How to Compete as Redfin Lowers Their Listing Fees

How to Compete as Redfin Lowers Their Listing FeesRedfin recently rolled out an initiative to drop their listing fees, significantly undercutting the average listing fee. The company tested the strategy in major markets, such as Washington D.C., Seattle, Chicago, Denver, and San Diego and, not surprisingly, saw a substantial increase in business. In many of these markets, the typical listing fees are around 2.5 percent, yet Redfin has lowered their fee to 1 or 1.5 percent. Redfin has claimed that their listing count has grown in every market where they’ve dropped their listing fee.

The new low-fee strategy is spreading into residential real estate, which is leaving many brokerages concerned about how they’ll compete. Lower listing fees will put pressure on your pricing, which is painful in an industry with already dwindling margins.

The pricing conversation

The first step is to coach your agents on how to handle the pricing conversation. While a low listing fee will, in theory, save the seller a decent chunk of change, in reality, it’s important for any consumer to look at the whole picture when making a decision. When agents educate their client, buyers and sellers better understand exactly what these low listing fees mean for them, and how they can shop around to ensure they get the experience they’re looking for.

Provide support to your office managers in coaching agents throughout your brokerage to have these conversations, putting your brokerages’ value proposition front and center, regardless of a high or low listing fee.

Focus on the sphere

An agent’s sphere of influence is their key to success in such a competitive market.

If the competitive factor is listing fees, get your agents to rely less on new, unfamiliar leads. Why? Those leads are more likely to shop based on price, whereas those leads who already have a relationship with your brokerage are more likely to shop based on familiarity and trust. When agents focus on maintaining their sphere of influence to encourage repeat and referral business, they no longer face the direct competition that they would with paid leads.

All Moxi Works tools are built to accompany a sphere selling methodology. We’ve seen that when agents have productivity tools that align with their sales goals and methodology, they find long-term success. If contacts are nurtured and relationships are upheld, the decision is no longer about a one percent listing fee difference – it’s about trust and professionalism.

There’s no doubt that Redfin will continue to find success due to their unique low fees, however, that doesn’t mean that price cutting is the only strategy. Work with your managers and agents to ensure they’re armed with the tools they need to remain competitive.

Posted on September 26, 2017 at 4:09 pm
Tam Nguyen | Category: Productivity | Tagged , , , ,

Turbocharging Agent Productivity to Increase Profits

How does agent productivity affect your bottom line? It seems obvious that if your staff is more efficient, the business will be more profitable. Yet, agent productivity is rarely a main consideration when big decisions are being made for a brokerage, such as which technology solutions to adopt. 

windermere real estate

Windermere Real Estate has experienced this correlation first-hand. For far too long, they suffered from ‘shiny tool syndrome’ which was disruptive, inefficient, and caused a lack of cohesion across their organization. When the organization shifted to focus on a sphere selling methodology and put a fully integrated, flexible open platform in place, things changed. Five years ago, Windermere did approximately 60,000 transactions with 6,000 agents. Last year, they handled 83,000 transactions with 6,500 agents.

So… focusing on agent productivity and seeing the average agent increase their annual sides from 10 to 12.8? Not bad for your brokerage profits and growth, but how do you get there? It can be difficult to track the ROI of productivity, so we decided to break down how agent productivity and brokerage profits are interconnected. 

brokerage profits

Agents can focus on the things that matter

What happens when effective productivity tools are in place is that people have the ability to rely on those tools for the things that make them unproductive. Traditionally, agents are juggling hundreds of little tasks at a given time, trying to maintain relationships with their clients post-sale, trying desperately to acquire new leads, planning open houses and completing transactions, and much, much more. The home sale process has a lot of moving parts, so when a defined process is in place, it relieves the agent from unnecessary stress. Agents spend less time on busy work such as data entry, transaction management, managing their schedule, and client research, and more time developing relationships and closing deals.

Revenue increases

Brokerages that have adopted the sphere methodology understand the importance of building strong long-term relationships. Agents need the unique ability to be able to nurture relationships with clients over a long-term period of time to stay relevant in between home sales and gain referrals. With the right systems in place that focus on productively nurturing these relationships, agents can maintain routine touchpoints with their clients in the long-run. What does this result in? High quality referral leads, repeat clients, and easy sales.

Agent recruiting and retention improves

We all know that turnover is expensive. Agents are quick to make the switch from one brokerage to another given the right reason. Work/life balance is a priority for agents, which means productivity is key. The more productive agents are, the better balanced their life is, and the more money they’re making. Providing tools that allow your agents to reach a balanced, lucrative workflow will, in turn, improve your brokerage profitability. Take a manager dashboard, for example. Agents feel more supported, because managers have a level of visibility and become aware of coaching opportunities as they arise rather than after the fact. When agents are used to using a system that makes their business operate more smoothly, they’re less likely to leave. Happy agents make successful brokerages.

As a productivity tool provider, we live and breathe this stuff. Our goal with the Moxi Cloud is to improve margins for brokerages by leveraging technology.

So, what should you do? Take a step back and look at your business critically. Ask yourself what the three major pain points are for your brokerage right now and think about whether they’re linked to productivity and, if so, how brokerage profits might be getting affected.

 

 
Posted on August 4, 2017 at 4:37 pm
Tam Nguyen | Category: Open Platform | Tagged , , , , ,