The Future of Full Service Real Estate! Is Anyone Listening??

By
Real Estate Agent with Sierra Vista Realty

HelloWith the rise of the discount real estate service companies, we have to be better than we were 5 years ago, even a year ago! We use the term "Full service", but do we provide it?

I keep hearing some real-estate agents complaining about discount brokers taking a bite out of the real-estate market and they are worried that Web companies like Redfin and Zillow will, for some buyers and sellers, eliminate the need for a full-service agent.

Full service real estate services are about more than a commission, it is about treating clients like a member of the family and not just a number. Our commitment must go beyondjust answering our phone, putting a sign in a yard and looking up houses on the MLS.

Successful agents fundamentally and ultimately understand that success is based on human relationships and personal connection that a discount firm or an on-line company cannot offer.

We can and need to be more personable, which is the most effective way of building a loyal customer base and growing our business rather than loose it to discount firms. As a business problem, the issue gets down to this: If our clients cannot get individualized service from you, they will go to a discount firm. 

Our future depends on customized and professional service. A useful metaphor is clothing. Would you prefer an "off the rack," or a tailored suit? Some folks can buy clothing off the rack that fits fine, but most people look best with fitted clothing, even if the modifications are slight.

Off the rack is serviceable, but not desirable. It lacks style. It lacks elegance. It is comfortable only in a diffuse, unrestrained way. You'd wear one if you had to, but only if there were no alternative. But when it comes to that suit made to fit you exactly, it not only looks great, but it feels great. There's something comforting about a snug, custom fit. It doesn't have to be extreme to give you a sense of well-being.

Real Estate should work the same way. Every client wants you to "tailor" your service to fit them. You can't just trot out the same routine for every client!

Just some thoughts.

Brad Snyder - "The 45 Day REALTOR"
www.45DayListings.com 

EDIT: Paul Silver made some great comments and insights on this post and in his own post (Discount Brokers, Full Service Brokers, Limited Service Brokers... what is all the fuss?) I would reccomend you also read his post. I would now change my use of the word "Discount" to "Limited Service".

Thanks Paul!

Brad Snyder

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Rainmaker
238,351
Brad Snyder
Sierra Vista Realty - Sierra Vista, AZ

Thanks to all the AR comments! This is a post I felt very passionate about and it is great to hear the feedback, good and bad.

Thanks again everyone!!!!!!!

Brad Snyder - "The 45 Day REALTOR"
www.45DayListings.com

Sep 14, 2007 09:00 AM #22
Rainer
2,937
Connie Cagle
Inactive - Hampton, GA

Great customer service is, and will always be, the solid foundation that any successful business is built on.

Sep 14, 2007 10:10 AM #23
Rainer
26,246
Mike Lefton
Troop Real Estate Wood Ranch Realtor,Relocation - Simi Valley, CA
Simi Valley Real Estate,Simi, Realtor,Moorpark ,Troop Real Estate home
Nice Post , I am a Full Service Real Estate company and I charge a flat fee and I do offer Full Service. I treat every client like they are my only client. Work hard and it will pay off...
Sep 14, 2007 10:14 AM #24
Rainer
44,782
Marty Van Diest
Valley Market Real Estate - Wasilla, AK
Your Alaskan Realtor

As has been mentioned, we need to get away from the discounter/full-service dichotomy.

As an Accredited Consultant in Real Estate I helped someone yesterday for one hour and got paid for that one hour.  I also did a 3 hour Agent Open House for a commissioned listing. 

In my mind...Full Service is having the tools and expertise to do it all.  That includes hourly consultation, fee-for-service and commissioned sales.  I let my clients decide how to pay and how much to pay.  Most people choose commissioned sales because they know it's all free unless you produce.

But some people have different needs.  A Full Serivice Company can help them all. 

Sep 14, 2007 10:38 AM #25
Rainer
27,314
Drew Riley
Spa Realty, Inc Team Riley - Hot Springs, AR
Great post....we are highly paid professional for a reason....we get results.  In the end that is what it's all about.
Sep 14, 2007 10:59 AM #26
Rainmaker
1,390,952
Donna Harris
Donna Homes, PLR - Austin, TX
Realtor, CDPE & ASP - Hill Country Lakeway Austin
The discounters aren't doing as well as they were in the past and most agents have gone above and beyond with their fees.  My fees range from 6-8%, not from 3-5%.  I have to do more to get a house sold these days, so I should get compensated for that, not discounted...
Sep 14, 2007 11:05 AM #27
Rainmaker
351,634
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Broker

Customer service is what it is all about and like you say relationships, That is what I love about this business

Sep 14, 2007 12:14 PM #28
Anonymous
Anonymous
Quality not commodity.  That's the way to go!
Sep 14, 2007 12:16 PM #29
Rainer
3,517
Cameron Komando
Presidian - Tucson, AZ

Great post and two thumbs up on the featured post!!

Sep 14, 2007 02:16 PM #30
Rainmaker
138,568
Paul Silver
Focus Professionals, Inc. Rhode Island Real Estate - Newport, RI
Rhode Island full service real estate firm

I propose that when we talk service, we use the terms "Full Service" and "Limited Service" rather than the commission based terms... if we are going to use "discount" then we should use "full price" or some such... but then, as Lenn and others have commented, using commission based terms implies some sort of standard pricing level, which can then be discounted.

