Are Free Valuations Bad For Business?

Why Getting Invited To Fewer Free Valuations And Turning Your Online Free Valuation Tool Off Could Be A Game Changer For Your Estate Agency Business…

Do you offer Free Valuations on your website or the window of your High Street estate agency office?

Do you class this as one of your Unique Selling Points?

If so, have you ever stopped to consider how unique this offer really is?

I mean, do you know of any agent in town who DOESN’T offer free valuations?

It’s before my time but I have it on good authority that back in the day estate agents actually used to charge potential sellers for their knowledge and expertise in valuing their home. You know, like qualified surveyors do?

But one day, some bright spark agent decided to offer a Free Valuation. All their competitors noticed how attractive this was to potential sellers. They followed suit and in no time at all, every single agent from Lands End to John O’Groats now offers a Free Valuation.

Well done. That immediately devalued the whole exercise in one fell swoop.

And sellers know what they’re letting themselves in for when they invite you across the threshold.

I’d even argue that the balance of power has shifted so much that the sellers are massively in the driving seat when they invite you round to value their home.

The sellers know that they’ll have to put up with your presentation and patter for upto an hour. Then the next agent will pull up on the drive, only to repeat the same Free Valuation Beauty Parade charade.

At the end of the day the seller will know and accept that it’s a sacrifice worth making. They’ll have a few opinions on what may be achievable if they were to sell their home, and it’s only taken up a few hours of their valuable time.

But have you ever stopped to think what the agent gets out of this??

Most sellers will only instruct one agent to sell their home (initially, at least).?

So if you’re invited out to the Free Valuation Beauty Parade alongside a couple of local competitors you’ve got no guarantee that you’ll even have the chance to list the property and earn your fee.

If you’ve got a good local reputation, you can show impressive market share pie charts or come highly recommended then you may stand a better than average chance of being successful. But it’s still something of a lottery.?

What if someone tempts them with a stupidly high valuation and an equally ridiculous low fee to win the instruction?

But you’ve got to be in it to win it – so everyone just keeps their heads down and plays the game like a good boy or girl, not wanting to rock the boat.

WHY SELLERS REALLY INVITE YOU INTO THEIR HOME

Have you ever stopped to wonder why sellers are getting these free valuations?

This might sound to you like the stupidest question ever and cause you to wonder if I have the first clue about running a successful estate agency business.?

Trust me, I do. And the more you think about it, the more I hope you’ll see that it’s not a stupid question at all.

It took me a while for the penny to drop.?

When they’re armed with the two or three valuations it only goes part of the way to actually answering the main question many sellers are asking themselves.

They want to know what they can afford. And armed with that they want to know where they can move that will solve the problems they’re looking to solve.

The valuation is a vital number but they also need to factor in what mortgage they can afford. And the prices in the areas where they’re looking to move.

It’s pretty obvious when you stop to think about it but did you ever realise that when you cheerily bid them farewell at the end of the Free Val you may be leaving them in a state where their needs are not yet fully satisfied?

And trust me, that’s not a great state for a provider of services to leave a potential client.

It means they then need to spend time doing Other Stuff to square the circle and truly satisfy their needs.

More often than not it means spending additional hours trawling the portals looking for the new home that will scratch their itch.

And chances are it also means speaking to a Financial Adviser (or at the very least plugging their details into another online tool) to see the size of the mortgage they’d be offered.

If only there was a knowledgeable professional who they could turn to, to advise and guide them throughout the whole process.

How often do you ask them about this BEFORE you turn up at the valuation appointment?

ONLINE FREE VALUATION TOOLS ARE EVEN WORSE!

Here’s my next stupidly obvious question. Ever wondered why online Free Valuation tools are so popular??

They’re popular because they enable sellers to get a good enough answer to their first question without having to break out the coffee and biscuits and spend an afternoon in the company of estate agents.?

More often than not they only need to give up their email address. Win-win all round.

In this way I’d suggest that online Free Valuation tools are responsible for further devaluing the status of the lowly estate agent.?

In the past they’ve been a little bit idiosyncratic. That’s a polite way of saying their valuations haven’t always been the most accurate or reliable. But AI is going to change all that, if it hasn’t already.

I strongly suggest you stop using online free valuation tools to capture leads. They’re doing you more harm than good.

If you’ve got one on your website you may want to disable it. Right now.

“But it provides me with a stream of leads!” I hear you cry.

