April is Teams Month here at Inman. Adding nuance on top of our weekly Teams Beat email newsletter, we’ll serve up top insights from the best team leaders across the country as we dig deeper into what it takes to build a team, scale it, and even leave one.
Real estate businesses and agents are afraid of the decline in buyer agent commissions they could experience this coming July — and they should be. The National Association of Realtors’ settlement, if approved by courts, will make it harder for those who focus on buyer clients to negotiate and secure their compensation and reduce commission transparency for both real estate professionals and their clients.
I’ve always been of the mindset that it is a more efficient use of my time to focus on sellers, and with the impending industry changes on the horizon, it is more important than ever to double down on seller business.
Sure, consumers want buyer representation, but they want the house more. Sites like Zillow, Realtor.com and Homes.com make it easy enough for buyers to shop for their home online. If commissions are decoupling and buyers will have to negotiate commissions with their agents directly, what’s stopping buyers from reaching out to the listing agent directly?
I personally own three brokerages with 700-plus agents. If we don’t make some major changes in how we work with buyers and start focusing on sellers, our agents’ commissions could fall to an unsustainable level.
That’s why we’re doing everything we can to shift our focus to sellers to make sure that whatever revenue we might lose on the buy side, we make up for on the seller side.
Here are 10 reasons to shift your focus to sellers
1. Become the employer, not the employee
On average, among agents in my own brokerages, it takes 38.5 hours to complete a buyer transaction and only 19 hours to complete a seller transaction. Listing agents own the inventory, while buyers’ agents spend all their time showing and selling the listing agents’ inventory.
In this scenario, the listing agent is the employer, and the buyer’s agent is the employee. The employer (listing agent) works all week, Monday through Friday, building up their listing inventory. The employee (buyer’s agent) spends nights and weekends (which would otherwise be time with family), out showing the employer’s inventory.
2. Greater recognition in your market
When you work with sellers, you can quickly become recognized in your neighborhood as a top seller. Your face will be on the signs, sign riders and just listed/sold farming postcards. Your name will be mentioned when neighbors are looking for their own agent.
Notice how most neighbors have no idea who brought the buyer? That doesn’t happen when you’re the listing agent.
3. Credibility
The more homes you list and sell, the easier for you to prospect for and generate more listing leads. The seller experience is logical, while the buyer experience is more emotional. Sellers ask for your statistics and track record; buyers just want you to respond quickly and get them in the home.
4. Referral business
More referrals go to listing agents than buyer agents. The perception is that listings require more skill, and therefore clients ask for an expert from an agent they already know, unlike calling on a listing as a buyer. When you get a reputation for being an agent who works with sellers, you’re more likely to win more referral business.
5. Easier to anticipate future income
We know, based on market statistics, how many homes are listed and selling in our local market and at what rate. If we’re doing a good job tracking our own numbers, we know what our business (and our paycheck) might look like three months from now based on our current listing inventory.
6. 2 transactions for every client
My team and I follow a 2:1 checklist: Every listing you take should be held accountable for generating two sales. The 2:1 formula has been around for decades and will become more important than ever with upcoming commission changes.
Do everything you can to generate two sales from each listing you take, whether it’s a buyer sale from an open house, a new listing lead generated from the neighbors, or a social media video of you and the listing that leads to new business.
7. Better stats and reviews for marketing
When you work with more sellers, you are more likely to do more transactions annually, which increases your statistics and helps your personal marketing efforts. It has a snowball effect.
Sellers want to see your stats; buyers don’t care about them. Focus on sellers, and generate stats to use in your advertising.
8. More control of your income
As the listing agent, you set the commission for yourself if there’s another agent involved. If you focus on working with buyers, you will spend more time fighting for what you’re worth and just taking what you can get if you can’t convince the sellers to help the buyer pay your fees.
9. Higher ROI
Buyer leads are more expensive than seller leads and, in my experience, have a lower return on investment (ROI) than ever before. The ROI on buyer leads is declining.
Protip: As tech advances, the old-school marketing and prospecting methods like door knocking, direct mail and handwritten notes will stand out more, and you won’t have to buy leads.
10. A more ‘unreal’ life
With all of this combined, a listing-based business gives you a better shot at living what I call your “unreal” life. That’s the professional sweet spot where you’ll spend less time on each transaction, net more money, and grow your real estate business faster and with less uncertainty.
No one knows exactly how things will shake out in the end, but I do know that if agents want to beat out their local competition, they’ll start focusing on owning the listing inventory in their markets. That’s what my team and brokerages and I will be focusing on from here on out.
Jeff Glover is the founder of Live Unreal Companies, the parent company of several real estate-related businesses.
