I used to be an Estee Lauder girl. Devoted to the line. Couldn't wait for Free Gift With Purchase. But I am now a traitor. I have deflected to Chanel. I used to be a huge fan of Chanel Allure. In fact, one of the sentences I practiced over and over in my head when I first visited Paris was how to ask a shop-owner if she carried Chanel Allure and how much it cost. Yet, I never really used Chanel makeup products. All of that changed last week.
An agent in my Lyon Real Estate office also works at Macy's. Her name is Linda Loli. She's a veteran in the Chanel department, and her make-up always looks great. Sometimes I stop to chat with her while I am downtown at Macy's. She suggested I make an appointment to look at Chanel's product line, so I took her up on it. It's been years since I bought a lot of make-up. And let's face it, I'm not getting any younger; what was a good look in my 40s looks rather silly as I approach my 60s.
Linda says Chanel is the best, and I believe her. In comparison, I'd say Estee Lauder is an A-minus. But I wouldn't have downgraded Estee Lauder if I hadn't tried Chanel. It makes a foundation that doesn't dry out my face and is a liquid-based pressed compact. Chanel also makes a lipstick that doesn't come off. No joke. One end of the tube is a stain, which makes your lips feel yucky, but the other end is a sealer, which gives your lips shine and moisture. You can eat lunch, and your lipstick still looks fabulous. It's an incredible product that I've been wanting for years. Rouge Double Intensite, Ultra Wear Lip Colour.
There's a reason I'm mentioning this to you, a parallel coming up. See, yesterday I received a referral call. A previous client had referred a home seller to me. He wasn't trying to do a short sale. The guy wanted to sell his personal residence as a regular seller. About half of my real estate business in Sacramento is regular real estate sales. Because he had equity, he wanted to get the most bang for his buck, meaning the first words out of his mouth were about finding an agent who charges the lowest amount of commission. He almost apologetically explained that he was planning to interview agents, maybe 3 of them, and wanted to know if that approach was OK with me.
Sure, I responded, because after you speak with several other agents, it will be apparent you're not going to find a better Sacramento agent than me. I welcome comparisons. I say this not out of arrogance but because I believe it. I know lots of agents who don't believe this about themselves. To many, the thought of competition is frightening . . . and it often shows, which is why they lose listing presentations.
Then the seller said he wanted to compare commissions and fully intended to choose the listing agent who charged the least. Well, I charge the most. And I told him that. I justify it because I focus on getting my sellers the highest price and providing the best service. I protect my client's interests. Would he rather get $10,000 more for his home or hire an agent who charges him $1,000 less? His choice. I don't throw my clients under the bus.
I'll give you an example. Last week I received a Request for Repair on my East Sacramento listing. The home inspection noted a Zinsco electrical panel and mentioned that some of these electrical panels could be faulty or dangerous. The home inspector suggested the buyer hire a licensed electrician to inspect it. Instead of getting a professional's opinion, the buyer's agent issued a Request for Repair and asked the seller to replace it. I advised the seller to reject the request and asked the agent to get it inspected by a electrician.
Next go around, the agent submitted an invoice in the sum of $1,800 to replace the 100-amp panel with a 200-amp panel. Nope, the seller will not replace the panel nor will the seller upgrade the panel. I didn't ask the agent to send me a bid; I asked for proof that the panel needed to be replaced. Was the panel faulty? Apparently not. The agent could not produce an electrician's report that said the panel was faulty. And by the way, dear buyer's agent, we issued a Notice to Perform yesterday and expect the release of contingencies today. An hour later the contingency release arrived in my email. Matter dropped.
Do you think my seller is sorry that he hired a real estate agent who charges the most? I don't think so. Just like I don't care that Chanel doesn't offer "free gift with purchase." I'd rather pay a fair price for an excellent product without the hype, smoke and mirrors. I suspect my sellers want the same thing.
Photo: Big Stock Photo
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Elizabeth, I love this story. You've done an amazing job of 'selling me' on two things...Chanel makeup and your professional skills.
I like the comparison Elizabeth. Of course, hiring a professional like yourself does cost a little more in the beginning. But in the end, is worth every penny, and actually ends up saving the consumer money and frustration.
