Dealing With Discount Brokerages
Ryan: Wondering how to compete with discount brokerages or Tinder style Realty models? Well, join us today. We're going to have special guest John Selby with Compass Real Estate in San Diego and we're going to tackle these issues and how to differentiate yourself and demonstrate value so you can serve the customers like you really need to. Join us in just a sec.
Ryan: I am here with John Selby from the Selby team at compass real estate in San Diego. John is in a community with me. So we associate a lot together and kind of trade secrets and I'm talking about these issues in depth that at conferences and whatnot. I thought you'd be a great person you have on this broadcast because you deal with, you know, kind of a higher end clientele what you say.
John: compared to other parts of the country. Yeah, we do. We tend to have a higher price point here in San Diego, which leads us to. It's considered a higher end. Absolutely. Yeah. Encompassing role. You know, you guys are full service, right, as, as are we, I'm a boutique obviously, but you know, uh, I thought that, you know, when you look at the different models, there's a lot of these disruptors entering our industry and way I look at it is that I see the market share is going to be taken on the lower end, right Because, you know, full service is always going to have its place on the higher end and in reality it shouldn't really take any service, any, any of our market share at all. It's just you're going to have some uneducated sellers out there, uneducated buyers. It really don't know what they're getting that, you know, and that's what I named this, these Tinder style apps because it looks really cool. But are, is that really serving the customer So, yeah, the first thing I talking about, well before we get into the tender style one, there's a company out there, national company, and not going to say their name, but they offer size these one percent listings. You and I were talking before we broadcast you, will you share your story about you have a client that you're working with and what happened with them
John: Yeah, yes. I currently have a client that their buyer, client of mine and they sold their house using a set set brokerage and um, and they just sold everything was, you know, everything closed. After the fact, you know, six months later went to go look for a full service brokerage, full service agent to work for them because they were just dissatisfied with sorts of aspects of it feeling like they never were in touch with the same person on a regular basis. They kind of had to get everybody up to speed every time they had a conversation with with them, you know, they were talking to a new person all the time so they just didn't feel like the hands on experience was there for them. From when they bought their house with a full service brokerage to go into a discount and now looking for a full service again, they really realize the benefits that they are getting by using somebody who really is full service and who is really hands on there for them.
Ryan: Yeah. And what's interesting about this particular model, and they're, they're everywhere. They're nationwide, they're salaried agents, right So is to, is the same kind of service that people get when they go to bank of America versus local top producing a mortgage lender. Right Right. Absolutely. You kind of get shuffled to the side. The person that takes your loan isn't going to be. And now this is not exclusive. I'm sure these companies have great people there, but there, there'll be in rather than the norm. Right. I know this is, if you google this company or go to a yell, the reviews just aren't there. Right. And what's happened with us, um, we had a listing and you know, we've had several listings where we had multiple offers. They vary. I don't know if they ever want to multiple offer on one of my listings just because if you look at the way that they should contract, it's just not there now. I will tell you this, I've worked with at fantastic agent or two in there in the past before, not in a multiple offer situation but on just a regular situation. But guess what Those guys don't stay there, you know, so they're going to get. Yeah, you go there to get.
John: And I've heard a lot of kids, I've talked to a lot of really good agents there and they go there and they're like, well I just, you know, I didn't know where to go. I had no experience. I was getting, you know, guaranteed income. I'm too nervous to go into like a full commission based brokerage. So I went there but I'm only going to be there for a year or two years and then I'm going to leave and my question back to them as well, everything that you built for the past two years or however many years you're there, you don't get to take any of that with you. It doesn't belong to you whatsoever. So you've got a knowledge and transactional based experience, but do you have a database anymore Do you have anything that's, you know, anything that you would have. And he had spent two years building your own business out.
Ryan: You made a good point. A lot of these agents will go there because they do get that salary that you good to start out and it's really hard to start out as a new agent. But you know, getting back to like how to differentiate yourself. Like let's talk about seller, like working for yourself. What are your, how do you differentiate yourself to a seller if you're going up against these people or just anyone at all, you know?
John: Yeah. You know, for, for us are our serve our differentiation is our service. We're very, very hands on. We hired, you know, we have a full time assistance allow us to then be present for our clients, you know, we don't take the listing and that hand you off to a listing specialist or hand you off to a, you know, an assistant or, or another person. It's really where we've created a structure where we are actually able to be there in the forefront for you who's learning their property the best we're going to know besides them who's going to answer calls and screen screen listing or buyer's agents and buyers. We are, you know, if there's difficult questions to answer and all that, we're, we're there to really answer those questions. So that's a big differential. Um, you're, you're just going to get more hands on experience with us as opposed to a new person contacting you every step of the way. You know, we're guided your where your guide through the sale or the purchase.
