Estate agents risk making commission the deciding factor for vendors by failing to demonstrate the value of their expertise according to The Guild of Property Professionals.
Iain McKenzie (main picture), Chief Executive Officer of The Guild, says agents need to do more to differentiate themselves on negotiation, judgement and strategic advice rather than allowing consumers to compare businesses primarily on fees.
He argues that estate agency can be viewed differently from professions such as solicitors, accountants and financial advisers, where consumers are more accustomed to considering expertise and experience alongside price.
The problem is compounded when agents appear to offer similar valuation presentations, marketing packages, portal exposure and technology, making commission one of the clearest differences visible to vendors.
VALUE OVER PRICE
McKenzie says: “When someone needs a solicitor, accountant, architect or financial adviser, they rarely begin by asking who charges the lowest fee.
“Cost plays a part, but it is usually considered alongside the experience and expertise of the professional, and the confidence that they will achieve the right outcome.
“Estate agency can feel very different. The conversation can quickly become centred on commission, partly because consumers may perceive agents as offering broadly the same service through the same property portals, marketing channels and technology.”
McKenzie argues that some of an agent’s most valuable work can also be the hardest for prospective clients to see when choosing who should sell their home.
DIFFERENTIATING SERVICE
He says: “Great negotiation, sound judgement, strategic advice and the ability to navigate complex transactions aren’t always visible at the point of valuation.
“Much of an agent’s value happens behind the scenes, in the conversations that prevent a sale from collapsing, the negotiations that secure a stronger offer and the advice that changes the direction of a transaction.”
McKenzie adds: “If every valuation presentation sounds similar, every marketing proposal follows the same structure and every agent describes their service in much the same way, it’s hardly surprising that clients look to the one thing that’s easiest to compare: the fee.”
He says the industry has become effective at explaining what agents do but now needs to become better at demonstrating why the quality of that work can affect the outcome of a transaction.
