Follow-Up Letter Fails

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For the sake of efficiency, most real estate agencies use standard letters of some kind in their practice. Whether they use form letters that come as part of their database, or developed their own set of generic communications fit for property management or sales department purposes, standard letters are simply part of the landscape.

Not all generic communications are welcome or helpful, however. I recently received this (highly redacted) standard letter sent from one of Australia’s leading real estate agents to a past vendor (inserted below). Kerry (the letter’s recipient) told me that although she really liked the estate agent who sold her home and considered the sale a job well-done, she found this automated letter insensitive and mildly offensive. She’d been receiving exactly the same letter for years, and finally decided to share her feelings about the repetitive, unhelpful form letter with the agency in question by editing the letter, and sending it back.

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As you’ll have noted, Kerry has made her own amusing amendments to the standard ‘anniversary’ prospecting letter, highlighting how being reminded of her sale (as the result of a relationship breakdown) was not the best way to win her business.

Agents and BDMs have all likely experienced blowback from prospective clients for insensitivity when prospecting. I recall being verily blasted by a screaming elderly gentleman in the depths of grief when I rang his home number and asked for his wife. “She’s dead!” he bellowed. “Deeeaaaaddddd!!!!” Needless to stay, I took his name off our database quicksmart – and felt pretty dreadful about the whole thing to boot. Of course, we can’t hope to know the ins and outs of every individual we might cold-call who wandered through one of our opens five years ago. Occasionally making mistakes is just human, and sometimes irritating people is almost part of an estate agent’s purview.

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But we can take steps to ensure our current and past client prospecting is useful and sensitiveParticularly when it comes to form letters. They’re one of the most controllable forms of prospecting an estate agency does. Whether they’re sent out via snail-mail or arrive as newsletters from your database, form letters are one of the most powerful client outreach tools we have.

It’s worth considering, then – just how many ‘Kerry’s’ might you have on your database? Clients who actually liked your service, but have found your ‘post sale’ care invasive or insensitive? Referrals are some of the very best sources of business estate agents can come by, which is why investing in quality standard letters and working out when and whom you should sent them to is such a valuable activity. Here’s a few things to consider when it comes to the form letters you’re currently using:

  • Are they standard issue from your database? If they are, it means that hundreds of other agencies around Australia (and potentially in your farm area) are sending exactly the same letters to your prospects. Your prospects will notice. They might not say anything, but they’ll notice that your communications are decidedly generic and estate-agent-y. Good news is: you can create new letters and nip this problem in the bud.
  • Are they relevant? Just how valuable is an ‘anniversary of sale’ or ‘anniversary of leasing’ letter, really? Unlike the anniversary of buying a property (broadly considered a positive event), the motivation behind a vendor or landlord choosing to sell or lease their home can be as the result of a separation, death or change in financial circumstances. Rather than using a form letter to fish for listings from prior vendors, it’s probably better to give them a phone-call or send them a friendly (non real-estate branded, don’t be tacky y’all) card in the mail.
  • Can they be more effective? Generic form letters do the trick: they’re bland, they’re branded, they allow you to put in your client’s first name or property details, they communicate a request or offer and they may serve a due diligence requirement. BORING. That’s what’s they are. Subvert the dull and insensitive form-letter trend and choose to create a suite of powerful, clever call-to-action communications for your estate agency. You might choose to do this as a team, you might divide the task into sales and property management team tasks – or you might have the talented folks from Ruby Slipper create a suite of ripper communications on your behalf.

From lease renewals through to ‘just listeds’ (I think we should all put ‘anniversary of sale’ letters behind us for now) – can your mailouts and EDMs be more effective?

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Purple People Eater: Why Purplebricks Will Improve the Real Estate Industry

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Purplebricks is not going to revolutionise the Australian real estate experience. But it may very well improve it, and for the better.

For those not of the industry, a potted history of Purplebricks:  a UK-based technology business, Purplebricks offers fixed-price property marketing which purports to upend every market it enters. They’re best thought of as a technology and data company, in much the same way as Uber and AirBnB are: they don’t actually own assets such as physical agencies – they own technology and systems. They’ve got money to spend on PR and (because they’re clever and know which way their bread is buttered, unlike many of the old guard of our existing property industry), they’re engaging in both a traditional and digital media assault. Which is frankly what you have to do if you’re wanting a startup to do well.

