By Mike Pallin Master Trainer and President of The Floyd Wickman Team
“If you can’t afford an attorney, one will be appointed to represent you…” -Miranda
There is a new and alarming trend in real estate, one which we should have seen coming, and one which most agents are utterly unprepared for.
The trend? Internet shoppers calling the listing agent directly to see a property and make an offer, thinking that will save them 3% off the purchase price. Buyers who are uneducated about the value of being represented by an agent, and uninterested in it.
We shop online. We buy online. It is more convenient. It saves time and, in many cases, money. Amazon.com has well over 200 million credit cards on file.
We have stopped going to bookstores and instead have become accustomed to buying books online, just ask Borders. We have become accustomed to buying or renting our music online, just ask iTunes. Amway customers and distributors are completely online.
When we buy a book or a song or a supplement, there’s not a lot of legal things to worry about. We are protected and represented by the government and market forces like reputation, just check in with Google or Angie.
But buying a house? Both sides need representation. Isn’t that why agency was created in the first place? You know, insuring fiduciary duty, due diligence, consumer protection and avoiding conflict of interest.
So now we have a generation of consumers accustomed to shopping and buying online, who see a house on Zillow (that is where they are going), and who call the listing agent to make an offer.
They say, “We don’t want to work with an agent.” They’ve been pre-approved online and they’re ready to go. They don’t want to meet with an agent to be qualified, select and look – to have their rights as a consumer explained and protected – to be represented in the negotiations – to navigate the increasing complexity and unpredictability of the transaction from contract to closing – to establish a strategic relationship with a trusted advisor.
The truth is, of course, they won’t save 3% by acting without a net. But they see the system we have and think they can game it that way.
The percentage of all real estate transactions that are Realtor-assisted has risen steadily over the past five years to over 90% last year. Fewer FSBO’s - that’s the trend. In fact, the founders of forsalebyowner.com, and byowner.com, both listed their personal residences with Realtors after unsuccessfully trying to sell by owner.
We are doing a good job of educating, advising and protecting our selling clients. Now it looks like we need to bring that same focus to educating, advising and protecting our buying clients.
Just like the best way to get listings is face-to-face, working effectively with buyers begins with a face-to-face appointment. Fortunately, Floyd gave us the dialogue and technique that will cause the buyer to want to get together face-to-face, with the right attitude, to be qualified, select and look.
It takes the skillful use of dialogue and technique to convert inquiries into appointments, to convert appointments into agencies, to convert agencies into showing and offers, and offers into closings.
Yes, technology has changed how we do things like shopping and buying, but our clients still shop and buy. The internet has caused and will continue to cause big changes in how we do things and how our clients do things. Be on the lookout for these trends and sharpen your selling skills to deal with them.