What do you do to justify your your commission?"

So...on Monday we'll see if you can provide an answer to the question of the year...and an answer that you can and are willing to back up.

Should make for an interesting show indeed. Look forward to hearing it myself.

I also applaud you for trying to impart some resemblance of professionalism back into the real estate transaction and providing intangible value to a transaction. With the newly found transparency in real estate (which I don't think many in real estate truly understand) disintermediation is unavoidable and inevitable. Kudos for not trying to overvalue that which is indeed transparent like some here do.

BB - I could not stop reading your post and the 90 some comments from Nov. 06 (you right - it is one of the best post/comments) and my head off to all who participated. Do you still have contact to Mr. Candybags?

My commission is justified by Trust, Do Diligence, Relationship, Listening Skills, Communication, and Experience. We as Realtors(r) service our clients and must take the Code of Ethics serious.

By being stereotyped by consumers as money making machines, perhaps NAR and we as Realtors(r) should educate the public about our profession.

MAR

2008

"Perhaps NAR and we as Realtors(r) should educate the public about our profession"?????

C'mon people....wake up!! You are taking the public too lightly and yourselves too seriously. Bryant mentioned disintermediation. Look it up and understand it. Maybe then we'll stop reading all of these comments about how no one knows what you do. It's an absolute travesty!

Why not realize, that the public DOES know what you do, has little respect for it, and believes they can do better. Like Bryant's post here says, he is highlighting his intangibles. The actual value may be in that aspect. It certainly is not found in actual tasks as the industry is now transparent.

BB- your point about emotional needs is very valid. I would agree with you. Participants in a transaction often feel the need to have someone in their corner so to speak- while takes many professionals to bring a sale to fruition, having a representative by your side makes the process smoother.

First, its not just the commission percentage that is in question, it is what the commission % represents.

For instance, I'm in a house I bought for $342k in 2002 and it is now worth about $400k... My salary has gone up so I can afford some more house, so I'm interested in selling, but with commissions at 5% the commission represents almost 35% of the profit I have in the home. That is how I look at. The question for me is what does this agent do for me that justifies them taking 35% of the profit in my investment when they did not carry any of the risk of the investment. 35% of profit is a pretty hefty slice of the pie. Is the agent putting in $20,000 worth of "work"? I'm not so sure.

To be honest, I haven't been all that impressed with the agents I've had in the past where I felt I ended up doing most of the work anyway. I always said to myself "Geez, the do this everyday and they don't have any good advice?" (for instance, when buying and selling a home should we close on both the same day?, or even something as basic as what kind of check from the sale of the first one should be brought to the closing buy of the next one so that there is no problem.)

So, I'll probably just put an addition onto the house instead of buying which is too bad because it is a lost sale for an agent. If commissions were lower, houses would be a more liquid asset and likely to be bought and sold more often and more easily. Agents might make more $$ in that scenario than the current won.

Oh my gosh - it's a good thing I'm between novels right now - it will take me all week to get through these two posts!

Thanks for re-posting the old blog, BB. Us 'newbies' really appreciate it!

Brett Brett Brett....."AR's resident dinosaur who chimes in with her wasted rhetoric". Lenn certainly doesn't need me defending her as I"m sure she could care less what you have to say. Lenn has been in this business for decades and has closed well over a 1,000 transactions for 100s of mil worth of business. She fully understand what it is we do. Lenn is a highly respected Broker and has been on the Internet for more than a decade. One thing she isn't is "AR's resident dinosaur who chimes in with her wasted rhetoric" Lenn is a true Buyer's Broker and takes her fiduciary duties very serious. There needs to be more REALTORS(R) like her. Lenn conveys what we do by doing it. And that's what counts.

Your message, whatever it may be, would be much better received if you would concentrate on the topic and leave the personal attacks out of it. It's a cheap way to debate and shows a lack of intelligence. Whether you agree with the way she handles her business or not is really not relevant to the conversation. She has over 1,000 clients that have no complaints. Her record speaks for itself. What's yours?

Anyway, I personally talk to the consumer several times a day and by far the majority do NOT know what I do. Now maybe that's a reflection of the market that I'm in, maybe not. My market is working class folks that don't have the time to study up on what REALTORS(R) do. They are too busy making a living. So they hire me to help them.