OK. Are those leads any good? How many turn into actual clients? Do you even track this? What do you do with the leads once you’ve got them? How’s that working out for you?

I’m not saying there isn’t a need to capture a potential seller’s details early in the consideration process that every seller goes through when thinking about selling their home.?

I’m just 100% convinced that online free valuation tools are the worst way to go about it.

There are better ways to go about this.

CAN YOU GO FROM TOTAL STRANGER TO TRUSTED ADVISOR IN 60 MINUTES OR LESS?

Ever wondered why estate agents have got such a terrible reputation in the UK? Every year Estate Agents are ranked as one of the least trustworthy professions, not far behind politicians and those shifty ad men.

There’s plenty of reasons for this reputation – some fair, some utterly unfair.?

But I’d argue Free Valuations have played their part in this. Overly slick, salesy sofa presentations and leaving your potential clients with unsatisfied needs certainly doesn’t help.

It may be that you’ve already spoken to them about what they could afford and pointed them in the direction of properties that may move them towards the pleasure they seek or move them away from the pain they’re currently suffering.

In such a case the valuation figure is possibly the final piece in the jigsaw, rather than the starting point.?

If you’ve managed to have this conversation before the valuation appointment, well done. But from my experience I’d suggest this doesn’t happen all too often.

My main issue with the Free Valuation Beauty Parade is when sellers use this as the sole way to inform their decision about who to instruct.

From the sellers point of view, an hour in the company of someone who may be financially rewarded for winning the business is not the best way to make a fully informed, rational decision.?

That would be the case if they were thinking about a new car or laptop and it’s certainly the case if they’re thinking about the sale of their family home and their most valuable, six or seven figure asset.

And for agents, it can load massive pressure onto the person going round to provide the valuation. They’re often expected to go from total stranger to trusted advisor in under an hour.

If that’s you and you’re faced with this challenge there’s plenty of ways to combat this and stack the cards unfairly in your favour. But that’s something for another day and another blog post.

For now I just want to put the thought in your mind that you may never be able to fully escape the Free Valuation Beauty Parade. But you certainly can do a lot to minimise how much of an impact it has on the fortunes of your Estate Agency business.

WIN BETTER BUSINESS WITHOUT FREE VALUATIONS

At the end of the day, my major issue with Free Valuations is not the “free-ness” of the whole thing. That said, it’s at least worth mooting the idea that getting a potential seller to pay you for your knowledge and expertise may be a pretty good idea.

There’s plenty of benefits for doing so.

But one of the most powerful is that getting them to pay a small fee (say ￡50 or ￡100) is a financial “micro-commitment”. That small micro-commitment will significantly increase your chances of winning the ultimate prize, the Instruction.

There’s years of consumer behaviour psychological research to back this up. And there’s scores of real businesses in a host of other industries who swore blind that it couldn’t work for them but then found to their delight that it did!

But I’ll accept that charging a fee for a simple valuation when all your other local competitors are giving that information away for free may not be a recipe for a flood of instructions and instant financial success!

But there may be an opportunity to provide a more detailed and 100% objective valuation for a fee. The seller may see the value in knowing that the valuation isn’t being used as a means to win their business.

And what’s stopping you from offering something of value other than a free valuation??

There’s no Big Book Of Estate Agency Rules that limits what services you can offer your clients. And whilst you’re restricted in what you can charge tenants in the UK there are no similar legal constraints on what you can charge sellers. It’s worth thinking about.

There must be plenty of ways to deliver value to the seller before they reach the stage of putting their house on the market. You just need to find something that will appeal to your Ideal Sellers and move them closer to where they want to get (either physically or metaphorically!).?

And you could even offer to take the small fee they’ve already paid off your main selling fee when they do eventually instruct you to sell their home.

So, having explored the “free-ness” problem with Free Valuations I’ll turn my attention to my main issue. My main issue is the fact that the whole process is engineered in a way that encourages poor, short-term decision making by the sellers.

You all know ‘those’ local competitors who seem to be doing very well for themselves, despite a (completely justified) terrible reputation.?

You know deep down that you absolutely wipe the floor with them when it comes to local knowledge, first class service and marketing.?

But much to your frustration, they’re often the winners of the Free Valuation beauty parade. It really is one of those times where the good guys often come last.

Don’t you owe it to yourself to put an end to this??

REDUCING YOUR DEPENDENCY ON FREE VALUATIONS

Reducing your dependency on Free Valuations is a relatively simple and straightforward process.

Not easy, but simple and straightforward.

