Digital disruption, coupled with the rapid, ongoing evolution of the real estate industry and property market, has meant that today’s real estate agents – particular those operating with the so-called traditional commission-based fee model – have to contend with a host of new competitive challenges. In order to be consistently successful, they need to step up to meet these challenges with a whole new set of skills and deliver a value proposition which meets the demands of modern consumers.
The redefinition of the concept of ‘value’ is critical, as cost is now more and more becoming top of mind when making buying choices – ‘I want to know what I am paying for’, is a common refrain. As a result, it is imperative that estate agents are able to unequivocally answer this question – with those agents who cannot, running the risk of ultimately disappearing.
The fact is this is not a homogenous industry, in that the definition of service and value varies somewhat dramatically across the various property price bands, property types and, indeed, for different market and economic conditions and cycles. More simply put, different sellers have different needs.
Yes, we have the entry of so-called fixed-fee and hybrid agencies, and there’s certainly a place for those. But there is very definitely and will remain a place for professional, highly-skilled agents who can offer a ‘high tech/high touch’ consultative service before, during and after the transaction, ensuring absolute trust and peace of mind, couple with maximised property price realisation, thereby earning their commission. It is this redefinition of real estate service – moving from simply only a transactional service to that which is also experiential and relational – that will filter out the commoditisation that has for too long plagued the commission debate.
So, while there are sellers with simplistic transactional requirements who can work with more basic sales models such as fixed-fee services (particularly more towards the lower price ranges of approximately R2million and below), this choice needs to be governed by his/her appetite for risk because, quite simply, you get what you pay for. After all, it is quite likely that a real estate transaction more often than not comprises the sale of a seller’s most valuable asset and, contrary to public opinion, this is not a linear risk-free process – in fact, quite the contrary. It therefore makes sense that a transaction of this magnitude be entrusted to a professional consultant, who can strategically manage the transaction over a period of time of anything up to three months, which is the average time taken to sell a home, if not longer and, in so doing, mitigating the risk.
Agents who want to remain relevant in today’s highly competitive trading environment need to step out of a purely ‘sales’ mindset and think across a far broader spectrum of service than just the transactional market. By viewing their role more in terms of relationship and consultation, rather than only as salespeople, the opportunity to redefine the concept of value is significantly increased, this even before they begin to interact with the client, and way beyond the transaction, delivering value over the longer term. The traditional services of marketing and the supply of information are no longer the sole domain of value – the digital world has by-and-large eroded this hallowed ground and laid down the gauntlet to those agents who believe that this is their raison d’etre.
The requirement is now for a far more professional and strategic engagement with clients, with a multi-dimensional model of services, all with a view to properly managing this highly-valued asset on their behalf. These can simply be described as follows:
- Firstly, consultation – as opposed to the traditional hard-sell mentality so often adopted by estate agents when first engaging with a potential seller – this aims towards gaining a better understanding of the seller as to their needs. This is more of a ‘listening engagement’ than a ‘listing presentation’, where the agent shares wisdom and advice, rather than adopting a sales mentality in order to ‘get the mandate’, so as to better inform the decision-making process and the development of a sales strategy for the property.
- Pricing – with the above in mind, a critical and fundamental requirement at the outset of any sales strategy is to properly understand the current market cycle, the competitive context as far as other properties on the market are concerned and to not only look at history but also to model future trends in order to determine initial price. This pricing advice and discussion is fundamental to future success and overall client satisfaction through the subsequent transactional journey.
- Staging – advice as to ensuring the property is appropriately presented by considering and discussing what can be done to make it more attractive to buyers and, indeed, more sellable.
- Marketing – other than leveraging the standard industry marketing channels and platforms in order to maximise general reach of the market, the real differentiated value here resides in proper targeting of the ideal buyer segments in terms of identifying their propensity to purchase the seller’s particular home. This contributes to speed of transaction and, more importantly, maximum realised price.
- Negotiation – fundamentally, the ability to manage and ensure a positive outcome requires extremely astute people and negotiation skills, as this can be a protracted process of offers and counter offers, not to mention having to deal with numerous dependant conditions along the way.
- Transaction management – this refers primarily to efficiency and problem solving until closing and, indeed, until final handover and occupation.
- Communication – finally, service excellence and a uniquely professional experience can be defined by full transparency and consistency of communication throughout the real estate journey. Ironically, it is this aspect of estate agents that receives the most criticism from clients yet is something that is so simple to ensure.
Along with the above, the advent and role of the digital landscape in an omni-channel environment has enabled savvy agencies and agents to maximise their reach as well as their connection and engagement with both buyers and sellers.
Allowing us to develop powerful and discerning networks it has enabled us to communicate with relevance, providing informative and insightful content that is valuable to our buyers in empowering them to make sound buying decisions as well reach out to sellers – wherever they may be in their life stage.
It also enables us to shake off any geographic restraints and capitalise on selling opportunities on a far larger scale than ever before. Best of all, it’s measurable, which provides a powerful proposition for sellers as we are able to reach the greatest pool of discerning buyers and, in so doing, engage with sellers far more informatively and strategically as we progress with the sale of their property.
At this point in the evolution of the real estate industry globally and locally, the opportunities for the proper definition of value abound. It is an exciting crossroad for elevating our industry to higher levels of trust and respect. We should all be responding accordingly.