When I talk with agents about calculating their profit margins ... oh, who am I kidding? Agents don't talk about profit margins. For the most part, if I'm not talking about something that either saves them money or saves them time, their eyes glaze over, their shoulders slump, and most bow their head in prayer to the almighty Smartphone.
But what about the Psychological Profit Margin (PPM)? This idea can save you time and money.
Slow down.
For the most part, we are so eager to work with someone -- anyone -- that we often skip any meaningful interview or profiling process. Instead, we throw complete strangers in our car and show them homes. Or we tour a potential seller's property with the goal of getting it listed as quickly as possible, and never give a second thought beyond the standard ‘Why are you moving, where are you moving, and how much do you owe?"
Many times, these rushed relationships end up costing us more than just dollars. We sacrifice time, self-esteem, and sometimes our reputation in the name of the pursuit of money.
We might save a little money (or even make more money) if we can develop a system that shows us when to say, “Thanks, but no thanks. Let me introduce you to my colleague Cindy, who will be happy to help you."
Less is more.
I know what many of you are thinking: “Yeah, easy for you to say." Actually, it is easy to say, but it's even harder to watch. I've spent countless hours with agents looking for guidance on how to get a stubborn seller to agree to a price reduction, or counsel a buyer that insists on presenting a laundry list of 73 items requiring repair following an inspection. These are challenging situations that take up boat loads of time and energy.
I've always been a fierce advocate for conducting a structured interview for buyers and sellers that digs a little deeper than just motivation, wants, and needs.
Questions that reveal personality traits and negotiation styles are critical to knowing what future interactions with this person will be like.
How will they handle the suggestion of a price reduction? How will they handle a laundry list of inspection items? Will they want to submit ridiculous low-ball offers? Will they honor my role as a professional and respected member of the community?
Find the right fit.
If the answers to these questions stack up in a way that point to a rocky and conflict-strewn road, I want to reserve the right to “not play" and hand them off to someone who may be a better fit. This frees up time for me to help other folks with whom I can get along well and play nicely.
I'm not saying that every transaction needs to be sugar and spice and everything nice. After all, we are professionals and must demonstrate flexibility and poise in working with folks from all walks. Just be sure you take as much care and responsibility for choosing who you work with as your clients do.
Chris Hardy is a Managing Broker for Coldwell Banker Residential Brokerage in Fort Collins, Colorado. In 2011 he was named Realtor of the Year by the Fort Collins Board of Realtors. You can send your feedback to Chris at chris.hardy@coloradohomes.com, and you can visit his website by logging on to www.chrishardyrealtor.com.