A crucial element of this – which is a good place to start – is shifting your agency from being ‘just another local estate agent’ to a Market Of One.

As a profession, Estate Agents are notoriously bad at differentiating themselves. I go back to my original question about whether you offer Free Valuations as one of your “USP’s” on your website.?

If you’ve avoided that one, don’t feel too smug. The same applies to “437 years of local knowledge and experience”, “Committed to first class customer service” or “We care”.

No wonder sellers base their decisions on the fees you charge.

The best selling author and marketing expert Seth Godin sums it up nicely when he says “If your customers only care about your price it’s because you haven’t given them anything more interesting to care about!”.

Next you need to accept that a proportion of your business will always come from people who go from total stranger to signed-up client in a short space of time.?

There’s nothing wrong with that and infact this should be actively encouraged.?

But you always want to get inside the heads of potential sellers as early as possible.

“But that’s what my online free valuation tool is for – getting those email addresses from people who are not yet ready to move” I hear you cry!

That would be fine if it worked.?

But do sellers really want countless “property market update” emails from multiple estate agents clogging their Inbox for months before they put their house on the market?

Notice I said “get inside the heads of potential sellers”. I didn’t say send them weekly emails.?

Indulge me for a moment whilst I go off on a tangent.

You might have a favourite musician/band, movie star or author. Hell, this even works with golf club manufacturers.

When that musician, movie star, author or golf club brand brings something new out, if you’re a fan, chances are you’ll become aware of it (even if you don’t subscribe to their email list). More often than not you’ll then check it out or even rush straight out to buy it.

It’s because that person or thing has lodged itself deep into your brain. If they’re sufficiently unique, memorable and you clearly connect with them on a deeper level it can be months or years since your last interaction with them…but you’re drawn back to them like a moth to a flame.

As I said to a client the other day, Frank Sinatra gets over 3 million music streams a day but I don’t see him grinding away, putting out content.

Are you starting to see where I’m going here?

BE REMARKABLE

So in some ways, reducing your dependence on Free Valuations (both in-person and online) is only half the story.

If you’re going to wean yourself off them, one of the most important things you need to do is to become remarkable and memorable to your local ideal sellers.

Relax! That doesn’t mean you need to spend hours posting on Facebook or dancing like a twat on TikTok. Clearly you’re going to have to get your message out there – but I very much take a Quality rather than Quantity approach.

The key thing is to be remarkable, inspirational and enlightening.?

And what’s the definition of remarkable? Being sufficiently interesting that people proactively remark about you!?

And I don’t mean “Did you see Blah De Blah Estates just won Best Local Agent at the ESTA’s” because real people will never, ever say that.

It’s about having a real point of difference. It’s about saying something that makes your ideal sellers sit up and notice and lodge you in their memory. It’s taking a position or stance that you know may attract some and equally repel others.?

You should think about the process your ideal sellers go through when considering putting their home on the market.?

You should think about the fears and concerns they have. You should write a list of their false beliefs that might be making the whole thing a lot more difficult than it needs to be. God Forbid you could even speak to a few of them.

Once you’ve thought about that you’re in a much stronger position to Be Remarkable with insightful, enlightening, inspirational content that doesn’t just add to the noise.?

WHICH LEADS ME TO…

Let’s not forget the whole point of all this is to generate high quality seller leads. Leads that will convert into Instructions. That will result in sales. Because that’s when you get paid.

And I’m 100% convinced that you stand a much better chance of success if you’re the only agent at the table rather than one of a handful of random, unknown agents, all invited to pitch their services.

Reducing your dependence on the Free Valuation Beauty Parade and instead becoming the only agent at the table is a vital element of changing your fortunes for good.

So would it be useful to go through an exercise where you can quickly estimate the impact that changing your marketing approach might have on your business?

I’ve developed a “Lead Pipeline Calculator” where you plug in a few key figures that you’ll already know about your business.?

Don’t worry if you don’t have exact data to hand, rough estimates/best guesses will be fine.?

It’s really quick to fill it in – it will take you less than 2 minutes to complete.

Then in 24 hours you’ll get to see what you could be realistically adding to your pipeline 90 days from now, after making a few changes to your marketing approach.?

It can take up to 24 hours to get your results because you’ll get a fully personalised estimate based on your answers – not a general, vanilla PDF or even an automated scorecard where you get a few random percentages and one-size-fits all ‘advice’.??

You can access the FREE calculator by clicking the Go To My Website button near the top of my profile