As we have written over our last two blogs, the real estate industry has two very different sales processes. But, calling them, “old versus new” would be too simplistic. A more apt differentiation would be “system-centric” versus “consumer-centric”.
Franchise sale models are designed to feed the franchise. Their system has created an infrastructure for the sole purpose of advancing itself. Unfortunately, the cost of this infrastructure is paid with homeowner equity. Listings at the traditional 6% ensure there is plenty of homeowner money to pass around in the form of “Buyer Commissions” and “Broker Incentives”. The pyramid must continue to grow.
Other than themselves, Agents using a “consumer-centric” approach don’t need to feed anyone. For the most part, they have no infrastructure. Their idea is simple. They run their own local businesses helping consumers of all types with their realty and home health needs. One on one.
The franchise scenario has the agent and its system in charge. Consumer-centric solutions allow the homeowner to actually drive the strategy. One system readily gives away homeowner equity. One system is designed to “protect” equity. Consumer-centric solutions, by charter, never give away a dime unless its part of the overall strategy worked out in advance with their home seller.
One HUGE takeaway from the Duffy Realty business model agents should be aware of is how Duffy plays both sides of this issue simultaneously. Their flat fee listing strategy is famous in Atlanta. On the buy side, Duffy takes the dated 6% system and makes it work for their clients. They actually share the “given away” Buyers commission with their clients. There can be no better example of a consumer-focused approach than this.
While noble, I question the need to publicly promote this position. If the Listing agent is lazy enough to throw out 3% of their client’s money, take it. You may share it with your buying clients, or you may not. No one is forcing your hand. Suggestion; if you are trying a consumer-focused approach for the first time, focus on saving the home seller money and go-along with the system on the buy side.
So now what? How does a consumer-focused, single agent approach, change the hearts and minds of the consumer? How can one agent take on generations of franchise tradition?
The problem with a lot of realtors is they view their peers as competition. And, in many ways they are. But, when you are an outlier or lone wolf, there are huge benefits to a “meeting of the minds” with those who have similar views and objectives.
The consumer-focused, menu approach to real estate can collectively be promoted by all those seeking a “new norm”. The franchises will be the first to tell you there is power and strength in numbers. There is no reason groups of consumer-focused agents and teams can’t band together with consistent messages and themes that move the ball of public opinion in their direction.
Common sense is on the side of the agent approach. Hold trade events, virtual and otherwise. Encourage other industry vendors to participate. Allow these vendors to add an additional layer of endorsement to the overall approach. Demonstrate clear differences. And, whatever you do, be sure to sell it with a GOP-level of fear and drama.
If you don’t think a hotel ballroom can be filled with messaging of a consumer-centric approach saving homeowners thousands, real estate may not be your thing. But, if you do believe in this message, embrace your fellow lone wolves and go to war against the system you are trying to overthrow.
To all agents working consumer-centric business models; you are NOT competitors with each other. Don’t forget your market share today represents mouse-turds. It won’t be until the consumer-focused approach reaches 35% market share or more until you see agents colliding against one another. The point is there is a lot of room to grow.
Study the Duffy Realty website. And don’t become discouraged. They have had 20 years to get their site in that condition. Why re-invent the wheel? Borrow, steal or plagiarize what you think works.
* Special thanks to Rhonda Duffy. This is the 3rd blog in a row we have used her Brokerage as an example. Considering we have not heard from her lawyers, she may not be aware. While we may have voiced a few differences of opinion, we are firmly on the side of her approach and will help others in that regard.