I’m lucky to own and operate a business I absolutely love.
My company’s focus is simple: to help real estate agents and brokers transform their businesses.
This week I taught a new class, entitled “Get the Listing” to a sold-out room! Two of the core themes of our class were differentiating yourself from the competition, and being able to articulate your point of difference – not just in the words you use, but in the visual tools or “props” that you show at the listing presentation. We talked a lot about how “most agents” handle a listing appointment, and what you need to have to really win at listing presentations.
Of course, it’s not just at the listing presentation that you have to be confident in your value. That’s something that you need to carry with you throughout every part of your work life.
And really, it’s almost impossible to fully articulate your value unless you understand what your competition brings to the table.
Real estate is an extraordinarily competitive business. If you’re not prepared for competition, you’re not prepared to be in this business. It’s a sad fact that many of your competitors attract clients through discounted fees. Others will “buy” a listing by estimating a sales price that they (and you!) know isn’t realistic … but the seller is excited by the pie-in-the-sky number because they simply don’t know better.
How do you combat this? By understanding the total value the competition offers, and then articulating what you offer that creates better results or a better experience for your clients.
To do this, here’s what you need to know about the competition:
- Who are they?
- What company are they affiliated with, and what is the company’s reputation?
- What is the agent’s market share?
- What is the company’s market share?
- What is the agent’s list-to-sales price ratio?
- What is the agent’s average market time?
This information is relatively simple to gather from your local MLS. The other information you need to gather may take a little more work, but it is definitely worth it. Here’s what I want you to know about the competition:
- What certifications or designations have they earned, and is their business aligned with those designations?
- What is their marketing plan?
- What type of collateral or technology do they use?
- Do they have a niche market?
- How do they communicate their points of difference?
- Do they discount their commission?
In smaller markets, you may know exactly who you are competing with. But what happens if you work in a bigger market … or if you aren’t aware of who your competition might be?
This is where it’s so critical to know your own numbers, and the averages within your MLS. At the very least, you should have these pieces of data:
- Your average days-on-market time
- Your average list-to-sales price ratio
- Your company’s market share
- The average days-on-market time of all agents in your MLS
- The average list-to-sales price ratio of all agents in your MLS
- The market shares of all the companies in the geographic area of the home you want to list
Armed with this information, you have a point of reference for how your performance compares to the market in general.
There’s nothing wrong with living and working in a competitive environment. I believe that competition keeps you sharp, keeps you focused, and keeps you on top of your game.
And competitive doesn’t mean simply undercutting the competition. If you operate on a 6% commission plan and some of your competitors are at 5%, you have two choices: you can cut your commission to 5% … or you can articulate (and back up with results) why it’s appropriate that you charge 6%. If you don’t understand how the sum total of your offerings compares to the sum total of what your competitors offer, you’ll never be able to defend you 6% commission.
I’m actually shocked at how many agents are nervous about working in a competitive environment. I believe there are only a few reasons to be intimidated by competition:
- You don’t know what you competitor offers.
- You don’t understand your point of difference, and its value to your clients.
- You can’t defend your business model.
- You don’t measure – and can’t share – the results generated by your business model.
If you do the research I’ve suggested, you will be able to speak to what you do that is comparable to, better than, or perhaps completely different than your competition.
Remember – competition can be a good thing … if you’re prepared for it!