REALTORS: Defend Your Livelihood
Calling all REALTORS…
This past Sunday on CBS’s 60 Minutes, Leslie Stahl did a complete hatchet piece titled “Chipping Away At Realtors’ Six Percent” . In this piece they practically tear apart real estate professionals and in my opinion depicted them as greedy scam artists, preying upon consumers. I also believe it was more of in infomercial for the Redfin, a “non-traditional” real estate service provider, rather than a news story. But lately, you can’t expect anything less from 60 Minutes. To me they now amount to nothing more than a TV tabloid than REAL journalism.
I thought the entire piece was incredibly misleading, one-sided, obviously not well researched and really portrayed the industry in a bad light. The most alarming thing to me was the misleading theme Ms. Stahl was reporting throughout the piece that insinuated that all REALTORS charge a 6% commission rate across the board, starting with her title of her report. Those in the industry know that is not true and according to all industry rules and regulations is considered price fixing and violates federal anti-trust laws. Realtor commissions are different in every region, with every agent and are always negotiable. Ill-informed consumers that happened to watch this report do not know this. (Recently, CBS did add an editor’s note to the story saying that a VP of NAR informed them otherwise, but was not satisfactory to most.) This is just one of many un-truthful parts of this story that I had a problem with. But I think it was one of the most important points to address.
Stahl’s overlying theme in her report is that as housing prices have continued to go up but agent’s commission percentage has stayed the same. Stahl remarks. “You’re not lowering your commission to give the buyers this advantage. You’re just raking in the money?”If this doesn’t drive consumers to belive that Realtors are greedy, money-grubbing individuals, I don’t know what does. While heavily promoting Redfin and their practice of giving buyers commission rebates and flat fee rates to sellers (which I am not against, by the way), Stahl’s report barely touched on the other side of the story on how much work goes into what Realtors do to effectively market and sell properties. The agent highlighted at the beginning of the story, that had only done 4 hours of work to receive a $12,000 commission ought to be stripped of their license as they obviously weren’t fully serving their clients.
So what does this mean for you, the “traditional”, full-service real estate professional? This means that now more than ever, it is important to show your current and prospective clients the value of the services you provide. Consumers are now expecting you to justify your commission rate, whatever it may be.
You need your sellers to understand everything you do to effectively market their property and help them get top dollar for their property. From property photos, print ads, marketing materials (flyers, postcards, etc.), internet portals, single property website, Craig’s list ads, marketing their property takes considerable time and expense that they do not have to worry about while using a full-service professional. Not to mention how the legal fees they would save should something go wrong after the transaction.
You need your buyers to understand everything that goes into representing them in the transaction. You obviously do more than open up the property for them to see and then show up at the closing table looking pretty. Show them the value of your representation when you fully research prospective properties, prepare them for showings, writing up offers and contracts, negotiating with sellers, facilitating all the elements that take the transaction from contract to close.
Consumers are free to sell or buy home themselves or with a professional. It is full within their rights to do so. The #1 question in a consumer’s mind is “What is in it for me?” It is imperative to show them why they should choose to work with you, the real estate professional, and what is in it for them. Look at all your marketing materials, listing presentations and buyers books, and make sure you are highlighting the value of your professional services.