Now I will agree there are many consumers that are quite capable of selling or buying without the assistance of a REALTOR(R). But I'm also positive they are in the minority. Most folks want or need help and are smart enough to seek it out.

Where the problem lies is that there are also many REALTORS(R) that don't know what they are doing and the consumer needs to be educated so they know the right questions to ask. But unfortunately most are only concerned about costs. If the consumer would shop ability instead of cost it would help weed out the less professional REALTORS(R) out there.

I too am looking forward to Mondays interview. The Barries seem to have it going on and I'm excited about talking with them. I will answer any questions asked freely and honestly. It should be fun. Who knows....maybe I'll learn something. Or better yet, maybe I'll teach something.

RRsafety, OK when you came back please give me a name. That's a shame you feel that way but I certainly understand. You need to have a good experience with a REALTOR(R) who knows what they are doing so you opinion can be changed. I agree completely that you should be able to get satisfactory answers to those very simple questions. A REALTOR(R) that can't provide that very basic advice should not be in the business. I feel your pain. I deal with incompetence every day and it truly pisses me off. That's the main reason my posts on ActiveRain are directed towards my peers. My goal is to change this industry one REALTOR(R) at a time. It's a daunting task but I truly hope I'm able to help someone.

Here's a thought for you. Most homes are sold through REALTORS(R) and therefore have the "cost" of the commission built into the value of the property. If commissions came down significantly it is my opinion that the properties values, over time, would come down by this same amount. This would effectively be a "wash" of property value-commission costs. While this is just my theory, I believe it to be true. Food for thought.

Jesse, Great response!!!

Jenn, Sorry for giving you homework:)

Allison, I spend more time "talking my sellers down" than I do anything else. It's a very time consuming task when in a declining market. BUT...it's the part of my job I enjoy the most.

Petra, I agree. Education is key. Now we just have to get NAR to understand how to do it.

Fran, It does sound like you have been busy. Don't you love it though?

Thanks Mark!!! I was hoping we could get a good conversation going here.

Melina, My thought has always been that if you are defending your fee then you are not building trust. I rarely get asked what I charge. By the time I get done talking with folks they are just ready to list no matter what my fee is. It's a non-issue.

Sorry Lenn!! I couldn't help myself.

Great information as usual! Keeps the information pipeline flowing. There are so many agents that need more information to educate themselves, so they can help their clients make the most informed decisions or at least give them options. You are great at doing just that, informing the real estate community about their options.

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Very concise and accurate! Helping home buyers and sellers is what we/I do; I don't take the responsibility lightly; I bring years of experience to the transaction - and it's HARD! No doubt you find it as frustrating (not to mention insulting) as I do when consumers fall for the line that anyone can do it - no experience, expertise, tools or time necessary. This article will help me repackage my presentation - thank you!

BB, wow I had a hard time logging on until today, not sure what he problem was but both in IE and FF. Anyway, our knowledge is what people pay us for, that can not be gained by listing a house or selling a house once or twice during your career. As Professionals we know how to evaluate the market conditions, recommend prices, price adjustsments, market the property, negotiate offers, negotiate inspections, negotiate with lenders on our clients behalf, how to present a house for sale, how to read title insurance.

This is one reason we have contracts, read them and follow them. We deal with issues on a daily basis, all the time and EVERY transaction is different. There are good Realtors and not so good Realtors, there are good appliance repair men and bad appliance repair men. That is life. Some transactions are easy and in this market most are hard work. We protect out clients from hear irate sellers or buyers and can deliver the facts in a professional, unemotional way.

We listen, we care, we become their friends, their trusted advisors. If I write anymore I will just go post. My commissions are not 'set in stone". I am flexable.

BB- Today is a perfect example. Took a relocation client out found a property that fit their needs perfectly in just under 5 hours and that included lunch (1 hour). They were able to make a decision as a result of solid guidance based on years experience, and they knew nothing about the area. He told me that he could not have done this without my help. I'm sorry I did not check in early cuz I missed the video.

Bryant--Funny how being a sincere friend in a sea of insincere business people can mean the world to someone. Most of my clients end up being my friends. Not surprising that yours do the same!

"Become a trusted advisor" Those words speak loud and clear. It is so important to really listen and HEAR what is being said. It is much too easy to ready to spew off an answer when what our clients want and deserve the most is careful contimplation and an honest reponse while offering the results that they ultimately need/want!

