The first step to maximising your profit is to increase your selling price.
But once you’ve done everything possible to increase your price, the only other way to maximise your profit – is to reduce your expenses…
1. Avoid fundamental mistakes and traps.
Just like we spoke about in “How to increase your selling price“… Some of the biggest losses to sellers – are due to making ‘fundamental mistakes’. They’re often what we call “hidden losses” – meaning you don’t even realise you’ve dropped thousands of dollars.
Unfortunately, most of the traps are laid by the traditional real estate industry. So our first role is to protect you from them. The best protection, is to avoid them in the first place. To do that, you need to be aware of them.
This is why we wrote the book – “The Common Sense Approach to Sell Real Estate”. To open your eyes.
In it, we expose 24 real estate truths. Truths traditional agents would rather you didn’t know.
2. Eliminate Unnecessary Expenses
“Any expense that doesn’t ‘add value’… is simply eroding your profit.”
The traditional real estate industry is massively inefficient and unfortunately it’s you (the consumer) who pays for it.
Take newspaper advertising as just one example…
Traditional agents will try and sell you on the need for “More” or ‘Bigger” advertising. They’ll claim that bigger advertisements will get you a better price – which is ludicrous. There is absolutely no evidence, to even suggest, that a bigger advertisement adds any value to your property. Like a buyer is going to think to themselves … “those sellers had a full page advert – I’d better offer them another $10,000″… as if.
Agents even spiel that… “more ads will attract more buyers” … which when you think about it, is also a falsehood.
Surely they don’t expect you to believe that the number of buyers in the market is in any way linked to the amount of advertising being done? That doubling the amount of advertising will somehow magically double the amount of buyers? Of course it won’t.
Smart sellers understand that there are only so many genuine buyers in the market at any point in time. Which is affected mainly by economic factors. The amount of advertising has nothing to do with it.
Here’s the facts:
- In this day and age approximately 85% of buyer enquiry comes from the internet. Yet the real estate industry spends 85% of it’s marketing in old fashioned print media.
- This unnecessary advertising is being done primarily – to increase the profile of the agents.
The trick with advertising, is to use modern smart marketing, that attracts all the buyers at a fraction of the cost.
Anyway, enough ranting. Hopefully you get the idea… The way the traditional real estate industry works is inefficient and therefore expensive.
The question is…
How can you eliminate those unnecessary costs?
It comes down to being able to control your expenses. And the biggest expense when selling your property is the…
3. Selling Fees
Traditionally the real estate industry charges you a “Commission” – usually a percentage of the sale price of your property.
We recommend you read these two articles to understand more fully how commissions really work….
But if you are short on time, here is a brief overview. In addition to creating a ‘conflict of interest‘ …
- Commissions are the main reason why it costs so much when you do sell.
- Genuine Sellers subsidise the Non Sellers.
- Higher priced sellers pay more for the same job as lower priced sellers.
And, the one we’ll now dig deeper into…
- Commission removes your ability to reduce your expenses.
Consider two neighbours with properties worth around $400,000…
Ken and Barb accept ultimate responsibility for selling their property. They understand that their actions and decisions affect the outcome. So present their property at it’s best and price it realistically. Within two weeks they get multiple offers and sell for a premium of $400,000. They were dream clients. Their agent only outlaid $800 in expenses and 7 hours of direct work on their behalf.
Mike and Clare on the other hand accepted no responsibility for the sale of their property. They put little effort into presenting it well and were unrealistic in their asking price. After 3 months of constant advertising, open homes every weekend & turning down two fair offers… they finally relented and accepted a sale at $400,000. The agent outlaid $3,500 in expenses and 20 hours of direct work.
Yet because of the traditional commission fee structure Ken & Barb had to pay the same fee as Mike & Clare… around $14,000
Now if you’re like Ken & Barb… are serious about maximising your profit – you’ll be interested in another way of doing things…
Consultancy based fees:
Similar to how you would engage any other professional service provider.
Rather than paying a commission based on the value of your property – consultancy based fees reflect the actual expertise, time and outgoing costs involved in servicing just your needs. In other words, if your property sells in a week, you only pay for a weeks work.
It’s simply a more efficient model.
- You only pay for the work and advertising done on your behalf.
- You’re not supporting the time and effort salespeople spend Prospecting.
- You’re not paying a premium for having no risk.
In addition, it gives you some significant advantages:
- You have more control over the selling process.
- It removes the agents ‘conflict of interest’ created by the traditional ‘commission-only’.
- It enables you to reduce your selling costs and therefore increase your profit.
So lets go back and have another look at the two neighbours… Ken & Barb vs Mike & Clare.
Under our consultancy based fee structure…
Ken and Barb’s fee would have been around $7,000 (including paying us a bonus for saving them so much).
Mike and Clare’s fee would have been around $14,000
Like anything in life, ultimately you can choose which way you want to go. ‘Commission-Only’ or ‘Consultancy’ based fee?