Thank you
Elizabeth: You get what you pay for. If you want a bargain, you aren't getting the best that the market has to offer. You may feel like you're getting a comparable product or service, but not so.
Sounds like your seller just made the difference he is paying you in that electrical panel. An experienced negotiator is worth the money.
Elizabeth: Of course I agree with your opinion 100%. As a lender I've had my share of clients who don't care that I was an underwriter for 13 years prior and that my knowledge is priceless where their interests are concerned - they just want to know my rates/fees are. But now you've gotten me all amped up about Chanel. I used to live in Davis ('00-'05) and I love that downtown mall. I'm going to have to take the kids to Old Town soon and just sneak on over there! Hope all is well in the Sac'to area. Have a great day!
Hi Elizabeth, I really like this post and the comparison. Honestly, why would anyone want to buy the cheapest anything? Sometimes our budgets require it, but when selling a home, that's not a good time to scrimp. Go for the best - get the best results.
Very well said. . .sellers should compare the quality of service rather than commission alone
The sayings pile up and they are all true- you get what you pay for, penny-wise pound foolish. Price shoppers seldom save anything- they shoot themselves in the foot because penny pinching takes them away from the big picture.
I couldn't have said any better myself. You gave me some food for thoughts. Thanks!!
I am going to check out Chanel I have heard someone explain what is great about it the way you do in this post. For a lipstick that stays on through lunch, I would pay anything and seller's should all read this post. Some go through extraordinary hoops to save commission.
Hi Elizabeth~ LOL! Now you have me wanting to try Chanel makeup- especially the Rouge Double Intensite ultrawear lip colour and the foundation! And I am NOT a big make-up person as I rarely wear it!
I love how you handled the seller. I am not the cheapest. I am just going to hit the matter right up front. Great story, I learned alot.
Elizabeth,
Excellent post, and I am an avid fan of Chanel's makeup also. From a brand standpoint you know who you are and what makes you great. Estee Lauder is not in the same brand league as Chanel. They are in two differend target markets. There are women who will swear that Estee Lauder is the one for them, as you feel that way about Chanel, others will swear that Dior is the best, etc. Different brands different attraction points.
Thanks for sharing this.
For some sellers, the only thing will be their bottom line...they want the agent that charges the least and offers the highest listing price. I have turned down listings because sellers wanted me to cut my commission. Will. Not. Do. It.
You are approaching 60?!
That is the only thing in this article that I do not believe. Every thing else is so true!
Elizabeth, I am making an appointment for a makeover with Chanel. I am getting near 60's and it is time for a change. Excellent point about understanding your value. The last couple of listings I have put my commission up there and pretty much said what you posted. In fact, I took a new listing last week, top commission, and they asked me to increase it because of the staging suggestions that really changed the inside of that house around.... granted it is an estate, but huge difference. I believe there are firsts in everything, especially when the client gives you a raise one week into the listing.
This is a great comparison. The lipstick from Chanel may cost more, but you're going to get more out of it when you're not reapplying it after lunch, just as your sellers actually saved money by not hiring the cheapest agent.
Evening Liz, It is obvious when a seller is mostly interested inthe commission/brokerage fee. As I have worked in this business and done very well I notice this subject rarely comes up !
Elizabeth,
So many times you really do get what you pay. I have no problem having competition to get the listing. I know how to do what I do very well. Like you say, you can "save" money it appears by using a flat fee broker, but you might not "net" more.
Interestingly, I have seen a big decrease in the "cheap" brokers signs in the last year? Hmmm? I wonder why?
All the best, Michelle
Very well put. I learned a long time ago that you get what you pay for. I sure am glad I do not have to go through putting on makeup before I go to work. Makes life easier.
So you really like that lipstick and it really does not come off? It's pricey but if you just have to put it on once and forget about it ... it would be worth. Great post by the way. :)
Yes, people will pay for quality and for good customer service. The discount real estate agents short themselves as they bring down the market with offering substandard options. you get what you pay for, is all that it takes when sellers look at the bottom line. In todays time, sellers will want good service, as their home is bound to stay on the market more than 30 days.
So, often I hear that say old reframe about commission, and I agree that you have to have confidence in yourself. Great post.
