English
Real Estate Service Excellence: Objectives, Value, and Integrity
Purpose: The purpose represents the main goal the real estateโ agent seeks to achieve on behalf of the client. It answers the question, “Why should the client hire me?”. The goal should be clear, specific, and measurable.
- For the Seller:
- Achieving the highest possible return for the seller in the shortest possible time, while minimizing potential problems.
- Measurement:
Net Profit = (Sale Price - Commission - Expenses) / TimeNet Profit: Net profit for the seller.Sale Price: Final sale price of the property.Commission: Real estate agent’s commission.Expenses: Other expenses related to the sale.Time: Time taken to complete the sale.- Example: Sale Price 1,000,000 riyal, Commission 2.5% (25,000 riyal), Expenses 5,000 riyal, Time 30 days,
Net Profit = (1,000,000 - 25,000 - 5,000) / 30 = 32,333.33 riyal/day
- Influencing Factors: Pricing strategy, marketing quality, negotiation skills, risk management.
- For the Buyer:
- Helping the buyer find the right property at the best possible price, in a timely manner, while minimizing potential problems.
- Measurement: Property matching buyer needs, price compared to market value, time to find property and complete the deal, buyer satisfaction with ease of procedures.
- Influencing Factors: Understanding buyer needs, market knowledge, negotiation skills, risk management.
- Theory: Related to Value Theory in economics, maximizing value for the client (seller or buyer).
Value Proposition: The value proposition is the specific set of services offered by the real estate agent to the client, exceeding simply completing the transaction.
- Value Proposition for the Seller (10 key areas):
- Needs Analysis: Understand motivations for selling and timeline.
- Pricing Strategy: Determine best pricing strategy based on market conditions and provide expected net profit sheet.
- Preparing the Property: Advice on necessary repairs and improvements, and staging strategies.
- Marketing Strategy: Develop a comprehensive marketing plan and timeline.
- Receiving Offers: Evaluate offers.
- Negotiating the Sale: Negotiate counteroffers and advise on final terms.
- Sale: Prepare post-contract task list and advise on repairs and vendor services.
- Preparing for Closing: Coordinate and supervise document preparation and provide pre-closing consultations.
- Closing: Review closing documents, resolve last-minute issues, and complete the transaction.
- Post-Closing: Coordinate the transition process and assist with post-closing issues.
- Value Proposition for the Buyer (10 key areas):
- Needs Analysis: Analyze buyer’s desires and needs.
- Pre-qualification/Pre-approval: Guide buyer to loan officer and obtain pre-qualification/pre-approval, assist in selecting the best mortgage financing plan.
- Neighborhood Information: Create a broad neighborhood search profile and provide a list of target neighborhoods and relevant information.
- Home Search: Organize and schedule home search, continuous updates, site visits, and show available homes.
- Making an Offer: Compare homes, make a decision, advise on offer terms and issues, and complete a purchase offer contract.
- Negotiating the Purchase: Present the offer and negotiate on behalf of the buyer.
- Vendor Coordination: Advise and oversee vendor selections, coordinate vendor services.
- Preparing for Closing: Coordinate and supervise document preparation and provide pre-closing consultations.
- Closing: Inspect closing documents, resolve last-minute issues, and complete the transaction.
- Post-Closing: Coordinate the move to the home and assist with post-closing issues.
- Theory: Related to Marketing Theory, especially Service Differentiation, distinguishing services from competitors by offering unique and tangible value.
Fiduciary Duty: The ethical and legal obligation to place the client’s interest above the agent’s own.
- Elements of Fiduciary Duty:
- Loyalty: Place the client’s interest first and avoid any conflicts of interest.
- Disclosure: Disclose all information related to the property or transaction, whether beneficial or detrimental to the client.
- Confidentiality: Maintain the confidentiality of client information and not share it with third parties without consent.
- Accountability: Take responsibility for actions and decisions made on behalf of the client.
- Reasonable Care: Exercise due care and effort to represent the client’s interests in the best possible manner.
- Examples of Breaches of Fiduciary Duty:
- Failure to disclose material defects in the property.
- Representing conflicting parties in the transaction without consent.
- Obtaining a secret commission from a third party.
- Using confidential clientโ information for personal gain.
- Theory: Based on Agency Theory, defining the relationship between the agent (real estate agent) and the principal (client) and defining the agent’s duties towards the principal.
Chapter Summary
This chapter from the training course “real estateโ Services Professionalism: Standards of Success and Professional Ethics” addresses the standards of excellence in real estate services, focusing on three main pillars: Purpose, Value Proposition, and Fiduciary Commitment. Sustainable success requires providing high-quality service focused on the client’s best interest.
Purpose: Distinguished real estate agentsโ have a clear understanding of their profession’s purpose and can communicate it effectively. For sellers, the purpose is to achieve the highest possibleโ financial return in the shortest time with the least amount of problems. For buyers, the purpose is to find the right home at the optimal price and on time, while avoiding potential problems.
Value Proposition: Distinguished real estate agents translate the understanding of the purpose into a specific set of services offered to clients, called the “value proposition.” The chapter provides a list of ten key service areas for both sellers and buyers. For sellers, these areas include needs analysis, pricing strategy, property preparation, marketing strategy, offer evaluation, negotiation, pre-closing preparation, closing, and post-closing. For buyers, they include needs analysis, pre-qualification for a loan, providing information about neighborhoods, searching for homes, submitting offers, negotiation, coordination with sellers, pre-closing preparation, closing, and post-closing.
Fiduciary Commitment: Commitment to professional ethics and trustworthiness is at the core of distinguished service. Distinguished agents always put their clients’ needs above all else. This commitment is the foundation of trust and integrity that builds long-term relationships with clients.
Conclusions and Implications: Achieving excellence in real estate services depends on a deep understanding of clients’ goals, providing tangible value through a specific set of services, and adhering to the highest standards of trustworthiness and integrity. Adopting these three standards (Purpose, Value, and Fiduciary duty) leads to building a strong reputation, increasing customer satisfaction, and achieving sustainable success in this competitive field. The importance of employing a highly competent and accountable team, and setting clear performance standards is stressed to ensure the continued delivery of outstanding service.