In the mean time take a look at some case studies and meet some of our clients who have banked thousands in extra profit.
Graeme & Kay saved $10,822
"We would recommend the Restate System
to anyone considering selling their property."
"It gave us increased confidence that the agent was indeed acting on behalf of the vendor...Our clients saved an estimated $8,800 in fees as well."
"It was just common sense to pay for a professional service rather than a flat commission rate. This was followed up with professional & honest service, with frequent & open communication from the whole team at Restate”
Ali & Bob
"We sold our property for $7,000 over asking and saved $9,877 in fees - thanks Restate"
Ross & Delwyn
"After having various Real Estate agents around we decided to put our trust in Restate to sell our house.....we saved heaps in Real Estate fees and got a good price for our house."
"If you want to save some serious money I would highly recommend the Restate new model - you won't be disappointed. I saved $5,759 under their new way of marketing."
"We would recommend their new model to anyone, it's more transparent, you are more in control of the processing and the savings are significant compared to the traditional model”
Simon & Angela
"The price advantage was realised & we enjoy the fact that we have only paid for service required to sell our house. Nothing more, nothing less. The thing that really impressed us though, is the service & support.”
"Restate's flexible approach results in a more individualised plan when selling your property and a better sense of control over the process."
Ross & Kit
"Restate had great options as to what method would work best for me to sell my home using the most cost effective method. Thanks Restate for a wonderful job well done, achieving great results for me.”
"When you're ready to sell your home there's no doubt you should give Restate a call first, if you're serious about keeping more of your hard earned money in your pocket. "
Dale & Tina
"They worked with us & put our interest at heart. It wasn't all about their own profile & them getting paid a huge commission. That's what we liked about this new model.....but also saved us $9,000 in fees”
Penny & Trevor
"With their new model, Restate saved us $1,440 compared to traditional fee structure. I would highly recommend the team at Restate if you are serious about selling your property.”
Andrea & Traceylee
"Adam worked very hard to achieve a sale & kept me well informed, he always had a smile & very positive throughout the whole process.....and saved $2,000 in fees.”
Leanne & Kevin Weastell
"Their new fee structure saved us $4,900 more than traditional fees. This meant we ended up with a bit extra & could comfortably buy our new home without touching our savings."
Frank & Val
"They offered advice when needed, kept us up to date with progress & guided us through the quick & efficient sale of the home."
The Bennewith Family
"What a great experience it was selling with Restate. My view of real estate agents has now changed for the better.”
"We have been very happy with the professionalism of Carl & his staff & are exceptionally happy with nearly $3,500 savings in fees."
Graham & Lyn
"This saved as $4,000 compared to the traditional model. We found them reliable and Adam kept us informed at all times."
Orcilla & Corrie
"I would highly recommend Restate, and they also saved me $1,937 compared to traditional fees"
"I am pleased to recognise the excellent service by Restate in selling our house and acknowledge their new approach to fees represented a saving in the order of $7500”
Jeremy & Ann
"We could see the benefit in their innovative new real estate model. Ultimately this saved us over $4000 compared to the traditional model”
"The property sold within the sales strategy time frame and we saved $2,689 by utilising the new fee model. ”
"We sold & went unconditional in 4 weeks. This saved us $7,000 - $10,000 on the traditional real estate model..."
Liz & Marty
"We had a fantastic time selling our property with Restate....they were open, straight forward & most importantly, honest.”
Annie & Brian
"We were impressed with a quick sale and saved $5,000 compared with traditional real estate fees..."
Pam & Murray
"With this new approach to the selling process we saved over $6,000!! We could not have asked for more when it came to being kept up..."
"The new marketing plan certainly worked for us and also saved us a considerable sum of money."
Mr & Mrs Millar
"Restate sold our home in 8 weeks which meant we had a saving of $11,280 on the commission."
Colin & Raewyn
"... A newer approach which I firmly believe is way fairer to both agent and vendor..."
Stephen & Sarah
"I've sold 8 houses to date through agents and you have been the best agency and I find your new model acceptable where as I normally find the traditional fee structures offensive"
"My son and I decided to go with the old model, we realise now that we could have saved over $3000 had we used the new model. We are still very happy with the quick result."
Mary & Mark
"... they helped us achieve a quick sale with maximum return... With their new fee structure they were also able to save us money in real estate fees..."
"I decided their new model to be a good opportunity to sell my property in the shortest possible time... As I had a tight budget it proved very successful, I saved $1,414”
"We were kept informed of the progress every step of the way even though we lived in W.A. By using their new structure we saved $3,500. We are very happy with the results.”
Shulay & Grant
"Thank you Liz & Adam for selling our house under Carl's (Restate) new structure. We saved enough to pay our solicitors fee for selling and buying our new home.”
Ewen & Gale