WITH BUYERS TO UNLOCK THE SALES FEE
buyers have gone full circle
Well Priced and well Marketed Listings may be market control, but
buyers are the catalyst to unlock the sale.
Only recently I was talking with some real estate practitioners who
like me were selling houses 20 years ago. It all seemed so simple
then. 50% of the fee for selling a house. No listing fee, no open
homes and very few exclusive listings and auctions. Yes it was simpler
but so inefficient. Things needed to change.
Let me explain that.
You could spend some weeks working with a contact who was contemplating
selling. Eventually they would list with you and a colleague could
sell it within days and your share of the fee was zero.
You could invest days with buyers who when they purchased could easily
exclude you. That part hasnt changed.
In those days the only way to earn any fee was to work buyers closely.
Always searching for new listings, and then urgently getting your
buyers through. Each day we were sorting through our list of buyer
contacts and making a multitude of phone calls to keep in touch and
see who we could get looking today. Any training in those days was
about how to handle buyers and close the sale. Yes we were quick with
buyers and whilst you could make plenty of sales there was inefficiency
inherent in the system. You had no control and therefore no certainty
Then the big changes started.
The first step was the introduction of the 90-day Sole/Exclusive Agency
in the very early 1980s. With that came the introduction of
a split in the selling fee. At last the lister of the property got
some reward. A selling fee of 30% and listing fee of 20% were introduced.
That caused such a stir that some salespeople left these innovative
companies and went to work in traditional style offices. They didnt
At last some one was responsible for managing the listing and providing
the seller with some real service.
And what followed were several years of highly intensive training
and strategizing to control the market by securing the most stock.
This of course lead to the explosion in salespeople numbers as offices
built up team numbers to enable more listings to be managed by the
office. There was a saying; If you havent got it listed
you cant sell it.
With this strategy came Open Homes and buyers were delegated in importance,
as control of saleable stock was the number one strategy. Buyers were
asked to attend open homes and I clearly remember several sales people
proudly boast that they never put buyers in their cars. Its now up
to the buyers to find the homes they were marketing.
My the pendulum had certainly swung.
There is no doubt that this strategy worked handsomely whilst the
market was highly active and buyers were competing for the properties.
The period through the late 1980s and the middle 1990s
suited this approach. Buyers were easy to come by and buying a home
was a national hobby.
But the market changed over the last 2 or 3 years and the buyers have
changed their approach.
Firstly they no longer need the agent to find out what is for sale.
They have as much access to whats for sale as the agent. Apart
from the huge volume of pictorial property publications (all sorted
on brand order to the frustration of the buyers), endless database
mail outs and then there is the internet as a source of listings.
This source enabled the buyer to sort through the available stock
and to eliminate agents before even making contact with them.
Secondly as buyer numbers have reduced over the last 2 or 3 years
those agents who read the change in the market made a higher level
of service available to buyers. That left even less buyers for those
agents who failed to read this change.
Suddenly there was again a need to have simple and effective system
for managing buyers. In many cases this has required a change in attitude.
Still I hear salespeople say, Buyers are liars. Not only
is this a terrible attitude to have in a competitive, customer focused
business, its also a defensive move to cover poor performance.
It really means, Some Salespeople are deaf.
If you havent already put the buyer back on a pedestal its
time to introduce some systems that enable you to service them professionally
and effectively, to ensure you are able to unlock the fee the listing
can provide to you.
LET'S LOOK AT THAT PROSPECT FROM A SALESPERSONS PERSPECTIVE.
Some companies leave the total management of each salespersons
buyers totally up to that salesperson. Now thats a great strategy
if that salesperson is making the office a substantial margin on its
desk cost. If not, I wonder what is going to change to make that salesperson
So the lowest form of buyer management is: The salesperson who continually
flicks back through diary pages looking for names and phone numbers
of the buyers they want to remember. These people are relying upon
a mental connection to be made between the diary clue
and the new listing or change in listing details. This is the easiest
way to loose valuable contacts and miss the opportunity to present
options to buyers.
The great danger for these salespeople is that unless they move with
great urgency and make the mental connection necessary they will be
beaten to the draw.
