The real estate industry is constantly changing. Many companies are trying to come up with innovative ways to capture a larger market share. In many other industries, a popular way to do this is to lower prices or discount your service. This is a method that my4walls some have tried to use in the real estate industry and has others very concerned. Here’s why I wouldn’t worry about it. There is an old saying; you get what you pay for and this is no different when it comes to real estate services. Many agents worry that discount brokerages will destroy the market as they know it and lose their income. But what you may not realize is that with those lowered prices comes a lowered level of service.
If you take the time to research discount brokerage agencies, you will see that they do not provide the same level of service as a full service agency. That is why they can discount it. It is not an “apples to apples” comparison. Some advertise one percent listings, but don’t tell you they don’t include the sales side of the commission. When you put it on the MLS, you should offer a commission to a cooperating broker if you expect someone to seriously consider showing the house. They usually have a growing scale that is very close to what everyone else is charging.
But let’s look at it from another perspective. I guess you’re in this to take a look. You are not just trying to make a quick buck and move on. The long term requires you to build relationships with your clients so that you can get their repeat business and referrals. When you close a house with a client, it should be the beginning of a relationship, not the end.
As long as there is some kind of business, there will always be someone trying to make it cheaper. However, I never recommend this as a trading strategy because any customer you get because of a low price will lose when there is a lower price. No loyalty, no relationship.
Walmart can do this because it offers the exact same products that you can buy elsewhere for less money. It would be foolish to spend more for them. However, in the real estate sector, the service you provide is exclusively yours, no one else can give you more than you. Your job as a real estate marketer is to show your clients why it is better for them to work with you than with someone else. You have to add more value to them, which translates into prices. Think of it this way. If everything people bought were cheap, we wouldn’t have so many different types of cars. We would only have the cheapest ones. But this is not so because people will pay more for a car if you give them a good reason to do so. The same applies to real estate services.