Thanks for the reminder

BB, the public doesn't care what you know, until they know you care. I agree with the thread here. We do work hard, but don't you just know that when clients work with you they know their transaction will be managed and handled in the most efficient - professional manner possible? That is worth something to the majority of the public.

Even in the busy market, it was not hard for me to defend my fees. I just told them you are paying me for years of experience, handling and managing things you never see to make your transaction as smooth as possible. That is what I get paid for!

Well hey there everyone. I have to say I'm happy this one got featured. I truly feel this is an important topic. So much so I reposted from almost a year and half ago.

I am looking forward to all the responses. Thank you!!!

Oops!!! I forgot to add. Remember we are talking to the consumer here. They are the ones asking "How do you justify your high commission?"

BB, You are so right. Houses may be our product, but building relationships is the heart of great real estate professionals! BTW, I thoroughly enjoy reading your blog!

BB,

I don't have to beg for it...I tell them what I do and how I do it well. If they aren't willing to work with me or do not want to pay me then they most certainly can go anywhere they want. I tell them like it is. I just got a listing and she even said..Neal I know you and I should have listed with you the first time. She decided on the lesser of two and lost 8 months of market time because she paid less and got less...meaning she was mislead and lost time...she would rather work with a live person instead of a robot with no feelings.

Amazing how everyone says how much money real estate agents are making yet they are leaving the business by the thousands.

You are dead on the money on this one. How we do it is the question.

This old dinasaur has a settlement on a home next week.

List price - $839,900
Contract price - $705,000
Adjusted contract price after inspection - $700,000 and a credit for $11,000.

Pursuant to the home inspection, my buyer is being credited $11,000 for a heat pump that the seller, in their Property Condition Disclosure Statement said was working, and a half point to buy down the interest rate because his lock expired while the seller argued and lost over the value of the heat pump.

Was the house worth $839,900? Probably. Was my buyer willing to pay it??? Indeed. It's a fabulous house. However, the "triggers" were there to do heavy negotiating and that's precisely what I did.

What are the "triggers" that said we could get a good deal?? That would take a book to explain and I'm still selling and not ready to spill all the beans. Some skills come only with experience.

I've got three settlements in the next 3 weeks with commissions totalling $54,000. However, I've saved my buyers about $310,000 on just over $2,100,000 in three contracts.

I earn my commissions.

It's because I'm so nice.

Let me play devil's advocate, are you saying that the Internet provides all the information that the average buyer or seller needs, and the only reason Realtors(R) tag along is to play armature psycologist without a license? It seems to me that this is the same "Old School" thinking that has displaced tens of thousands of stock brokers and travel agents. Travelocity, Priceline and on-line stock trading sites are a good indication that although flawed, Redfin has a better vision for the future of real estate than most of the rest of the NAR.

I was just about to park and wait for Lenn to come on in and tell it like it is. I see I can leave the engine running. YOU GO LENN!

Okay, so I read through every last bit of all of these threads and was almost certain that Candybaggage is an online discounter until he showed his human side. As we all know, the online discounter doesn't have a pulse when it comes to interaction with the consumer.

The value that Realtors, most of us at least, bring to the table is simple. We know what to look for, we know where to find it, we know how to negotiate it and we know what the solutions are when challenges arise. We DO indeed take risk. We risk our hard earned dollars to market properties that sellers suddenly decide aren't for sale after all. We risk our time in continuing education while the market could completely fall out as we head further into a recession. We risk that the seller wasn't completely truthful about the strange smell in the attic and our professional licenses are on the line as well as our livelihoods while the Super Bowl of litigation continues to spread across the industry.

Lack of intelligence...do you realize that you have had a bunch of comments here and NO ONE addresses the real issue...disintermediation? Yet, you say I am lacking...that's laughable.

Quite frankly, I haven't had to defend my commission in quite some time. Certainly not since the market changed.

Fulfilling my clients emotional needs. I never expressed it that way, but I now realize that is what I intuitively do. Thanks BB. This place does help me do my job better. I am always a calming force and a source of knowledge for my clients. By the third week they totally trust me. Plus, I am competent. I just talked to a woman and her last agent had poor photos, an incorrect property tax amount, and the wrong map coordinates. No wonder she had few showings! (And a high price. I'm still working on that.)

