Vendor Advocacy has been around for decades. However in Australia the concept is just catching on. And it’s growing. There are however a couple of ‘grey areas’ with regards to understanding vendor advocacy and how it benefits home sellers. Vendor Marketing, the Vendor Advocacy experts shares its thoughts and what to look out for.
Vendor Marketing is of the firm belief that only one real estate agent is required in the selling process. The reason we believe this is simple. If there is more than one agent involved in the equation there is the potential for collusion and therefore an inherent conflict of interest.
Vendor Marketing is not a real estate agent although we have studied real estate to ensure we stay in sync with the industry. We position ourselves as a strategic vendor advocacy service. That is, we’re independent property marketing experts who also happen to know who the best real estate agents are in Melbourne. And rightly so! We’ve been involved at the forefront of real estate media and seen its recent shift. In short we provide our clients with qualified independent marketing strategy advice. Marketing a home these days can be the greatest expense. Therefore we reduce then optimise this expense – as we know what works and what doesn’t.
What home sellers should be aware of is vendor advocacy firms promoting they do not charge a fee. Indirectly they do! Here’s how;
Vendor advocates may be tempted to recommend the real estate agent who pays the highest split of the final commission. Or choose a real estate agent with whom they have a good relationship with but who might not necessarily be the right person for the job. That is, in terms of achieving the best sale price for the client. In these type of arrangement(s) you always find the real estate agent’s commission is higher. Because on average they split 40-50% of this with the vendor advocate upon sale. Quite simply because the vendor advocate advises the real estate agent beforehand of their percentage split of the commission each real estate agent will come in at a far higher rate. Sometimes up to double what they would normally charge.
It can also be asked if vendor advocates are receiving a high split of the sales commission the real estate agent’s motivation may be degraded. If offered a listing real estate agents will usually take it even if their fee is reduced. At the end of the day all they want is their board displayed. But will the real estate agent then give the sale 100% of their effort? Will the Vendor get the best real estate agent?
Unlike the overwhelming majority of vendor advocates, we charge a fixed fee upon sale. For this fee, we offer more than just ‘protection’ i.e. ensuring the real estate agent does what they say they’re going to do. In addition we offer the best and most qualified independent marketing strategy advice. We firmly believe marketing is the most important variable involved when selling a home. Proof is asking yourself the following question. Would a real estate agent sell your home without marketing it? I think the answer is rather obvious.
On another important marketing note, real estate is one of very few industries where vendors basically pay for real estate agent’s branding. This is further exemplified with real estate agents now owning and receiving shares in the media they recommend. Therefore this needs to be scrutinised.
Other important benefits Vendor Marketing provides is exposing the ‘hidden’ value add in marketing and recommending the best real estate agents – saving you time and money! Furthermore we create a detailed social media campaign for your property plus we’re by the vendor’s side from start to finish.
We believe this type of vendor advocacy system avoids any conflict of interest. It ensures one acts totally independently and without bias. It also encourages the real estate agent to put their best efforts into the sale for the benefit of all stakeholders concerned. Ultimately, this is how maximum sale prices are achieved!
One word of caution. Beware of buyer advocates who also offering vendor advocacy services and vice-versa. From our point of view this is unacceptable and also highly unethical. It could easily lead to a conflict of interest. That is, where one person advises both parties in the same transaction. It’s also used as means of increasing ones revenue base. In our opinion, an advocate can only be one or the other. Not both! Vendor Marketing only represents home sellers.
The fact is the market for vendor advocacy is growing at a fast rate in Australia. Vendors can gain huge benefits from this new service by engaging a qualified independent property professional. And why not? Selling a home is something one should never take lightly. Remember, you only get one shot at it! And it’s worth getting right!
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