Lenn had a great discussion on her blog about talking commission, and I argued there, perhaps indirectly, that the fees we charge for our services may vary, without varying the level of service. For example, fee structures in most industries are based to some extent on costs of providing the service. Of course, they are also based on market pressures. One is a sort of bottom limit, the cost of providing the service, the other invokes a downward pressure on maximum profit. Somewhere in the middle is where we find our fees. People or companies that can reduce the cost of providing service, can charge less for the same service. Companies with higher overhead must charge more to make the same profit when providing the same service. Basic economics.

But then completely separate to this, is the actual level of service provided. If we assume all our overhead is the same, then the less expensive fee must be coming from reduced levels of service, all else being equal (which we all know it is not). So, we have limited service providers, and full service providers. Within those groups we have companies that have managed to reduce the costs associated with providing those levels of service. They can charge less for the same service and make the same profit.

I think your point here is that what differentiates one provider from another, is the quality and level of the service they provide. Within the limited service provider community, I am sure that some firms make more profit than others, and that some have lower overhead than others. The same is true of full service providers.

Is there a convincing argument that if you and I provide the same level of service, but you are able to reduce your cost associated with providing that service, and so you charge less than me, is that to say you are providing less than me? Of course not.

So yes, some firms provide less service, for less money. Some provide the same service for more money, and others are losing their shirts from too much overhead, regardless of the level of service. 

I want to be competitive in my market area, as I am sure you all do. If I can provide full service, with less overhead cost, and so reduce the cost of my service as compared to yours, then I can charge less than you and make the same money. I would be foolish not to do so, dont you think? 

Sep 14, 2007 02:17 PM #31
Rainer
42,740
JR Sangiuliano
CENTURY 21 JRS Realty - Clark, NJ
Great post-you are right in line with my thinking and I have some posts that are very similar in content to yours.  Very well said
Sep 14, 2007 02:22 PM #32
Rainmaker
238,351
Brad Snyder
Sierra Vista Realty - Sierra Vista, AZ

This has been a thought provoking post for me and I want to thank everyone, especially Paul Silver for the comments and insight. Paul made some great points and I would now use "limited service" in place of "discount Service". He makes some valid points in his comments above.

Thanks again!!!

Brad Snyder - "The 45 Day Listing REALTOR"
www.45DayListings.com

Sep 14, 2007 03:11 PM #33
Rainmaker
654,324
Fran Gaspari
Patriot Land Transfer, Inc. - Limerick, PA
"The Title Man" - Title Insurance - PA & NJ

Brad,

Nice post! I love to hear you realty agents debate these points. I'm a simple kind of guy. You get what you pay for, don't you! Thanks,   Fran

Sep 14, 2007 03:55 PM #34
Rainmaker
220,026
John MacArthur
Century 21 New Millennium - Washington, DC
Licensed Maryland/DC Realtor, Metro DC Homes
Brad - Good thoughts. I have always felt that this is a people to people business. I have avoided most marketing that is impersonal. If you treat people with respect, listen to what they say and attempt to accomplish what they ask.........you will stand out from the competition.
Sep 14, 2007 10:24 PM #35
Rainmaker
337,656
Gary Bolen
McCall Realty - South Lake Tahoe, CA
CRS - Lake Tahoe Real Estate Information

Right on Brad, full service is a family business. You get a 5 and congrats on the feature.

Best... 

Sep 14, 2007 10:48 PM #36
Rainmaker
212,593
Yvette Chisholm
Long & Foster Real Estate, Inc. - Rockville, MD
Associate Broker - Rockville, MD 301-758-9500
Go back to the basics...if you tour homes, talk to buyers and sellers, know the market, personal experience...it can't be replaced.  But if you don't bother to truly know your market and keep up on stats...well...then it choices rather than you can get everything with this agent.
Sep 14, 2007 11:18 PM #37
Rainer
29,376
Shari George
Coldwell Banker Tomlinson - Lewiston, ID

"Discounters" do very well here..I've often thought of joining the ranks!!  An agent can give good service, no matter the price.

Sep 14, 2007 11:44 PM #38
Rainmaker
93,355
Cindy Stys
Cindy Stys Equestrian & Country Properties, Ltd - Lehigh Valley, PA
The Premier Equine Realty Broker

 

Good point!  Has anyone read Commissions at Risk?  It's about more than discounters but rather companies which will "automate the entire transaction from cradle to grave".

The author also stresses how it's important to find a niche market (among other things) to prepare for the inevitable future of the way real estate transactions will occur. 

I am still on the fence about whether or not I fully buy into the author's predictions.

 

Sep 15, 2007 12:01 AM #39
Rainer
15,237
Suburban Chicago Illinois Real Estate
Suburban Village Realty - Barrington, IL

Brad,

Some great points are made and Paul Silver also makes some very good points. From my personal evaluations though, I have to agree with the last part of James Boyer's comments on this one.

Sep 15, 2007 06:48 PM #40
Rainmaker
299,758
Ryan Hukill - Edmond
ShowMeOKC Real Estate Pros of KW Elite - Edmond, OK
Realtor
Great post and great points. IMO, the discount and online brokers will never replace us. They just offer something different that some consumers want and some don't. I've had many discussions about this lately and I compare it to my own preferences. I choose to drive a little farther and pay a little more for my groceries at Target, rather than the Wal-Mart Supercenter that's about 1 mile from my home. Why? Because the stores are cleaner, the isles are wider, the products are often better quality and the service is superior. It's worth the extra money to me. It may not be for my neighbor, but my neighbor has different tastes than I do. 
Sep 15, 2007 11:37 PM #41
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