Ryan: Yeah. And not just that with the sell. Like I say, you know, we've got our services which are, you know, a staging services, the marketing when iron, a very exclusive group of agents that subscribe to a lot of, you know, pretty deep principles of marketing and you know, I would put myself up against anybody in this town in terms of how we're marketing property and the exposure we get on. I know you're doing the same thing, right.
John: Totally. We get on our listings, we get people coming in just saying I don't, I don't even know where I, how I found out. I get, let's say I just knew I had to come check it out because I knew it was in my neighborhood and it looked really awesome. You know, what goes out is we take professional photos, whether it's $100,000 listing or a $10,000,000 listing your, it's the same photographer that comes to both properties. And I don't mean that to say that the, the $10,000,000 listings getting a crappy photographer. I'm saying that the $100,000 listing is getting the $10,000,000 listing photographer. It's a no, and that's just the way it is. Yeah.
Ryan: We're talking about discount brokerages, you know, that that's the, there's a service with you for sellers. We do Internet marketing, we do professional photos. Would you staging and you know, like you said, taking the or the assistant having that concierge type service where we've got somebody on the front end and I've got, you know, one to two to three people on the back end, you know, handling things behind the scenes that they don't even see. So I'll tell you, it was just one more little segment about that company is that I had a listing that we got an offer from them. I got like a two offers just to offers and you know, they, they lost out my agent with you in an open house at that listing and they, she met those people and she followed up call column and this is the six home that we have lost out on because of, we don't even know why. And she's like, well, I know why the offer wasn't, wasn't very aggressive, you know, and it's easy to write an aggressive offer, allow the due diligence, you just got to be smarter about course.
John: Of course. And a couple of notes on, on that front. I've been in escrow before and the agent met the client at the home inspection for the first time, or they or a new agent was meeting them at the home inspection. I find that that's one of the most critical points you know, for, for a sale is the home inspection. And if you've got some agent who has never even met the client before standing there while they're finding out all the terrible things, terrible things about the house, they and they have no experience to say, you know, to talk them through these kinds of scenarios. You see a deal blow up in like 35 seconds, you know. And sure enough that buyer didn't go forward with that sale. And we went in, you know, we went back on the market because it wasn't and kept going. So. And another instance too, we actually, we have a couple listings that are show, you know, we have to accompany the showing and so we'd get calls to show it by them and we actually had one of the showing agents leave midway through the showing just said, oh, I've got to go to something else. You mind just taking over and just left, Oh, 2 million, a $2,000,000 listing of ours. And they just bounced.
John: Well, interesting. We do the same thing if I like, I'll work with investors pretty regularly and I had an investor or looking at a duplex and I don't want them to get that inspection report without having a walkthrough with the inspector. Right. Most of the time that the, the words on this paper are going to be a lot scarier than what's actually the problem. Yes. So I've had remote investors like you know, just me. They're like, no, no, no. I want to do face time at the property issues because you get them on paper, you know, inspection, you know, they say people. Some things look good on paper, especially as looked at on April, right.
Ryan: But they'll also, if you have a good inspector, they write what they have to write as they're supposed to and they have to, but they'll also give you like a gauge of like one to 10, like this isn't three problem or a 10 product. And I think that's, that's part of the service thing. So let's move onto I buyers, right So have any buyers hit San Diego yet?
John: A whole lot to be honest with you. There's a lot of talk of it. And I just haven't seen a lot. I mean at our price point, it almost doesn't make sense to an extent because our average single family houses selling in the, you know, five slash 600,000 range you know, and even a fixer upper for example, still is selling at that price point. So it's so I haven't seen a whole lot. I haven't gone up against someone saying, oh well I'm just going to sell it easily through know, through higher or grammar or whatever.
Ryan: So for us they have it just started and I've had these clients that like I'm looking at listing this $220,000 property and it's kinda like, you know, that's kinda on the outskirts of Austin. I don't normally take this to the referral from a good friend. So I was, I was talking with them and they said that they got and, and one of these offers, I don't think they even spoke to someone at 220,000 and I think the house might be worth, you know, 242 to 50 and it's a 10 percent service fee. So you and I are talking about before, it's like our commission is six around six percent. You know, it varies from market to market, but that's kind of where it's at. Hovers around there. Right. Why would you pay 10 percent on, you know, have a service fee. It doesn't really make sense.
John: Yeah. I think it has to do with, my guess is it's like a, it's like a new, it's a new shiny object for people and so that's part of it and they don't. It's the same thing when you buy tickets for a concert, you know, the ticket price is $150, but they're charging you $150 in service fees also. So the reality of it is the ticket price is more than double the price
Ryan: and you made a good point is that, you know, if, if, if your, if your motivation for that is to get the home sold quickly, you can just do that by pride and we're still going to be, you know, I mean you for um, you know, you will, you'll get and put that property if, if we put that on for $220,000 with good photos and a good little push it marketing, what do you think would happen on $250,000 Property Multiple offers guaranteed. Especially if it's, yeah, it's worth to 15 and you're listening to 20, you're going to get multiple offers, you know it's inevitable. That's, just, it's an o and you're going to, you're going to, you as the seller, you're going to be able to pick the buyer or you're going to at least be able to pick the most certain buyer which is going to put you in almost the same exact situation as you would be in with this I buyer program, you know Yes, it's a guaranteed sale, but at certain prices we can pretty much guarantee a sale at the same, the same way.