I have been a bookmarking fool lately. I loved this post. I liked the why you described what you did.

Bryant - I love this post and by the way, I read your original post on this topic as well. I try to do a little extra work for my clients, like do the county research on the home, make sure they understand the buying and selling process. However, I definitely agree with you. They need to have an agent who is going to be there through the thick and thin, be a good problem solver(because as we know, most deals are rarely a piece of cake) and to give our clients a good experience.

But even though buyers and sellers can get most of the info off the internet, I really do think that most don't really know what we do for them during the buying or selling process. We do a ton of work for each deal we're involved in but we also do things that indirectly benefits our clients (business operating costs, liability insurance, continuing education, building a good reputation among other local Realtors so they work with us on a deal, etc.). I think we should at least give our clients an itemized list so they know that we don't just add their home to the MLS and put up a sign. Or for our buyers, they need to see that we do more than just drive them around to find a house.

RRSafety - Sorry to hear that you are not happy with your agent's service. A good idea in the future is when interviewing agents your considering hiring to list your home, make sure you and the agent know what your expectations our for each other. And ask your agent to give you a list of what he/she plans on doing to sell your home. That way you know up front you can make sure that your agent does what he/she promises.

Brett... personal attacks aren't a debate of the issue...

Disintermediation. It is a great idea. Anyone here can jump on Google and in 15 minutes have all of the information that they need to weld two pieces of galvanized steel together. One trip to the welding supply store, and they can have all of the tools to do it.

They have the information, and they have the tools. What else do they need?

Sellers and buyers can find every piece of information that they need to buy or sell a home in just a few hours. The tools are there for the taking. Some of them are even free.

They have the tools and they have the information... what else do they need?

There are absolutely some consumers that are perfectly capable of selling or buying a home without enlisting the help of an agent. There are some consumers that are perfectly capable of welding two pieces of steel together correctly.

They don't have just the tools and the information, but the ability to DO SOMETHING with the information and the tools. They have experience. They understand how to interpret the data. They know how to efficiently use the tools.

For the ones that don't have the experience, or don't have enough, they can hire an agent. In other cases, it is cheaper to hire an agent to handle the transaction while they concentrate on their own business. I work with a lot of those people. One of my best clients makes about $2,000/hour with his businesses. Spending even 20 hours on a deal would cost $40,000... He'd rather spend that time having fun and pay me for it.

I can do my taxes. All of the tools and all of the information is there. It has been well disintermediated. But, it isn't worth it. I can make more money while having less stress by spending that time on my business while my accountant does my taxes.

Always enjoy reading your posts that are informative and interesting.

lane,

Lay off with the "personal attack inanity. Let's be real. The one you speak of is the one who levies attacks. Go back and read what she wrote BEFORE you start pointing fingers.

Now doctors and lawyers are bad enough..now you want to compare your self to welders? Unreal! Even they require more of an apprenticeship before becoming a realtor.

Lane...this forum is becoming tired and the sameness is stale. I don't have time for enduring the cheerleading. You keep believeing what you want, keep doing what you're doing and you'll keep getting what you're getting. If it is working for you then fine.

I for one, and those we speak to work based upon cold hard fact which seems to be irrefutable.

I have no desire to continue this dialogue on AR trying to show agents how change is better for the industry. I will reserve my focus for those who want to be around for the coming years and want to prosper. Not saying that you or anybody else won't..I just feel that MORE success will be lauded on an agent who is a Web 2.0 super agent.

If it is working for you...then don't change a thing. No one really needs to be on Google page 1 for Tucker real estate do they? Here's hoping you're right!

BB......We who work with buyers and sellers will continue to earn our money...Anyone who gets a deal done in this or any market with hair left on thier head deserves the money........I don't know who Brett is, but he should refrain from personal attacks here, and elsewhere...First we had Lance..and now Brett

As a lender, I feel that realtors most certainly earn their commissions and I don't understand why any one that is a good Realtor would offer their services at a discount. My husband (an appraiser) has seen some of the lending deals I've done, and when he makes way less per appraisal than I make per loan, he says the money isn't enough to do my job. And that's how I feel about Realtors, the money isn't enough for me to want to do your job!!!!

