Information, Education Wins Clients,

Builds Loyalty for Real Estate Professionals

By David R. Walker

Southland Regional Association of Realtors

 

Every time the real estate market slows down a little or even when prices soar, some property owners figure they can save a few dollars by cutting out the most essential key to success -- professional help.

Research studies have found that an overwhelming majority of people who sold their home on their own later insisted that the headaches were too great and the process so complex that they insisted the next time they would use a real estate professional.

Once people understand that real estate is frustratingly complex, filled with pitfalls, rules, regulations, and innumerable legal booby-traps, they typically seek the protection and the service offered by a Realtor. It=s even more true today, in the age of Internet marketing, than at anytime in the past.

One study found that 25 percent of the people offering property "For Sale by Owner" readily admitted they knew very little about the selling process.

Fifty percent thought they had a good understanding of real estate, only to discover their shortcomings once they actually got underway.

The study found that the more a person started shuffling the hundreds of pieces of paper involved in a sale B in other words, the person who too late grasps the complexity of the process B the more likely they were to let a professional do the work.


Over 67 percent of those surveyed insisted they really did understand the process, yet nonetheless they insisted on consulting with a Realtor rather than attempt a sale on their own.

In short, the owners who go the FSBO B For Sale by Owner B route typically fail to realize how intricate the process can be. But FSBOs cited three primary reasons why they were reluctant to use a professional:

!       Most hoped to pocket the commission themselves, thus preserving equity. This group generally failed to realize that whenever buyers see a FSBO they are savvy enough to demand price concessions equal to or greater than the fees a Realtor may have earned;      

!       Owners also balked at paying a negotiated commission, thinking that the agent simply doesn't earn it;

!       And, they generally failed to understand the complexities of the home sales process.

The survey results suggested that Realtors must do a better job educating home sellers about the professional services an agent offers.

Rather than going to only one person, agents must educate people about how commissions pay for services provided by four groups -- the buyer and seller's agent and their respective real estate offices.

Many home sellers simply cannot understand that an agent receives only part of the fee. They need to be told that the listing office divides it with the selling office and both offices split the fee with the two agents.


The survey also found that the more a person knows about selling a home, the more likely they are to talk to more than one real estate agent before settling on one to handling the sale of their home.

Fully 33 percent of the people who said they know a lot about selling consulted two or more Realtors. Not surprisingly, only 11 percent of those who said they know nothing about selling consulted two or more brokers or agents.

While they may talk to more than one agent, the survey found a reason for real estate professionals to aggressively market their services. Among the 80 percent of the homeowners who went straight to a real estate firm to handle their sale, seven out of 10 listed with the first agent they talked to.

One seller in five from this group first tried to sell on their own. This was the group, the survey found, that was most likely to change agents at some point in the relationship.

Today's best real estate professionals are the ones who provide sellers and buyers with wheelbarrow loads of information. They take the time to explain their role of professional intermediary in what has become a very complex process.

The more information Realtors impart, the more sellers they will win as clients. In other words, where professionals B doctors, lawyers, and real estate professionals B once sought to baffle and dazzle clients with jargon and cryptic speech, today they must educate and inform if they want to survive and thrive.

This column is a service of the 11,800-member Southland Regional Association of Realtors, one of the nation’s largest local associations. Send questions to David R. Walker via e-mail to DavidR7944@aol.com.

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