They are beaten by the salespeople who dont just possess the
urgency and passion for the business, but by those that have a simple
system for tracking and managing their buyer contacts. That may be
a simple card system, an alpha/price index in the back of their diary
or a simple computer database that logs all the buyer details and
At the top end this may be a Palm device with a direct
daily link to a database such as MS Outlook. This can be maintained
by the salesperson, their PA or the office administrator and updated
daily. It is then simply having the mindset to continually refer to
this database and make the mental connections between the properties
and these buyer contacts.
Your own database of contacts should contain your buyers as well.
Get this database big enough and buyers will come your way simply
from your regular mail outs. Especially if you can start to fund colour
brochure mail outs in a non-targeted way. I guess this is a time issue
as sorting at this point can be slow. It will get better as your use
of technology improves.
Another version still being used successfully is a simple Buyer log,
usually an A5 pad with a carbon copy for the office system. Buyer
details and record of inspections are entered, the top copy to the
salespersons Buyer folder and the carbon copy into the
office database for mailing labels, e-mails, brochure mailing lists
and management tracking of the salespersons activity and effectiveness.
Such systems have been around for years but are rarely used because
of the debate in some companies about the ownership and confidentiality
of the information. Those that have conquered this situation and got
an office system that backs up the salespeople are generally gaining
an edge over those that havent.
The uppermost level is the salesperson that has not waited for their
management and who has gone ahead with major Internet promotion. This
enables them to capture buyers who log in and add them
to a reactive database. In other words, a buyer can visit your site
and request further updates by leaving their e-mail address. Cost
effective and simple this enables these sales people to quickly inform
a huge pool of prospects of new listings, price changes and potential
AND FROM THE OFFICES POINT OF VIEW?
In its simplest form the great manager has a weekly task of reviewing
with each of their team their pool of buyers and the actions being
taken to close a sale.
This is made so easy if the salespeople provide to the office a copy
of each buyers details. Somewhat labour intensive you might
say. Well yes there are easier ways, but without the latest technological
developments you will find this will boost sales simply because you
find out what is and isnt happening to the clients your business
Imagine having all salespeople put all their buyer contacts into a
central office database. It might mean a degree of buyer ownership
has to go with it as salespeople may feel their business is at risk
if their competing colleagues have access to their contacts.
There may be a greater benefit to the company and the team by knowing
and tracking all contacts than living in the environment of distrust
and secrecy so often found.
Now put all these contacts and the listings database into the one
pool. What can happen, if managed correctly, is that this database
will do its own sorting and either communicate with the buyer directly
or advise the salesperson to make the connection. And give management
a list so they can follow up.
There is however some other obvious methods to operate now without
waiting for the above technologies to arrive in your office (And they
Make sure that all the buyers your salespeople are dealing with are
communicated with regularly and kept up to date with listing details.
1. Mail your weekly list of open homes to current active buyers.
2. Mail brochures on selected new properties to the matching buyers
3. Institute a total database of all buyers in the property listing
system and run a match every time a new listing comes in. Then make
it an office function to ring all the matches on behalf of their registering
salesperson. No attempt is made to capture this buyer away from their
registering salesperson but if there is any interest in an inspection
then the salesperson is advised to call and make an appointment. This
prevents Buyer Slippage. This occurs when the salesperson
handling the buyer fails to make the mental connection between the
buyer and the new property or the price adjustment.
So why is it that many companies have no buyer management or tracking
Is it because they have taken the view that buyers are no ones
property? This lack of buyer ownership (Or protection you might say)
has maybe contributed to a lack of commitment to manage the buyers
better. Look at the effort, which goes into managing the listings!
Thats as it should be, but we see so much effort go into listings
that will never sell. Why not be more selective with these and use
the spare effort to provide a greater level of service to those buyers
who are currently surfing the market.
Spend some time too up skilling our teams on how to qualify buyers,
the art of showing a home and the skills in closing the sale. So much
of the industrys, and its vendors money, is spent on marketing,
the very least we can do is to make sure that the responses to that
marketing are managed with skill and urgency. The contacts we make
and manage correctly can not only make us a sale one day, but if the
relationship is developed professionally can provide us with those
precious referrals that make the difference between an average or
great career in real estate.
So get your buyers flying business class again. Or is it time to create
a Client who deserves the very best in service whether
they are seller or buyer.