Exclusive real estate brokerage
At Monapart we like to work on an exclusive basis, and we do so with our clients' 90%. However, our approach to selling brokerage/representation services and pricing is different from most agencies.
PREVIOUS NOTE: The aim of the Tu Vivienda Marketing Plan
The customer acquisition courses given by real estate trainers always include a space dedicated to the Your Housing Marketing Plan (PMTV). There is no consensus or standard on what a TVMP is and what actions it encompasses, but it could be summarised as follows everything a professional does to achieve selling a property at the best price in the shortest timeFrom compiling all the documentation necessary to sell to accompanying the client to the notary on the day of the signing. In other words, in the real estate sector, PMTV and service are one and the same thing.
However, any experienced real estate agent knows that it is unnecessary to make a specific marketing plan for a specific property because it is not necessary:
- The market in which the agent works (and the property is located) is necessarily local and known.
- The processes for documentation, measurement and valuation of the dwelling are always the same, even if it is different from other dwellings.
- The main technology used by the 90% of potential buyers to search for most homes - the real estate portal - is homogeneous and covers the whole territory (see footnote 1).
- The processes of qualification, visiting, signposting, negotiation, tendering, etc. are repeated with minor variations in most cases.
The reality, therefore, is that the PMTV is a case-by-case standard, and while we can agree that as long as the PMTV is applied on a case-by-case basis, it is a standard, it is a standard that can be applied on a case-by-case basis. serviceAlthough a certain degree of personalisation is assumed (no two services are the same), this is no greater than the personalisation you can get when eating paella at a beach bar.
Q- But wait... Why is PMTV explained in courses for attracting property owners and not in courses for selling already acquired properties?
A- Because the objective of the PMTV is not to facilitate the sale (it is not necessary, that is what the service is for), but to create a fictitious complementary benefit that justifies the client-owner's commitment to the agent through a contract of exclusive representation. The paradox and perversion of PMTV is that it is sold as a selling resource (of the flat), but it is a buying lure (of the exclusive).
Q- But wait... Didn't we say that PMTV is the service itself? Why not sell the service directly?
A- Well, because the service (better or worse executed) is done by anyone; because it is very difficult to sell something that anyone does; and because in the service sector sales are made a priori (you can't try before you buy). That is why agencies without added value or differentiation need PMTV as a resource for selling a service that they generally execute as well or as poorly as any other agency.
Q- OK, but... Why did you give us this badge if the title of this post is "Exclusive Real Estate Brokerage"?
A- Because in order to build my argument on how to sell exclusive representation services (the Monapart model) it was necessary to "unmask" the role of PMTV in the hands of some agencies.
The Tu Vivienda Marketing Plan is a standard applied on a case-by-case basis, and although we can agree that as a service, a certain degree of personalisation is assumed.
THE CURRENT PARADIGM
A couple of years ago, at the Immoscòpia reception dinner held in Girona, two estate agents were surprised that at Monapart we charge less to clients who work with us on an exclusive basis. One of them said he charged the same with or without exclusivity, although the service he offered was different; the other said he charged more when working on an exclusive basis because he offered more service in this case. To my mind, this reflects a lack of understanding about the nature of our work and how we are paid for it:
- If the work of an estate agent is remunerated on the basis of the service provided, it should never, ever, ever, ever, ever be charged on a success fee.. The focus is on the performance of the service, not on the outcome.
- If the work of an estate agent is remunerated on the basis of success (as it is), the service provided is irrelevant as long as it sells.It would be absurd for the agent to offer an insufficient service (the Normal Service of the graph) that would prevent him from selling the property. Moreover, if the agent thinks that by offering a Normal Service, the chances of selling are low, it is unethical and business-ruinous to offer this service to his clients. If, on the other hand, he thinks that this service is sufficient, why would he assume more expenses for the same income?
Is it not obvious that such a fee structure is completely schizophrenic?
MONAPART AND THE RISK-RETURN TRADE-OFF
At Monapart we like to work on an exclusive basis, and we do so with our clients' 90%, however our approach to the sale of brokerage/representation services and pricing is different to most agencies as (1) the level of service is always the same, with or without exclusivity (see footnote 2); and (2) the price of the service is lower if there is a commitment to exclusivity.
Our model is based on the fact that the client deserves the same service whether he works with or without exclusivity: the service necessary to sell his property.. In both cases he will want to sell at the best price in the shortest time; in both cases he will pay if we sell and he will not pay if we do not. The only difference is that if you do not entrust us with the exclusivity, then we assume more risk of not selling, and if we assume more risk we will want to be remunerated at a higher interest rate (we will demand higher profitability). That is why working exclusively with Monapart is rewarded with lower fees: the greater certainty of selling makes the service cheaper because it increases the guarantee of collection.
So, just as investments are governed by a balance between risk and return...
... brokerage fees should also be paid more as the risk of not making the sale increases.
CONCLUSION
The objective of a real estate agency should be to offer its clients the best service to sell their property at the best price in the shortest time. Having an exclusive representation contract or not should not condition the services provided by the agent to his client.
The client's own risk equation will determine his willingness to work with a single agency or to diversify his sales options between two or more (even if the latter may be counterproductive to his interests).
Working on an exclusive basis at a lower price than without is a way of rewarding the client's trust while maintaining a balance between the risk and return assumed by the agent. At the same time, this is consistent with the client's need to compensate financially (with lower costs) for the perceived higher risk of being entrusted to a single agency.
(1) Some homes, particularly in the luxury residential sector or those whose purchase target is not technologically literate, do require specific communication actions: advertisements in the press, distribution of flyers, open-house, direct mailing to interest groups, etcetera. In any case, this is a small percentage of the homes transacted each year in our country.
(2) Except for property sharing in MLSs, which is often prevented by the MLSs' own bylaws.
