Blog / Prospecting

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Trust. It’s not often the first word that springs to mind when discussing real estate, yet it is the core product on which the industry is based.

If trust was the word prospects associated with the real estate industry, there would be less competition to get in front of the vendor and less quibbling over fees. So how does the industry bridge the gap between reality and the ideal?

Building Relationships

Ray White Growth CEO Mark McLeod has been working with the international group on the answer – developing longterm relationship strategies. Instead of clamouring for the attention of a vendor as they make the decision to sell their property, Ray White agencies are working on building relationships over time, so when the vendor makes the decision to sell there will only be one agent they call. Mr McLeod says this is not a new concept, however it still remains relatively elusive to many. “Most agents build no relationships with vendors on the ground. Every agent is trying to get the business at one moment in time; we try to get the owner when they’re right at the point of decision and, because the majority of owners haven’t developed a relationship of trust through time, they are forced to call in multiple agents,” Mr McLeod explained. “Effectively when an owner calls in three, four or five agents they are saying 'I don’t trust anyone'. When they don’t trust anyone and they can’t base their decision on trust, what can they make the decision on? Fees.” This is where discounting and inflating the price come into play in the attempt to do anything to win the business. “Because we’re doing a job that’s just about the transaction, the whole industry is forcing people to make decisions based on fees. As an industry we’re creating that,” Mr McLeod said.

Get ahead of the competition

Many agencies in their attempt to win this three-, four- or five-horse battle spend thousands of dollars on high-end and sexy marketing and point-of-sale material to push their case to the fore. The industry needs to provide home owners with a broader service that goes beyond the sales transaction if it wants to stop competing on fees. It is not that vendors aren’t interested in real estate, in fact they are. They want to know what the median price is for their street and suburb, or whether the supermarket planned for down the road is going to add value to their property. What they don’t really care about is that you made three sales this week. “Our focus has to be about providing a service to the owner for the entirety of their ownership,” Mr McLeod said. “The reality is we’re not putting people on the moon; we’re not splitting atoms; we’re not winning Nobel peace prices; but yet we, as an industry, communicate with people like we’re rock stars. People want genuine information about themselves and their investment and we don’t do that well,” Mr McLeod said.

Look to property management

The figure of 20-25 contacts per year stems from real estate’s service-driven arm – property management. Mr McLeod said he looked at an average rent roll of 500 properties of which 15-30 would be sold every year. The incumbent agency would win 80 per cent of these sales simply because the vendor had a relationship with the property management team. And this relationship is based on service. “With the rent rolls and properties you manage, you don’t try to sell them first; you provide them with a quality service. The model for property management is service before sale, but the model with sales is a bit like politicians, in that it’s like 'if you list with me, then I will give you good service'. The industry, as a whole, has to change its attitude,” he said. Mr McLeod credits innovative thinkers, like Matt Sims, Andrew Bell, Chris Hanley and a number of industry leaders, in continuing to drive the industry forward to help develop these relationship-building methods. Even though this is a direction in which the international group is headed, Mr McLeod said there was an industry-wide problem in protecting fees and the industry’s value to the community. “We need to do more than think all I do is buy and sell homes. We need far more dimensions than what we do,” he added. Those who understand real estate’s core product is trust and how to nurture it, will see benefits for vendors and themselves.

Service before sale

So Ray White has set about creating a series of products that allows agents to build long-term relationships with clients, which will then lead to trust. “This whole service before sale mentality is actually about building the core product, which is trust.”

These products include:

• Concierge - sets up gas, pay television, broadband, water, electricity and 30 days of insurance for buyers
• Market review documents - can be created and sent to clients within five minutes
• Community newsletters
• Regular phone calls - 4-5 per year
• Loan market - mortgage broker
• Insurance
• Surveys
• Community offers, such as vouchers
• Local and community involvement, such as sponsorship

“We provide that service because it’s a way for us to provide another product to a client outside of the real estate transaction. We’re not doing it to get rich out of it; we’re doing it because this is where we see the industry heading.” “If you have a relationship of depth, you start to provide products and start to be relevant long before you get to that stage of having to make a decision,” Mr McLeod explained, saying real estate agents needed to ask people in their area what they wanted, provide that information and then follow up. “If I met you today, I would interact with you 20-25 times a year about the things that are relevant to you, until the day you go to sell.”

 

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