Pricing strategies to prove an agent’s value

by Olivia D'Orazio04 Mar 2015
With cut commissions, rebate programs, and other pricing strategies taking over the market, traditional agents are pointing to their intact rates – and happy clientele – as proof of their value-added services.
 
“A lot of agents were struggling the last couple of years, so they started dropping their commission rates to get more work,” writes Lorne Deschamps in the REP forum. “But what they did was show the public that our profession is not worth the fee. This is completely incorrect; we are educated and have a very big responsibility, taking care of the selling or buying of a new real estate property.”
 
Indeed, those agents who follow a more traditional commission-based payment structure argued that those sales reps who take their responsibilities seriously are worth the high cost that comes with homeownership.
 
“Hard-working [agents] will always offer a superior service, justifying their fees,” writes a commentator called Rick in the REP forum. “At the end of the day it will have virtually no impact on the current business model.”
 
Michael, another partly anonymous commenter in the forum, said his brokerage has been successful for the last 40 years, working largely with repeat and referral customers. He attributes that success to the services he and his agents are able to offer because of their fees.
 
“I don't have a problem with realtors performing work at lower rates, even at zero commission, if that is what they think their services are worth,” he writes. “When agents are advertising ridiculous low or zero commission, they should also make it clear what their services include or do not include.”
 

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