Many agents have been proverbially sh*tting purple bricks at the thought of their industry being disrupted. If you’ve been getting your knickers in a knot about the entrance of Purplebricks into the Australian real estate market, it’s more a revelation of your potential professional weaknesses than of their ability to destroy your livelihood. Here’s why:

  • If you lose a listing to Purplebricks, you probably deserve to. Ouch. Right? Purplebricks listings are much like the infamous ‘chicken raffle’ listing, where four agents are called in to complete appraisals within a week. These listings are really a race to the bottom, where a decision by a vendor is based primarily upon agent cost because nobody did their bloody job and prospected them properly. Agents who have ongoing relationships with potential vendors based on true prospecting – which is offering information over a long period of time, paired with personal service and a sense of intelligent delight –  will not lose listings to Purplebricks. That’s because their offering isn’t based on a fixed price. It’s based on expertise, accountability, an actual relationship and (most importantly) – reciprocity. Purplebricks will undoubtedly appeal to some vendors – those who haven’t been prospected, those who are very price driven, and those who think they are the expert. The first of these – the vendor who hasn’t been prospected – is really a problem of agent neglect which can be turned around by action. The second two – vendors maniacal with greed or narcissistic in the extreme – are best avoided anyway. It’s these latter potential clients that Purplebricks will benefit from, and probably not to your detriment.
  • The UK real estate market is not the Australian real estate market. The UK has a ‘chain’ real estate system, which diminishes urgency and expectations for buyers and vendors. It’s best understood (in a nutshell, and very simplistically) as a chain of property settlements which must occur simultaneously. Every sale is conditional and held together by a chain of purchasers agreeing to go ahead with their transaction. If one buyer can’t settle for whatever reason, the whole chain of transactions fails. It’s unthinkable in comparison to the Australian real estate transaction process. Our own market has no such weakness: if you don’t perform on an unconditional contract, you’re toast. Australian expectations of real estate sales transactions are substantially higher than they are in the UK. Price quoting on property and expectations of price based on the quote also differ – in the UK, the asking price for the property is the asking price expected. Buyers know to offer below immediately. Our own market is the polar opposite – with buyers recognising that the asking price is often below vendor expectations. An Australian vendor left to their own devices to quote on property price a la Purplebricks will be completely stuffed, resulting in failed campaigns at a much higher rate than traditional agent-led campaigns. Moreover, capital cities in Australia have auction-centric markets. As any agent worth their business card knows, a successful auction campaign relies on conditioning and education of both the vendor and the buyer. It’s not a matter of whacking a price on the thing, uploading it to your favorite real estate portal and cracking open a tinnie. Purplebricks’ model appears to favour the private sale market which is more natural to the UK – it will probably work well in some more suburban areas of Australia which have limited capital growth and poor agent activity.
  • Fixed-price real estate marketing isn’t a new thing. Purplebricks has marketing and technology, and they’re utilising it at far more sophisticated levels than many of the dodgy fixed-price ‘Sell My Whatever’ brands of the past. But their model is essentially the same. Their offering will appeal to some of the market, certainly – variants on this offering always have. The best way to future-proof yourself against potential disruptors wearing different guises? Be a better agent. Use technology to your advantage. Prospect properly. Pay attention to details. Make people feel special. It’s a service industry, which is something the real estate community itself sometimes forgets. Our trade is our capacity to serve our community and negotiate relentlessly for our vendors.
  • Horses for courses. Not every vendor is driven by value. Some are driven by prestige: they want to list with the best agent who has the best marketing. They want the soft gloss, four page brochure. They want the VR floorplan. They want everything that opens and shuts, and they want their friends to see it. These people will not be attracted to PurplebricksOther vendors will kill you for a dollar and want to haggle down the price of a Happy Meal. This may be partly your failure for neglecting to show them why you deserve to be paid for your time and effort. But it might be because they frickin’ hate real estate agents. Or that they’re just really cheap, too. And that’s okay. Horse for courses. Purplebricks isn’t for everyone any more than you are.
  • Negotiators R Us. Purplebricks flat-price philosophy works when you don’t truly understand the ugliness of human nature. That vendors and buyers are greedy, vulnerable, scared and largely unable to negotiate effectively. They’re strung out and emotional: they’re three year olds at dinnertime, waving around a contract of sale. That’s why there’s estate agents to coach them through this risky, emotionally fraught process. Vendors don’t believe they’re unreasonable with their price expectations. The fact they’ve rewired the garage and put in new carpet has to add $12,526.00 exactly to the price they’ll get for the home, right? They don’t understand the dangers of pricing a property inappropriately, and the risk that overexposure in the market has upon a property’s eventual value. Purplebricks aren’t an estate agency: they’re a technology business offering systems and access to task-oriented agents. They’re not you, agent.

If anything, Purplebricks will improve the state of the Australian real estate market by encouraging existing agents to finesse their offering to the public. To go about things in a different way, using technology and old school service. It will make stragglers practising in markets too long neglected  by lazy, backwards Principals shape up or ship out. The only people who have anything to fear from Purplebricks are agents who are lacking in skills, ideas or talent. So don’t worry about the disruptors: just get on the with the job.

* I did contact three Purplebricks estate agents in Melbourne to learn more about their model. All three told me they were under strict instructions not to speak to the media about their experience as Purplebricks agents.