“Why? Why are you doing that?”
Here we are, our 2nd week into 2019 and I have heard this question about 4 or 5 times already.
Again, as I was talking to my escrow rep and mentioned that I was changing my business model to a 1.5% Listing Fee. She replied, “Why? That will get a lot of real estate agents upset with you.”
First, let me say, what’s best for my clients will always take precedence with me. Having a good working relationship with other real estate agents is important, but what they charge their clients for their services is between them and their client.
I changed my business model because #1, I can. I own the company and I don’t need to have approval from my broker, or manager, or owner who will take part of the commission. And #2, because it’s the right thing to do.
Some of you may remember that I spent 25 years in the car business. I got paid when I sold a car. What made me different than other car salespeople is that I realized it was the client that paid me, not the dealership. Every day I negotiated was for the best interest of my clients.
It’s not about making a “home-run” on the sale of a car or home, it’s about gaining a client for life. I look at the long-term value of a client.
Let me tell you about a couple of clients I am working with right now (I am not using their real names since I have not asked permission yet):
- Sally – is the mother of Carla. I first met Carla when she was in her early 20’s and bought a new Camaro from me. She purchased several vehicles from me. When she got married, her husband Joe also became a client. A couple of years ago, I assisted Carla and Joe in selling their home. Last October, Carla called me when her mom (Sally) decided to sell her home. We just put Sally’s’ Bankers Hill home into escrow and we are now looking for her new home. Many car sales, and 3 real estate transactions (so far) from one client.
- Mary – was one of my first real estate clients. She was referred to me by another client who has referred many people to me over the years. Mary bought a condo in San Diego. A few years later she took a job in Escondido, so she turned that condo into a rental and bought a townhome in Escondido. We spoke the other day about selling the Escondido townhome. That is 3 transactions (maybe a 4th) from 1 client who was in turn referred to me from another client.
- Yesterday, I met with a potential client to sell their home in La Mesa. He was referred to me from another client whom I helped purchase a home a couple of years ago.
Are you seeing a pattern here?
I was the top salesperson at the car dealership not because I tried to make the most money possible on every car sale, it was because I put more value into the long-term relationship with my clients.
Back to real estate:
Let me break this model down for clarity, when you list your home you (the seller) agree to pay a commission to both the listing side and the buyers side. Typically, that is now a total of 5% (2.5% to each). It used to be 6%!
If you have a $500,000 home at 5% you have agreed to pay a total of $25,000 in commissions with the listing agent getting $12,500 and the buyers’ agent getting $12,500.
With my new 1.5% Listing Fee model – I (listing agent) have reduced that part of the commission to $7,500 giving my client a savings of 5,000 dollars!
That is a huge savings for my clients.
My business model has always been to treat my clients with respect and with 100% transparency, in return for a fair compensation. If I meet and exceed their expectations, they will return when they are ready for their next transaction and send me their friends and family.
For me it’s about the long game.
It’s true, I may not win a popularity contest among other agents. But, I am not working for them. I am working for YOU, my clients.
It’s not about money, it’s about legacy.
Want More Information about Our 1.5% Listing Fee ===> CLICK HERE