Cool BB. We're doing some follow up to the REALTOR value discussion that was sparked earlier this week by that Markwtwatch article. We're doing five things in a row on it... and will probably include a link to your great discussion here.

best

Very glad this discussion is on the table again. The concept of "high commission" is a relative one. Many will pay high prices for all sorts of things, a dinner at an exclusive restaurant, several hours in the air in a first class seat, a ring for a loved one about to become your spouse. The perception of value is always an intangible...that's where the true professionals in real estate soar above the competition...they understand this.

You have to show them that you care. Everything else they can get from so many different mediums out there.There are sellers who never hear from their agents thruout the listing period. It gives us all a bad name.

Expectations and preparation for any possible scenarios that could happen within a transaction. Knowing where and when to look to look for additional information. Pulling strings to get things done. Calm assurance that carries over to clients, listening, listening, listening to what the client needs or wants and then trying to make it happen.

MAR

2008

Bryant, Thank you for bringing back this core question. We answer this question every day, every minute of our practice. Consumer cares about the result and almost does not care how we technically organize our business, what techniques we use and how hard we work to make the transaction happen. Ironically, today's slow market gives us a big apparent "advantage" in justifying our fees to the consumers - the length of our work with the client. More time we invest - easier is to charge the fee, better we expose the insights of our job, better chance we have to show what we do and how we do it. Is it really advantageous to the client? Answer this question to those whose listings expired.

Disintermediation is a tricky trend for our profession. As it eliminates a value of previously closed property information, it creates an idea of easy savings on opportunity to DIY or on using the limited service providers. Does it kill our profession? NO! It opens us the chance to become a trusted advisors and professional consultants, skilled negotiators and knowledgeable coordinators. Add to this personal involvement and psychological support for educated clients and capitalize on these priceless skills.

WOW!!! Really awesome comments!! This has been a great discussion. And Kudos to Amanda for reading all 143 comments on the original post. I know that takes a lot of time to do. I hope whoever else took the time to do that....got something from it.

And Brett, My apologies for questioning your intelligence. That was uncalled for and I apologize. I was reacting to your statement about Lenn, who is a friend of mine, and it got away from me. I strongly disagree with the "presentation" of your thoughts but that certainly does not give me a reason to attack you back.

Thank you.

BB, I had a head start. When I first joined AR in August '07, I read every single one of your posts and I ALWAYS get something from it. :)

U R a Stand up guy Bryant!

Bryant, Wow!

And I think our favorite old dino mades a great point. Buyers don't seem to question our value, especially when we are able to negotiate a great deal for them. Sellers on the other hand, resent agents, at least the buyers' agents, for those negotiating skills. And in this market, even the best listing agent has a hard time pleasing a seller.

This is one of the best things I've seen on Active Rain - and the comments, most of them anyway, are as interesting as the post. Thanks for writing it! And you need to know that after I read the first couple of comments, I did a frantic search for the video - maybe you could put it back, please, please?

Bryant - as always, an excellent post! How we do what we do makes all the difference and keeps clients coming back to us (and referring their friends and relatives to us)!

Brett, Thanks. Now go read my most recent post. Hopefully......you will find it thought provoking.

Thanks Barabara-Jo!! I hope all is well with you.

Patricia, The video is over in my side bar. It was just a re-post of the "Obnoxious Broker" video. It's the one in the middle. You've probably seen it before. I am an exclusive listing broker and agree my job is very difficult right now. It's frustrating not to be able to sell a property no matter what I do. My market is at a stand still. 5 years worth of inventory on the market!!!

Amanda, That is an awesome compliment!! Thanks you.

MAR

2008

I wrote a whole post a few weeks ago about the never-ending commission debate. I truthfully don't feel we need to defend ourselves or our value, because the public does it for us. With 72% of sellers choosing to hire a full service real estate agent and pay commission...that action alone speaks for itself. :O)

"make sure you and the agent know what your expectations our for each other. And ask your agent to give you a list of what he/she plans on doing to sell your home. That way you know up front you can make sure that your agent does what he/she promises"

I don't think this is very helpful in choosing an agent. I've spoken to lots of agents and they basically all say the same thing about how they expect to move a property.

I'm looking for an agent to add value to my side of a deal. A chimp could sell my house today for $350k, but what I want is $400k. What I'm paying the agent for is that extra $50k.... the problem with the system is that the chimp would earn a commission of $17,500 and the agent would earn $20,000. It's not a good business model to be paid $2500 more than a chimp on a real estate deal.