Ryan: Right And then, so this is what I'm talking about, like this is what this broadcast is about. Like if you're watching this and you're a real estate agent by the way. Oh Geez, I forgot if you're watching this or put this in the comments if you want to describe the future broadcast type, the word agent and you will be subscribed to our facebook lives that were coming in coming forward. But if you are watching this and you're a real estate agent, like, you know, rewatch it because you're going to come against these a discount brokerages. These I buyers and it's really not that hard to differentiate yourself, right. You know, you offer a concierge type service, professional photos, marketing over and above just putting something on the MLS and if they need a quick sale, we can drop the price at a very aggressive price that will a good and more likely get multiple offers. Right. So I think it's easy if you're armed and you're going to the appointment to know how to differentiate yourself, you just really need to be armed about that, right
John: Yeah. You've got to get prepared. Especially with examples. I can tell you, I can give examples over and over again in our market where, um, you know, discount broker or an Ibr type of situation there, there hands down getting less money for the house and we're getting. Yeah. you know, you know, when you look at the, when you look at it. Yeah.
Ryan: So talk about this and, and you know, for real estate agents that are watching this and that's what this audience is mainly about. Have you ever had a situation where you've turned down someone that they're not going to be the cat, they're not, they're not going to either appreciate the caliber of your service, like one of the, the, I dunno the the three points that we're putting in here or like when, when, when is it time to say no Have you had any experiences like that to a seller on it
John: We've definitely on the buy side, I've definitely had some and that side, it's, it's, it's usually comes down to personality or trust factor. If I'm feeling like a buyers just not going to trust anything that I say, yeah, they always know better than me. I find that that situation, I just can't help that person, you know, because I think I'm right about everything. But the reality of it is, is I'm selling 30, 40 homes a year. They're buying one every 10 years. Like I think I know a little bit about the process. So that's, that's, that's, I mean on the selling side, you know, it's gonna come down to again, it always is going to me, it always comes down to trust. And um, and so if somebody is, you know, people interview multiple agents, that's a given, but if you're interviewing for five, six, seven or eight agents at that point, it's like pick somebody up the reality and, and then if you're also just continuing to question the, the marketing tactics or I don't need that marketing or I don't want that or I don't want this or I don't want to pay for that because so and so we'll do it for less money.
Ryan: You know, it gets to a point where you're just like beating your head against the wall, trying to convince them that you're the right choice. It's probably better off to just walk away because you need to go spend more time focusing on people that actually want to work with you.
John: That's right. And I've had, I've probably had at least a dozen, maybe a dozen instances where I've had people that are comparing, you know, me to another agent like, well, such and such, but one percent I'm like, look, go for it then, right. I mean if you want me over, they're not going to do it for one percent and my given line can't even hold to their own commission. Then how are they going to negotiate for you You know And, and I had several of these where they come back and said, I wish I would have hired you. And then give the ones you said. I recently had just a few weeks ago, I had picked up a listing and it was on the market with another pretty top producing agent for 21 days. And a boy, this lady was something else. I mean, we staged your husband and moved out to California.
John: The client, she moved up to California and she found me on yelp and she has written 60 yelp reviews that are really, mine might what I'm saying to her. But what I found out was she was very, very difficult and he had left our stuff. They're moving California. She thought she was a designer. My wife like depersonalized the cluttered that really offended her even though we told her we were going to do that and it just can one another. And the final straw was like, she was like, well, you know, look, we need to have the house clean because she was okay with that. She's like, yeah, but you guys really need to go there and wait there with the cleaner for two hours. And was like, that's not what we do. You know, I'm not, I've got cleaners that you can trust or you can hire a friend or family member or not higher but get one to go there. So yeah.
Ryan: So alright. Tell everyone where they can find you at.
John: We're always real, you know, in San Diego doing, doing our thing.
Ryan: And Kelly's going to put that into the chat right here. So one of the biggest sources of income for me, our referrals for agents around the country. And so if you're watching this, you really need to really make these contacts. And you know, John is a fantastic agent in San Diego. So if you have any clients that are selling in San Diego or moving to San Diego, I would highly recommend you to hire this team. He's top notch. That's short and sweet. I don't, I don't have anything planned for next week. We'll be back in January with something else. I've figured that out yet. But merry Christmas John, and thank you so much for being on.
John: Thanks Ryan. Have a good one.