Three easy ways to beat ‘but the other agent will do it cheaper’

Thursday, November 16, 2023

(Suggested Reading Time- 5 minutes)

Response One – ‘Fees Adjusted to Service’

Response Two – ‘Matching Services’

Response Three – ‘Poor Negotiation Skills’

Discounting is rife in every marketplace!

When we’re speaking with PM businesses across Australia, New Zealand, and the USA we are consistently hearing about ‘the agencies down the road doing cheap management deals’.

Just about every agency thinks they’ve been placed in the worst discounting region on the planet!

The problem isn’t unique! It’s been around for a long time.

The solution is in the way you RESPOND to discount requests.

Here are THREE ways to deal with the common response: ‘But the other agent will do it cheaper’ or ‘But the other agent will give a discount’.

Response One – ‘Fees Adjusted to Service’

“Mr. Smith, thanks for bringing that to my attention. We are aware of what other agents are charging but they know what our charges are too!

Despite knowing our fees, they also know that they cannot compete with us on our level of service so they have simply adjusted their fees down to their level of service.

An agency’s fees are a really good indicator of what level of service you can expect because they always represent what they believe their service is worth.”

Response Two – ‘Matching Services’

“Mr. Smith, if we did lower our fees to match our competitors we’d only have to be fair and lower our service levels to match theirs too. Alternatively, we could leave key parts of our service out. But that would cause problems.

Typically we know other agents are not returning phone calls and emails, not doing required repairs, not taking action on late rent in a timely fashion, and not screening tenants thoroughly.

That’s the type of service you’ll get with cheaper agents. Because of the problems, this causes we are unable to lower our service levels, and therefore we cannot lower our fees to suit.

We are consistently having owners call us upset with the service they’re getting from cheaper agencies, happy to pay just a little bit more because they’ve realised in the end it’s not cheaper fees they want but peace of mind.

Response Three – ‘Poor Negotiation Skills’

The third response to consider is in the case where the other agent has discounted their fees to impress the prospective client. This script is a classic sales script tweaked to suit.

Consider this script:

“Mr. Smith, if the other agent was quick to panic and drop their fees, what does that say about their negotiation skills and their ability to get you the best rent if the tenant requests a discount?

You need to have the best negotiator for your rental income, and that’s why you can have confidence in us. So, of course, we charge the fees we need to give you the level of service you want and deserve.”


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