Great analogy Elizabeth and it is obvious your are the new Chanel girl! It is so hard to make sellers understand this and yet it is so obvious. Must be that they feel actually guaranteed of the $1,000 commission reduction and our promise of the $10,000 savings in the long run just seems like hope. dunno how they can't see the commission reduction for what it is, smoke and mirrors.
Elizabeth, this was a great analogy.
Great post. You always pay for quality, but in the long run you get better value for your investment.
Hi Elizabeth ~ I like what you're saying in your post about not hiring an agent merely because they're cheaper. I do however take issue with the fact that cheaper automatically means lesser service. I'm also not saying that isn't sometimes the case. It is. It's also true that often times agents charge top rates and don't provide the service to go with it.
Like you I'm not frightened of competition. I know my true value. And as it happens I'm also cheaper. I don't want anyone to hire me for that reason alone though....
Denise
Elizabeth - Excellent analogy, I could not have said it better myself.
When it come to the bottom line seller need someone that will look out for them and not just do it the easy way.
...so glad it works for you...I'll try the make up, also.
Great story and post. You get what you pay for. The agent might charge the lowest, the effort will not be as much as the agent who charge the full commission. Everyone wants the best deal in terms of monetary but, Mr. Client, there are also other factor when it comes to transactions. If not careful, it might cost them more instead of paying the full commission.
I hate that sellers try to compare commissions when they should be comparing service and experience! That just irks me.
As for the makeup analogy, don't laugh, but I haven't bought ANY makeup in probably 15 years... My mom buys the ones with free samples and she passes the mascaras to me. The eye liner pencils last years, so that hasn't been replaced... I don't wear anything else on my face except the occational lipstick for important appointments.
You Go Elizabeth. Good job.
Price, in the absence of value, is meaningless.
A great analogy, Elizabeth, but unfortunately not all sellers work that way. I wish they did, though.
Great story, stick to your pricing!
Hello:
I like your confidence. They key, I think, is getting in front of people. When I do that, other agents don't compete well.
"You get what you pay for"... why do we continue to lie to ourselves and the general public with statements like that? If you hire an agent and they fail to sell your home, you pay nothing and what do you get? Nothing? No, not really. You get wasted months of keeping your home clean, you get wasted months of mortgage payments on a house you don't want, you get months of upkeep, maintenance, and property taxes just so you can carry the home longer.
Is the best agent the cheapest? No. Is the best agent the most expensive? No.
No?
No. The best agent is the agent who actually gets your home sold. That agent could be a girl fresh out of high school who just got her license for the heck of it. The best agent could be a limited service brokerage who only charges you $500. The best agent could be a guy with five years experience who happens to know how to save himself money by effectively marketing your home using free or inexpensive methods that actually work, who passes those savings along to his clients.
The best agent is the one who gets the job done. Price absolutely does not factor into how good an agent is.
Is an agent inferior because they work on a large team and they fork over 75% of their commissions to their team? That agent is only making maybe a few thousand on an average sale... does that make them inferior?
What are we really saying here? What we are saying is if an agent elects to reduce what they charge their clients, they are automatically a horrible agent and they should be avoided at all cost. What we are really saying is that most of us have built our business around the way things used to be done, and we are afraid to adapt to something different, or something that might some day cut into our incredible profit margins.
The quality of service from a real estate agent is not reflected by their commission. I can rattle off a list of "full price" agents who would have a hard time telling you what the difference between a modular and manufactured home is. I could also point you in the direction of some excellent agents who are happy to reduce their take so their clients can keep more of their money.
Instead of focusing on commission, a wise seller - or buyer - should focus more on the agent's skills and service. Excellent service can more than make up for a higher price, but a higher price doesn't mean better skills or service. Likewise, the cheapest agent in town may very well cost the client more than just the dollar amount written in the contract.
As Paul says in #36, "Price, in the absence of value, is meaningless." You could phrase it also "High price, in the absence of value, is meaningless." Or Low price, but I like it as he wrote it, because it conveys the message well that value is what the focus should be, because without that value it doesn't matter how high or low you set your price.
My wife really loved this blog, she thinks you are awesome, and an incredible seller!!
