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Agents have been urged to sharpen up their value proposition if they want to defeat the fee-cutting that is rife in the industry.
According to a recent REB poll, a majority of agents generally cut their fees – 47.5 per cent of respondents said they give a discount more than 75 per cent of the time, while 51-75 per cent said they give a discount 5 per cent of the time.
Another 5.5 per cent said they lower their commission 25-50 per cent of the time, 26.5 per cent said they do it 1-25 per cent of the time and 15.5 per cent said they never cut their fee.
Marshall White Boroondara agent Zali Reynolds, who placed 45th in this year’s Top 100 Agents ranking, said she gets challenged about her fees on most appointments, but that a good agent should be able to overcome objections.
“I think it’s only a difficult part about being an agent if you’re not fully prepared,” she told REB.
“If you have good knowledge of the area you’re in and you’ve got all your statistics and you’re prepared, then I don’t think it’s a difficult thing.”
Ms Reynolds said vendors have a justifiable desire to know what services they’ll receive in return for their commission and to ensure that they don’t overpay for those services.
Agents can protect their fee if they’re able to clearly explain the value they will offer in terms of marketing strategy, market knowledge, customer service and access to buyers, she added.
Industry coach Peter Gilchrist said the best way for agents to stop vendors challenging their fees is to warm them up well before the listing presentation.
Mr Gilchrist told REB that agents are less likely to get fee objections when they’re contacted by people on their database – provided those old buyers and sellers have been nurtured with regular phone calls and intelligent marketing.
“Somebody who rings you from your database is already pre-qualified, they already know you and like you, and they know what you’re talking about,” he said.
Mr Gilchrist said agents also need to be able to establish their “strategic advantage” during a listing presentation in a way that doesn't involve cutting fees.
However, many agents struggle to differentiate themselves from their local rivals, according to Mr Gilchrist.
“A good exercise for managers to do is to ring from somebody else’s phone during the day and say, ‘Hi, I’ve got a house to list and I’m ringing four agents. Why should I list with you?’ Just see the drivel you get back,” he said.
[Related: James Tostevin reveals how to hold firm on commissions]
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