I’ve received more calls and emails from real estate agents in the last two months than in the previous two years describing all the listings they aren’t getting because other agents are offering much lower commission rates. Many of these callers are on the verge of panic trying to figure out what to do about it.

This is not a new challenge but it is an old challenge with new life. I believe there are three reasons this is happening currently:

1. Ratification of the agreement between CREA and the Competition Bureau last fall here in Canada.
Sellers can now get their homes on the MLS system with limited services and at much lower rates. Discount commission agents and companies will see an opportunity to grab some listings by competing on price…because they’re not strong enough to compete on value.

2. Consumers have trouble justifying the value of a real estate sales professional.
Generally speaking, consumers believe all real estate sales professionals do the same thing. Sellers think all they need to do is get their home on the MLS system and it will sell. You know as well as I do that this is certainly not the case—many sellers opting for the limited services and minimum commission are finding this out the hard way.

However, this is still the perception of the general public, and perception is a strong reality. Great sales people though, have the ability to educate their prospects as to the reality and their true chance of selling. Not all agents do the same thing, and they certainly produce substantially different results.

3. Consumers believe they know as much as a real estate sales professionals when it comes to buying or selling a home.
Let me rephrase that: The average person thinks they know more that most real estate sales professionals, and if they think they know more, they have trouble justifying an agent’s value.

Must of the value an agent brings to the market is the difference between what the consumer knows and what the agent communicates to them they don’t know. Sales professionals must be known for what it is they know, not what it is they sell.

The bottom line? For years, real estate sales professionals have been painfully weak at differentiating themselves and communicating their value so they resort to competing on price by lowering their fees. This creates a negative downward spiral for not only the industry but for consumers too who are left confused, disappointed, or even worse, short-changed on their biggest asset.

Why are most agents weak at differentiating themselves? Because they lack training, and that means they lack skill. Getting a real estate license and failing to develop your skills is like learning the rules of golf but never learning how to swing the club. Sad but true!

Want to learn how to deal with this problem? If you’re in the Vancouver area next week, join me for a powerful FREE 90 minute workshop on COMMISSION VS. VALUE | May 30th Langley | May 31st Vancouver | June 3rd Burnaby – Click HERE for more information or to register your complimentary seat now.

Until next time, make it count!

Richard