I ran into an old real estate friend the other day. We met at a training meeting years ago. He had bounced from company to company, staying in one place for a year or two, then moving on to what he perceived to be a better deal. I think he'd been with four companies in seven years. He even got out of the business for awhile a few years back when the market was so bad.
'What are you doing these days,' he asked.
'I'm still building my GreatNest office,' I replied. 'We get bigger and more productive every month.'
'I don't understand how you can do that!' he quipped. 'I mean, discount brokers have their place, I guess, but you can't be making any money and the harm you're doing to full service Realtors is huge!'
I paused, letting the steam pour out my ears. 'I'm not sure I know what you mean,' I finally replied.
'Well, people don't care too much for realtors anyway, and when you charge a couple hundred dollars to put a sign in the yard and the listing in the MLS - and that's it - it just makes things worse.'
'Is that what you think we do?' I asked.
'Well, sure. I don't mean you personally, but that's what GreatNest is famous for, isn't it?'
'I guess it depends on who you're listening to,' I answered. 'If you pay attention to the chatter of traditional real estate agents - particularly those who are nervous about losing market share to GreatNest brokers - I'm sure that's what you'll hear. But if you talk with the consumers we've helped, you'll hear a very different story.'
'How so?' he asked.
'First off, we're not discounters,' I responded. 'A discounter takes the ordinary cost of a good or service, cuts it and makes a corresponding cut in the good or service to offset the price cut. Maybe widgets are selling for $2.00 apiece. The discounter will find a way to make them for less - probably with inferior materials - and then cut the price to, say, $1.5o. People who shop price and don't care about quality will often gravitate toward discounters.'
'What's that got to do with real estate,' he asked.
'A real estate discounter would look at what most other brokers are charging - say, 6% of the sale price - and then find a way to charge less. For example, maybe the discounter would charge 4% but provide a minimal or limited service.'
'Yeah,' he came back, 'That's what you do, right?'
'No,' I said, 'We're not discounters. We don't charge a lower percentage of the sale price for our services. Our pricing model is completely different. We charge a set fee to sell a house, just like your dentist does when he fills a tooth. Everybody pays about the same thing. But we do everything traditional brokers do - and actually more. There is no reduction in service. We are absolutely a full service real estate company. We just have a different business model - a much more efficient model - that enables us to charge differently, and charge less.'
'Well, that sounded like somebody's script!' he quipped.
'It's not a script,' I answered, 'It's the truth. When a seller lists with us, we put a sign in the yard, create professional fliers and a website with dozens of photos and a virtual tour. We put the home in the MLS and market it aggressively to other Realtors. We put the listing up on dozens of Internet real estate portals including Trulia, Zillow and Realtor.com. We hold open houses, screen buyers for financial capability, show our listings, help our sellers weigh the good and bad of offers, calculate anticipated net proceeds, coordinate inspections and all details, solve problems when they arise and look out for our clients' interests all the way through closing.'
'And how much extra do your home sellers have to pay for that additional service?' he asked. I was getting perturbed.
'Jim, are you listening to me?' I asked. 'That's what we do for all of our listings and we do it for a low set fee instead of a big percentage based commission. There's nothing extra, no additional fee for any of our services.'
'If what you're saying is true,' he came back, 'Why wouldn't everyone sell with GreatNest?'
'Well, of course, everyone should!' I answered. 'But do the math: there are about a million traditional real estate agents and brokers out there - just like you - and there are just a few hundred of us in the GreatNest system. We have to reach a lot of consumers before most people begin to understand how we are different and better. But we're doing it! little by little, every day.'
'Ok,' he said, 'Fine; for now. Just do me a favor and stay out of my area, ok? And next time the market tightens up and it gets harder to sell real estate, I expect you'll be closing up shop anyway.'
'Jim, old pal,' I began. 'I have a listing appointment in a few minutes so I'll have to cut this short, but let me remind you: I was here before the market went down seven years ago. I did ok when the market was in chaos and real estate companies were closing right and left . . . when you left the business, in fact. And I'm still here, making more and more Triad consumers happy with our service every month. GreatNest isn't going anywhere except up!'