099: Navigating Client Conversations: Communicate Your Value with Confidence and Clarity with Lynn Madison: Part 2

Please Note: Since the recording of this episode, NAR entered into a proposed settlement agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. To learn more, and to prepare for the practice changes taking effect August 17, 2024, go to facts.realtor.

Welcome to Part 2 of my conversation with Lynn Madison! Today we are talking about different business models. As you refresh your presentation of what you do and what you charge, we want you maybe to consider some other options or, at least, some other parts of the business and we also want you to be aware of the possibility that somebody else might have a different business model; how are you going to be prepared for that? Go back to episode 098 to hear the start of our conversation on clearly communicating your value to your clients. Lynn Madison has received the REBAC Hall of Fame Award, the REBI Distinguished Educator Award, and Educator and REALTOR® of the Year, both from the Illinois Association of REALTORS®. She is also one of the primary authors of the ABR® designation course and we are thrilled to have her back with us again. We will link to the other two episodes where Lynn has been with us, in the show notes.

 

Welcome back, Lynn Madison, for Episode 2!

[2:25] So we just want to talk about maybe some of the different ways people can get paid, maybe some challenges we see, and what we hear from people talking about business models. [2:45] Your business model must be something that is allowed in your state. Your menu of services must not include options that are lower than the minimum services that the license law requires you to give.

 

[5:05] Competition.REALTOR (now facts.realtor) lists tasks you perform for clients. Are they in your business model? Lynn says your business model is what you deliver but be consistent. She talks about when inconsistency hurt her.

 

[7:44] If you provide different levels of service, have the client check and sign on a written document what level of services they are choosing, so there is no confusion or anger later. Be very clear about it.

 

[8:37] Lynn has a pledge of performance. In it, she offers her full level of service to every client. If she offered less service to some, she would need a separate pledge of performance for that level of service.

 

[10:07] Lynn teaches about six buckets: finding a suitable property, showing property, analyzing the market, writing a reasonable offer, negotiating the offer, and following the transaction through to the closing.

 

[10:47] People don’t like to lose out. When you have a buyer sign a Buyer Representation Contract, you move the buyer from customer-level service to client-level service. Lynn explains what that means by law.

 

[14:50] You’re going to want to have this Buyer Representation Contract signed with a compensation amount in it. You’re going to have to figure out how to talk about compensation with your buyers.

 

[15:33] Stop being afraid of talking about compensation. Explain what it is you do to earn the money you are making. Nobody works for free.

[19:34] Study in the last 18 months in your market, how long it took you to find a property for your buyer. Tell your client, in this market, it takes about four to six months to find a house. Would that fit your plans?

 

[22:54] Follow your state law regarding the contract and protection period. What if they buy something after the contract that you showed them? If the contract period is l