I've never used Estee Lauder products. But maybe I should try Chanel. Do you think it might help my business. Just kidding. When we become the best I believe we can ask for the most. I am not a markdown at Kmart and never will be. Give me Nordstroms please.
Hi Elizabeth,
The deadly combination of wanting to overprice the listing while discounting on commission - now that's the way to sell a house during the biggest recession since the Great Depression! Smart move - NOT!
Great analogy. And thanks for the lipstick recommend. I'm not sure which was more important, the make-up tip, or the knowledge in our own value and worth? :-)
It can be hard to get price shoppers to see the value of working with someone more experienced. But, many do see that value and those that don't are not worth losing sleep over.
I think it's true in most aspects of life that you get what you pay for. As in eveything there are always exceptions but the exceptions would be few!
You certainly proved your value through knowledge, experience, instincts and common sense. Has anyone noticed how much "common sense" seems to be disappearing from our landscape these days in many areas of life?
And a lipstick that makes it in place through meals -- oh my -- how great it is!!
Sue of Robin and Sue
Great post, great parallel, and very cool Meez.com Avatar on the right side.
I was shocked when I read this: "what was a good look in my 40s looks rather silly as I approach my 60s."!!! You look great! I used to be die hard Elizabeth Arden but it just got too expensive.
Timely advice. I had a similar experience and experience won out. Always stick to your pricing, it makes your fell good too!
I'm a firm believer in you get what you pay for. If we do not have confidence in ourselves, why would anyone else? I'm finding these days that sellers will go with a cheap service only to relist with them again when it didn't sell the first time! I scratch my head on that one.
Elizabeth: dynamite blog - i too believe in you get what you pay for like Jackie above and I too am a CHANEL GIRL..
LOVE IT....
I believe in the power of NO. My ego is not on the line everytime a listing opportunity is available so when I am told that I want the cheapest, and it is usally tied up with wanting too high a price, etc., I say no. I tell them thank you anyway and good luck.
I believe in giving the best possible service in any situation. I don't believe in cutting my rates but there are occasions when circumstances allow that to happen.The client still gets the best I have to offer.
Thank you Rick Snow. What an excellent comment. Very nice explanation. I happen to be one of those Realtors who have figured out how to reduce my overhead so that I can pass the savings onto my clients.
I do not charge less because I do less. I charge less because I CAN. Please, just go with me here on the assumption that EVERY MARKET IS DIFFERENT. In my market, homeowners have taken an absolute beating on their equity. Most have lost 20-40%. Many need to sell, but are not in a position to do a short sale. My ability to reduce my commission gives the seller many options that they might not have with a traditional brokerage.
If my business model doesn't work for you, that's okay. There is plenty of business to go around and I WISH YOU SUCCESS YOUR WAY. Let me find success my way.
Happy Selling!
Elizabeth,
Really great analogy....and you have such a great style in your blog. I always enjoy reading it! I love the way you negotiated and stuck to your guns for your seller....thanks for the tip!
Hey Al and Peggy: Gotta say love I love your leprechaun hats.
Nick: You should write a blog about it. Oh, wait.
Everybody else: Yowza, I did not expect to get up at oh-dark-thirty this morning and find all these comments. Yikes. But for those of you wondering about that Chanel lipstick, yes, absolutely, you can eat lunch and it still looks perfect. I was watching the Academy Awards last night and wondering how many of those actresses were wearing Chanel lipstick. Probably a lot of them.
Some sellers want the cheapest agent AND the best service. They don't necessarily see paying more will get them better service.
A tube of Chanel lipstick will last longer than it takes an exceptional agent to list and close a property. A seller will often have to replace his "cheaper" agent and lose valuable time--and we all know, time is money.
Great and entertaining post! Quality service...priceless!
I admire the way you handled the situation with repairs. That kind of knowledge comes with experience.
Thank you for this blog Elizabeth, I have been selling value for years, but forgot about negotiating the inspections, that is a true value that we add! I will pass this along at my next listing appointment this week.
It's also true on the buy side. On a transaction last year, my buyers requested significant concessions and the sellers said no, take it or leave it. Although my buyers were ready to proceed, we waited until the 11th hour hoping the sellers would compromise. Compromise they did, they granted my buyers the entire request to keep the deal alive.
they don't know what they want until you show them.
