30 Aug Estate Agency – Competition is For Losers!
Estate agency – competition is for losers!
Let’s repeat that. Competition is for losers. Attributed to Peter Thiel, founder of PayPal and early V.C investor in Facebook. Someone who should know a thing or two about business.
“There’s a perception that losers aren’t good at competing. But we need to look at why, perhaps, competition itself is a bad thing.”
To paraphrase Henry Kissinger: “The reason that real estate is so vicious is because the stakes are so small.”
Especially here in the UK, where 1% transaction fees are the norm. Even the seemingly stratospheric 6% in USA pales when the ‘average’ real estate agent closes only twelve deals a year (source: Real Estate Express) and shares much of the fee.
It’s an industry that attracts a lot, a lot, of players. Each and every one of those players, whether experienced or not, is competing for the listing. Usually prepared to reduce their fee, sometimes prepared to mislead and manipulate their prospective client. A strategy that, morality aside, might work, were it not for the fact that other agents adopt the very same strategy.
Does that competition among agents benefit the end-user?
It has produced an industry where trust of real estate agents is at an all-time low. Where selling confusion produces better results than telling the truth. Where loyalty to an employer is considered a weakness. Where agents chase the next shiny object in an effort to differentiate. And, where every agent looks, acts and sounds the same.
Don’t tell me that competition delivers a fair fee for vendors.
Aside from the fact that most vendors don’t care about the fee, discounting fees is simply winning in a losing game.
Peter Thiel advocates creating a virtual monopoly. Not in the sense that it attracts the attention of the authorities, but one in which the barriers to competition are so high that it prevents mass adoption.
Estate agency, however, sits in a monopolistic competition industry.
Characterized as an industry in which many firms offer products or services that are similar, but not perfect substitutes. In which barriers to entry are low and the decisions of any one firm do not directly affect those of its competitors. An industry where consumer advertising features heavily. Where businesses are constantly stating & proving their worth.
That’s a place to avoid. Yet, year after year, it lures unwitting people in with the promise of fame & easy fortune.
Take Arizona, where 1 in every 168 residents is a realtor. Florida, where 1 in every 175 residents is a realtor.
The U.K doesn’t fare much better. Where low barriers to entry allow USA companies such as Keller Williams to recruit people with zero experience to join their other cult member agents in promulgating the myth of becoming a better estate agent.
Where’s it all going to end?
More importantly, how’s it all going to end?
My view is that it will end when realtors/agents stop trying to compete.
When they ignore the advice of estate agency trainers such as Tom Ferry, Grant Cardone and Tom Panos. The blind leading the blind when it comes to matters of emotional intelligence.
When they choose different over better.
Better encourages a vendor to compare. Without a full appreciation of the facts.
Different forces a vendor to choose. To make a binary choice. Yes, or No?
If that difference is in who you are, not in what you do, the choice is simple – is that realtor a good fit for me?
Are they transparent? Are they authentic, i.e will they say what’s on their mind without question? Is what they say congruent? Have they acted with integrity? Is there affinity? Can I trust them?
When the answers to those questions are readily apparent, the choice of realtor becomes very clear.
It might not be the biggest brokerage, or the one with the most ‘For Sale’ boards, or the most visible agents, but it will be the best fit.
Creating a ‘monopoly’ becomes easy.
You already have it – it’s just redundant most of the time!
Let me bring up the often erroneously described Personal Brand label.
Create a personal brand from what you do and how you do it?
Very little differentiation.
Create a personal brand from who you are and what matters most?
No competition – nobody comes close.
All that’s left is for you to inspire your potential clients.
To win the hearts and minds.
To be the real estate agent that you always wanted to be, but could never become. Because competition got in the way.
Competition that eats away at your self-esteem. Persuades you to copy ideas of other agents that ‘appear’ successful. Whatever they’re doing, they know far more about it than you. So ditch that play.
Competition is bad because it’s not the point of business. You need to focus on the value you add, not on how much better you are than another brokerage.
Easier said than done, but simply choosing different over better is the place to start.
Standing out – so you don’t have to compete.
Having vendors choose you, often before you ever meet in person – because you’re the best fit for them.
It’s a tactical advantage being different – simply because it’s an unknown for other agents and there’s always a fear of the unknown.
It’s never too late to be different.
Get to it, my friend.
Nobody likes a loser.
Thanks, as always, for reading.
If you’d like help with standing out, with losing your addiction to opinion, drop me a message on LinkedIn or through the site at www.andsothestorybegan.co.uk
On the blog page, you’ll find a simple C.T.A button that gets you more information on personal brand and there’s a series of six short emails, delivered to your inbox on the subject of ;personal brand if you visit www.andsothestorybegan.co.uk/personal-brand-helpline/