Who Created the Discount Real Estate Broker?
There is an unfortunate ignorance in the real estate industry that leads to an erroneous conclusion; discount brokers are evil … discount brokers are what’s wrong with this industry.
Let me first say, I’m a full service guy. A full commission guy.
I expect to pay handsomely for great service / great product. I expect value in return. Whether it’s the car I buy, the dealership from which I purchased, the coffee shop I frequent, or the gal who cuts my hair cut.
I also expect to be paid extremely well for the service and product I deliver AND I will always offer more in value than what I receive in compensation (Read The Go-Giver if you have not already).
The problem with the real estate industry IS NOT discount brokers. Yes, the majority of discount agents out there are not very good at what they do. And, consumers don’t understand that paying less for a “discount” often costs tens of thousands more in missed opportunity and mismanagement (details for another post). So, I do not subscribe to the discount broker model, in fact I despise it for the harm it generally does.
Want to know what does more harm and what I despise more?
Full commission brokers who provide a discount service.
The reason discount real estate brokers exist is; most full commission real estate brokers are terrible at what they do. Think about it. As a consumer, if you are going to receive marginal service, an unreliable outcome, and a less than pleasant experience, you want to pay a lot less for those results. We all do.
Full commission brokers providing a discount broker experience are the norm in real estate. Sadly, this experience is what consumers have learned to expect. And they expect to pay less.
To The Rescue:
Here is how we can differentiate ourselves. Here is how we can change this industry.
- Be exceptional. If you are an exceptional agent and add more value to the consumer than what you receive in payment, you are a champion to this industry and consumers will always appreciate what you do. You, my friend are a Full Service Broker.
- Learn to communicate your value, without judgment, without resentment of the consumer question; “will you do it for what the other guy will charge?” To which you might be thinking … “The Other guy!? That guy? He’s terrible! How can you even ask that? Do you know how hard I work!?” NO! NO, THEY DON’T and NO, THEY DON’T CARE. Consumers want to believe in results … and what they believe is the average. And the average sucks.
- Learn to appreciate consumers asking the question about your commission. Learn to look forward to it. Not because you are a great negotiator. Because you are so clear about the value you offer, the service you provide, the experience to which you are dedicated to creating.
- Learn that our industry incompetence has in fact trained consumers to expect so little. Learn that every time you do more than expected and deliver more in value than the compensation you receive, you restore a little faith, one person at a time in the value of what great people in this industry provide.
Don’t blame the discount broker. They are the inevitable existence of our industry incompetence.
So what do we do about industry incompetence?
Patiently educate consumers to demand more.
By Matt Hudson
Matt Hudson is a performance and business coach, founder and CEO of Colorado Home Realty and a passionate champion for excellence in the real estate industry.