Well I don't care about Chanel but you sure convinced me, and likely other sellers, of your professionalism and the services they would get for your fee. Great real life story. It is just another example of how you get what you pay for. How often do we hear this!?
Jeff
Elizabeth good article. It is important to go into an appointment believing that you can beat anyone else who does what you do. Thanks for the insights.
EXCELLENT POST, Elizabeth! We would all do well to remember this advice to not devalue what we do by chasing low ball real estate agents, home stagers or vendors. I always say that I'm not the cheapest home stager, but I'm definitely the best value.
A classic "you get what you pay for" story!
Well done Elizabeth and congratulations on your featured post status.
You deserved earned it!
Thanks for the great post. Hiring the cheapest agent isn't much better for the seller than doing a fsbo.
Great post! I agree with you, but in these days and economic times, I find sellers are desperate if they HAVE to sell, and so they are going with whomever will drop their commissions...but still expect stellar service...go figure.
Great post! I agree with you, but in these days and economic times, I find sellers are desperate if they HAVE to sell, and so they are going with whomever will drop their commissions...but still expect stellar service...go figure.
Honestly I know some that want all of them at the same time...
Home sellers want the cheapest real estate agent.
Then they expect that agent to perform to the standards of the most expecrienced and expensive.
This was too easy.
Why is it that some Buyer's Agents just see mention of something that "might need to be looked at further" and they ask for it to be repaired/replaced? Buyer's Agents don't always do a good job explaining what an inspection is for, and why we do them.
Sellers just want more money in their pocket, but many many think WE ARE ALL ALIKE.
One agent is just like the other one, right?
Erica - Because their parents, friends and relatives (who all know more than we do about real estate) say they should. I recently had buyers negotiate a very good price on an 80 year home with all closing costs paid by the seller and then demand compensation for a water heater that was nearing the end of its life and the lack of gutters, which was in the inspector's report. The inspector told them that this document was a tablet for future projects that they might consider down the road. I advised them that the inspection was to correct safety hazards and code violations, but they insisted on asking for a price reduction. The sellers refused, the buyers informed me after closing that they were not happy with me and that my performance had slipped towards the end of the transaction.
Elizabeth, sorry to hijact your thread!
Best Service. Period. When that is proven then price is a secondary issue.
Great article Elizabeth! I'm just curious: Did you get the listing?
I've found that seller want "everything from a Realtor" so I try to cover it all.
Patricia/Seacoast NH
Elizabeth: I have written a blog or two about it... but what I have to say will never be featured here.
You know as well as I do that the majority of agents are afraid of the public learning that our business, when done effectively, does not cost much at all. Selling a home has very little actual expense, getting a license is cheap, continuing ed can be really cheap, the biggest expenses are websites, office space, car payments, and wardrobe. A smart agent doesn't need to spend thousands or tens of thousands of dollars on a fancy website, they don't need to spend thousands on office space, they don't need to spend thousands every year on car payments, nor do they need to spend thousands on wardrobe. None of those things make an agent any better than the next guy - it's all expensive flash.
While I appreciate that there are benefits to high end merchandise, sometimes you can find bargain priced items of equal or greater quality.
For example, my parents belong to a buyer's club that has a nominal annual fee and cuts out the showroom middle men - and their markup. The sofa you might buy from The Bon Home store for $5k might be priced $3k through their "club". Does that make their sofa an inferior product? No, it's the exact same product with the exact same manufacturer warranty. It isn't gray market, it isn't stolen goods, it's not Chinese knockoff with lead paint and asbestos stuffing - it's the exact same product, for 60% of the price that the unaware buyer might spend.
But most agents replying here feel that "you get what you pay for", right? I'll take the savings and spend a week on a beach somewhere with the difference, you all can pay "full" price and be proud knowing you just paid too much.
Ciao!
Well thought out and a good post, I will just have to agree to disagree. Price trumps all, it is what made Wal Mart the largest retailer, MArathon the # 1 gas distributor, Auto Zone the #1 auto parts store and the latest Net Flix # 1 video store.