A better system for a house like is to have an agent get 0% on the first $350,000 of the sale, but 50% of every dollar over $350,000. More complicated, but at least the difference would be chimp get s$0 and a good agent gets $25,000 on $400k sale.

RRsafety, I have to agree with you that it's not what they say, it's how they perform, that matters. If it were me I would want to see a list of their recent sales in my area. Not only do they have to be able to sell houses but they have to be able to do it in your area. Check their sales stats and compare listing prices to sold prices and also see how the sold prices compare to other homes that have been selling in your area.

I do want to mention though that no matter how good they are, a REALTOR(R) will not be able to sell a house for more than it's worth. Pricing is what sells a property no matter how extensive the marketing is. That's fact. Especially in this market where the buyer has many homes to choose from.

The reality is that "what you want" has nothing to do with the value.

Look at this way. If you have a visa card with a $20,000 limit and you "want" to buy something on it for $25,000, you out of luck. The card isn't just going to miraculously be "worth" $25,000. It is what it is. Your want will not affect the value of the card in anyway. Make sense?

MAR

2008

Being a "discounter" I thought you guys would appreciate my take on these things! Frankly, I think that commissions got out of hand. The basic idea of charging "X" percent across the board on homes just didn't make sense to me. Why should it cost a home seller 3 times as much to sell a $300,000 home as it does a $100,000 home? Is there 3 times as much work involved? Is there anything that you do to sell the more expensive home that you don't do for the lessor expensive home and if so, how much value does that add to the transaction.

The truth of the matter is that it's generally easier to sell the more expensive home because the buyers tend to be better qualified and in reality there is only so much that we as agents can do to sell a home. If the home is priced right (rrsafety, a listed home DOES generally bring more money than a home that isn't listed because it's exposed to a much broader market and the agent does bring value to the transaction for all of the other services that they perform - as Bryant pointed out in his post) and is properly exposed to the market it will sell.

The funny thing about being in my position is that I have to "sell" my program against what I refer to as "no-service" companies (MLS Only companies) all the time. In order to do so, I have the seller do a Ben Franklin test where they draw a line down the middle of a piece of paper and list out the advantages of each possibility on one side or the other.

The "no-service" company gets the nod on cost...I can't argue with only paying $299.00 to get put on my local MLS...that's a hell of a deal at first glance....but from that point on it's all me....

On an average transaction I'm usually a couple of grand more expensive than the MLS only companies, but I field the telephone calls...is that worth the $2,000 by itself? Nah, probably not, but it is worth something for most consumers who have jobs and other responsibilities.

I show the property....is that worth the extra $2,000? Again, by itself, maybe not...but I'm a somewhat disinterested third party who, through years of sales and communication training, can ask the hard questions and get real answers as to what the customer's objections really are. I've had people willing to walk on a house that met all of their criteria because the dining room was painted a weird color! In short, I as a professional real estate agent am better able to ascertain what the customer's objections are and to over-come them whereas on their own, a seller might have more difficulty doing this.

I help in contract negotiations....who hasn't had a seller dig their heels in over $500.00 on a $400,000 or more purchase? Part of my job is to sometimes hold your hand....to sometimes pat you on the back...or to sometimes give you a little bit of a shove...Is this worth the extra $2,000? You better believe it is! If you don't believe me, talk to a FSBO that walked from a deal over something trivial like $500.00 only to sit on the house for an extra 3 or 4 months!

My list goes on, but I hope that you see my point. If you're a traditional agent and you have to compete against me, it might come down to your sales ability to be able to convince the seller that you're worth the additional money that you charge over me. It happens all the time.

Bryant, again...an excellent post!

Bob Mitchell

ValueList Real Estate Services, Inc.

Great comment Bob. Wouldn't it be interesting if we did have the opportunity to compete for a listing? I think I could take you out :) But hey I think that about everybody. It would be interesting though.

MAR

2008

I read a great quote somewhere the other day that is perfect for this debate. "Only in the absence of value does price become an issue." I've heard it from a few others in this thread. If you are consistently being asked to justify your commission (value), you might take a look at how you are doing your business, and what you can do to qwell the concerns of the clients asking you to justify your commission. The best agents don't have to justify commissions, just like the best restaurants don't need to offer buy one get one free, and the best doctors and lawyers don't have empty offices.

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