If you could start over from scratch and recreate the trade of a real estate agent, what would you do?
First off; forget everything you have learned about traditional real estate sales. As an agent, never put yourself first and always remember to assess the situation from the lens of the consumer. Stand in their shoes.
Person A wants to sell, Person B wants to buy. The real estate agent is in the middle figuring out how to make money off it. Making Person A “pay” for everybody else is just plain dumb. Just because we have sold real estate this way for the last 60 years doesn’t make it smart. It’s still dumb.
In our last Blog we highlighted the situation agents find themselves in. Everyday agents speak to people who are in a hurry to spend money. And it’s not house sales we are talking about. While it varies wildly across the U.S., prepping a home for sale can cost between $4K to $10K. The average cost to prep a home for sale in Atlanta; $5,200.
Buying a new home is just the start of a homeowner’s relationship with Home Depot. But, in the short term, new buyers want to put their “stamp” on things and will spend on average $10K-$15 dollars to make that happen. You don’t have to be a genius in Sales to know realtors are well positioned in directing who some of that money could be spent on. As we have said before, realtors are natural “sales channels” for any significant home project.
This is why the; “I know a guy” concept could become a critical strategy to many agents. Say the magic phrase and watch tension leave your client’s body almost immediately. While navigating the world of contractors has gotten much better in the last five years, its still a significant hassle to the average consumer. They hate it. They’d rather let Angie pick someone.
Again, realtors are well-positioned. Everybody knows realtors NEED referrals. Laws of survival say realtors would never recommend a contractor that would hurt their long-term referral chances. Ergo, contractors recommended by local realtors are probably pretty good. Move over Angie.
Seeing The Forrest Through the Trees
Every agent selling in Georgia should know an Arborist/Tree Guy. Tree service is a great example of how a realtor/contractor relationship could work to the benefit of everyone. Consumers don’t know the tree market. The market itself is vague and a bit of moving target. Prices vary wildly. What is really needed? Who can you trust? Realtors can help here.
Now pretend you are a new Arborist company. How can you get business fast? How about calling a realtor and offering 20% sales commissions on all new orders? A thousand realtors become the sales channel to a million trees! It would be silly not to offer realtors financial incentives. (Fully disclosed to all involved of course)
The tree market is easy example of where agents can make money because the price points seem well padded. But this strategy applies to virtual every home-related service. Nobody likes getting ripped off, we are all just looking for a “fair” deal. This is why Angie’s List, and a host of online review sites initial caught on. BUT, as online truth continues to decline, where will the consumer turn? The safe bet would be to rely on the person whose “actual” livelihood DEPENDS on positive results.
The best advice on how to make money is to forget about making money. Focus on the structure of a business model. “Build it and they will come”; great movie line but also true. A good business model, promoted property, will attract. You can fine tune the money aspect later. But know this, financially a good “middleman” is rarely noticed.
Consumers don’t mind paying a small tip; “To Insure Promptness” But there is a limit, meaning most of the money generated from this strategy will come from tradesmen discounts. And they will be the first to tell you they don’t have much to spare. So how can this market be anything more than “chump change”?
The idea is to turn this revenue into a critical component of the new agent era. In our next blog we will discuss an entirely new realtor business model whose core is driven by the advanced development of this,“chump change”.