Elizabeth,
Some do and some don't. I only take on clients who are prepared to pay a little more, or at least are not looking for me to lower my fees because some relative of theirs just got a license.
Brian
Elizabeth,
BRAVO! Great, well thought out post. Customer service still reigns supreme in my book and I believe clients respond well by sending their referrals.
Michelle Rios
WOW! Thanks for the ammo I'm using the next time a seller wants to beat down my commission.
Elizabeth: Great post. I have no doubt that you are highly skilled. Is the price-value issue a concrete dichotomy? What if a person could pay less and get high quality? Wouldn't that be the ultimate value proposition?
Everybody thinks they can do it better, cheaper. Who do these realtors think they are? Well I have to say I think I'm a professional. I know all things are negotiable. Go with whomever they have the most trust and confidence in. Otherwise do it yourself. If you tink you can.
Elizabeth, Great post...I know one thing...I don't want Wal-Mart selling my house....When I sell, and when I buy, I want service. I am willing to pay more for great service!
This was a great post and so were the comments. In over seven years, I have only competed for a listing less than 5 times. When someone calls me to sell their home, they want ME to sell their home. Has every home sold for the listing price - NO, have I altered my commissions in particular instances - Yes. Do I represent my buyer or seller to the best of my ability - You betcha! That is what I love about being an independent contractor - I can agree to work for whatever I choose.
Kudos, Elizabeth, for such an interesting topic.
PS - I'm gettin' me some of that lipstick...and maybe a makeover at the Chanel department, too.
I agree with the Nick S. posts and also w/ Joyce K.
I know a former excellent agent...the former is the agent part. He is still excellent in a different industry as he told me many times that he would never compromise his fee as he was worth every penny. He was a man of his word and he ran himself right out of the business.
The sad part for him was there were other excellent agents who were willing to adjust commissions to get the business.
Perhaps in a large metro market you can be firm (or unwilling to compromise) on fees. Not in smaller markets as word travels very very fast.
Would I like to get top percentage on every listing? Absolutely...but I also want to eat.
What I present to all agents and brokers...except not to the managing broker or owner of the real estate company is this:
If you work on a commission split or team commission split...you are actually listing for less than I am for your fee but then you are required to add in broker management fees, office management fees, national franchise royalty fees, company advertising fee, etc.
If you are working for a company that charges only a desk fee and/or national royalty fee...(I wore a balloon on my chest for over 10 years...so I know how it works) then you are factoring in those added expenses to your listing fees.
I work for myself and do not have the overhead costs or the split costs that most of you have. I do not have a managing broker or owner dictating to me and saying list at "X" or it comes out of your side of the company commission. I do not have an expensive office or car payment.
I can charge 35-40% less commission fee than most agents and still make more money than those agents.
That doesn't mean the seller gets less for his money...that means the seller gets more money.
And that doesn't make me a bad guy.
And finally...my wife could buy whatever Makeup she wants...but she was in Walgreens the other day buying some. I have seen her buy it from Target, Penny's, Walmart, Mary Kay, and Avon, but never from a high end store. Does that make her cheap or smart? As good of looking as she is...I would say it makes her smart.
I agree, you get what you pay for. Great story, I like it that you advised your client to stick to his/her guns, and it worked out.
Elizabeth,
This principle applies on our side as well. Many a mortgage applicant looks for the least costly loan officer/ company only to find out at closing or later on that the quality of service, delivery and follow-up leaves a lot to be desired.
Great point Elizabeth. Just because the other Realtor may be cheaper - this don't mean they get the best service.
To everyone who says "you get what you pay for":
If someone in your town decided that they wouldn't take a listing for less than 18%, does that mean that they are a better agent than you?
Alot of sellers believe we do nothing for our commission. I wish they could walk in our shoes one week. Most do not realize they have the best until the deal is closed.
Elizabeth, this is my favorite post of yours so far--well, maybe your kitchen remodel posts are included in favorite. If i still lived in Sacramento I'd hire you! In just a few sentences you showed how easy it is to be firm, clear, and direct. And saved your client $1800 in the process.
You get what you pay for...nuff said. Nice post Elizabeth.
Great writing and excellent advice for when we hear a seller ask us about commission!