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October 19, 2020

Discount Brokers vs Traditional Brokers: Analogies to Explain The Difference to Your Client

Powerfact: Using Metaphors and Analogies help communicate value when you are hit with a discount brokerage objection. 

By Darryl Davis, CSP

You may have come across some discount brokerages that offer flat fees, which give the homeowner certain bells and whistles, like professional photographs, a spot on the MLS, and a yard sign, but after that, the homeowner is on their own. Homeowners will choose this type of brokerage because it saves them on the commission, but there are a few things they often don’t realize about this type of brokerage.

Technically, according to the MLS rules, this brokerage is considered the listing broker, but they aren’t providing additional services and, in my opinion, their fiduciary responsibility has ended.

They provided what had been promised, and the money changed hands, and that is the end of their relationship. However, a lot of homeowners will think that the relationship still exists, but at this point, they would actually be considered FSBOs, but not all sellers realize that.

Analogy 1: The Tools Don’t Get The Job Done On Their Own

When it comes to explaining discount brokerages to these types of sellers, I like to use the hammer analogy. Here’s how it goes:

“Let’s say that you decide to build an extension onto your house. Let’s say you decide to do it yourself, kind of like you are selling your home yourself. You go to Home Depot and buy some tools, and let’s say you get this really great hammer. It’s made out of titanium, and was used on space shuttle missions, and it’s the best hammer you can possibly find. You get home with that great, expensive, wonderful hammer, and you put it on your kitchen counter.”

“Now, my question to you is this: Is the hammer going to jump off your table and start building your extension? Of course not because the hammer is a tool, and the tool in itself does not get the job done. You have to pick up the hammer and use it yourself. That is exactly what the MLS is. It’s a tool. The photos are tools. But the tools themselves don’t sell your home — they have to be used in a particular way.

“Now, you can take the hammer and other tools needed and give it to two different contractors. Now, Contractor #1 just started doing extensions. They aren’t licensed or bonded, and they are doing this job part time because they have another job they do Monday to Friday, 9 to 5. Will you get result? Sure. Probably. Eventually.”

“Or, you can give the tools to Contractor #2, who’s been doing this for years. They are licensed and bonded, and they have done so many extensions that they even wrote a book on DIY Extensions. Will you get results? Absolutely! You can give the same tools to different people and get completely different results.”

“Mr. Seller, my company wrote the book on how to sell a house in today’s crazy market, and this is what I’m going to do for you.”

Analogy 2: Fishing With a Rod vs A Trawler

This is where you can go into your marketing plan, but guess what, I have yet ANOTHER analogy that you can use when it comes to marketing the sellers home with the tools they already have.

“Mr. Seller, selling your home and getting the highest possible price for it is all about exposure, and that is what we get when we use our marketing tools properly. It isn’t just about having the tools, it’s about HOW you use them. It’s like the fishing pole technique. If I go out to a lake and throw the fishing line out, I might catch a fish after awhile. But, if you want to get the best fish, you need a fishing trawler.”

“You have a nice big net and you go to the right location where the fish are, and when you are in the right spot, you will bring in a haul of the best fish. If you are fishing in the wrong spot, you won’t catch anything. My company is that trawler, and we know what we’re doing. Why would you risk going with a company that hasn’t proven themselves through years of experience?”

The Takeaway

FSBOs will lose money time and time again, and it’s in their best interest to go through a traditional brokerage to get the highest listing. A company that is around for a long time stays around because they are doing something right. There will always be these fly-by-night companies that try to carve out a different market for themselves, and they are still trying to figure it out where  solid, traditional brokerage already has a proven formula.

“Do you really want to be some new company’s experiment? No, I don’t think you do.”

Ready, Set, Go!

Getting skilled at using these kind of metaphors and analogies is the key to communicating value when you are on a listing conversation. They allow you to convey big picture in a common sense way to sellers. Power Agents, you’ll find a host of objection handling visuals in the Objection Handling tab of your Classroom.

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