Commentary by Tom Kunz, Executive Vice President, Coaching & Accountability, Engel & Völkers Americas
Control the listing, control the market. This concept is an industry fundamental. While this remains true, why discount the opportunity to make more money on the deal?
Representing the listing is what costs real estate professionals the most financially, versus being solely a buyer's agent. A listing agent first creates assets to win the business. Then, when you earn the listing, your costs are put into place to dedicate the appropriate resources to promote and market the property. Imagine offsetting these marketing costs and increasing your pure profit by finding the buyer for the property, as well. After all, aside from the seller, who knows this property better than you?
Breaking Down the Numbers
Whether an individual agent or broker, the following equation remains true. Divide your gross closed commission for the month by the total sides of business you conducted for the month. That produces a unit value, meaning it provides a monetary worth to each side of business you conducted. Then, take a look at the listings sold where someone else or another company brought in the buyer. If you multiply that number by the unit value and split it by the average commission, it provides a pool of money that was technically left on the table.
Taking on Both Sides
As the listing agent, it's important to make moves quickly and in the best interest of your client upon signing the listing agreement. Part of that includes finding the right buyer for the property in a timely fashion. Identify the home's key factors, and check your database first for buyers who have specifically requested those items. If possible, connect with these potential buyers within the first 2-3 days, before the MLS requires you to list the property. This reinforces your value to buyer clients and demonstrates your immediate effectiveness to your seller. Of course, continue your efforts with targeted marketing strategies as needed.
As a broker, utilize regular sales meetings to encourage your agents to lift double-sided business for the brokerage. Start with sharing the pool of money you calculated as left on the table. First ask, "Who could have used some of this extra money this month?" Follow this by asking, "Who has a new listing?" Have the agent stand up and speak to the listing. Then ask your agents, "Who has a buyer for that listing?" If no one raises their hand, the question is then, "Who is going to get a buyer for that listing?" Write that person's name down, and for the next month, hold them accountable to close it. This works for the reverse scenario, as well.
Collaboration, communication and accountability are vital in supporting your efforts to increase your double-sided business. Not only does this increase per-person productivity (PPP), revenue and profit, but also a sense of community and support within your brokerage.