Missed the first blog? Read it here.
I have known Simon for many years and whilst I was never a client of his, or part of the “estate agency in-crowd”, we struck up a friendship whereby I benefitted from Simon’s unrivalled (an agency term if ever you heard one) tech knowledge, his little black book of industry contacts and, whilst he tries his hardest to hide it, Simon’s incredible business brain. In return, I challenged everything Simon ever said based on my position as a hungry estate agent. This allowed Simon to revisit how said product would need to be delivered or changed to overcome whatever objection’s I had made in order to attract similar agents – a less technical version of Facebook look-a-like audiences.
In return for never having to appear on a podcast or go out drinking with Mr. Whale, I have agreed to write a series of blogs for kerfuffle which will hopefully provide some value to agents. I’ll be sharing what I consider to be ‘good habits of good agents’.
In 1996 when I joined the industry both lettings and financial services were hidden away in the corner of the office, often closing Saturday afternoons and merely someone you referred business to if a customer enquired. Over the years we have all come to the realisation of just how important both functions are and now - in the great businesses I think the revenue is derived equally from all three services. In fact, Peter Knight from Property Academy even suggests “property management should come first, second and third. And then sales.” I agree with him. If you missed my first blog you might want to read it now - the figures I share in it explain why I feel this way.
So here is your take-away from this blog and it’s worth £33,000. Ready?
It’s associated with my belief that in most agencies sales and financial services work hand in hand, but lettings rarely make a success from financial services. This is ridiculous of course because letting agents have a captive audience of landlords who they have already gained the trust of and have far longer relationships with compared to the relationship between sales negotiators and applicants.
There are lots of ways you can encompass financial services into your lettings business but for me, the easiest wins will come from landlord remortgages.
We could all argue about the key time to approach this subject but for me, the key time is at the point of renewal of fixed term. Why? You need a process to make anything work over an extended period of time and renewal is certainly an action that requires a process. Therefore rather than create another task, add it to the renewal process. But it’s also a point in the journey where you have a requirement to speak to a landlord so it’s not a cold call or sales pitch - it’s a time where you can create value and WOW a landlord without much work.
Does this conversation sound like one you could be having?
“Mr/s Landlord, based on all of the information I presented to you [comparable documents, etc] I feel we could ask for a rent increase of £100 a month. Whilst that may sound great, how would you feel if I could actually turn that into £300 a month? Let me explain how.
“A few months ago I was speaking to a landlord and for a number of reasons, it was agreed that the rent should stay the same. In conversation, she mentioned that she always re-mortgaged every couple of years to make sure she got the best rate which would help her generate the best returns, after all, it was an investment. I offered to pass her onto a mortgage broker and thought nothing more of it.
“A couple of weeks later I received an email thanking me, saying that whilst we were unable to increase the rent, the new mortgage deal was £200 a month cheaper and therefore far better off even without the rent increase”.
Since I had the above conversation I have been mentioning it to all of my landlords and you would be amazed at how many not only take me up on the offer but also save hundreds of pounds – “There are some fantastic mortgage deals out there, when shall I get XX to call you?”
Now I was never the greatest salesperson and I’m sure many of you will be able to write far better scripts, but my point is this:
How many of your property management landlords have mortgages?
How many need this service?
How would this revenue impact your lettings business?
The average commission paid out by MAB for a buy-to-let remortgage is £300 on a 2 year fixed rate, and ARLA suggests that the average letting agent has 221 properties under management. So ,the average agent has a £33,000 PA opportunity in their lettings book for changing one process.
Don’t miss the next blog in my series – register here