How Are Your Customer Service Skills in Real Estate?

What are you doing as a professional to know your customer better? 

This is a key component in driving better engagement and more business.

Many times we think service is a one size fits all concept and it isn’t. 

Customer service should cater to the customer even if that means it is “tailor made.”  

You should have a unique and proverbial profile picture of each customer.

Today we will discuss different aspects of knowing your customer and driving the business that caters to them.

Let’s get started.

Introduction

Before we get into what engagement looks like and how it will cater to the customer, we have to set the tone.

In your initial contact with any client, you are setting an expectation of professionalism and expertise. 

This sets the groundwork for what the next interactions may look like and what the customer can expect from you.

It is key to communicate with positivity, professionalism and customer catering based upon their needs. 

The application of your expertise will show as the conversation progresses.

Asking the right questions, and taking heed to context clues to help align what will help the customer best, should be assessed during any dialog. Be sure you are applying this so you understand your customer in any initial conversation. The sooner you comprehend their needs the better.

Gaging The Best Application of Service

In real estate we come across several customers that may be confused on what to expect. Many customers do not know there are several different cash buyers. 

When they hear about the buyer paying cash, they likely have a low comprehension of the cash buyer types possible.

• There are cash buyers who are home owners who have the cash, whether it be from their own savings or whether its from their company making a corporate purchase for a relocation. This has common as of late, due to COVID-19 as more and more people are working from home (or being granted the ability to work from home). These could be high level executives or upper level management who are eligible for relocation packages. 
• You also have cash buyers who could be purchasing with hard/private money.
• You also have cash buyers who are buying with their own cash. 

Here we have 3 different buyers and the seller likely is not familiar with each when thinking “cash buyer”.

They just know, some other home owners have sold their houses for market value and they received cash offers. Each of these cash buyers will have large variances in their offer.

Therefore, when they say they want a cash offer, they are not thinking about the variance in buyers they are presenting interest to. It is up to you as the professional to help them understand the difference.

Buyer Types

Buyer types can also apply to many layers of investors and homebuyers. Let’s list them all out.

• Investor – Flipper – Will use hard or private money in most cases and will have the most line-item costs. This investor needs the lowest purchase margin for the investment to make sense.
• Investor – BRRRR (Value Add) – Will use hard or private money in most cases and will have less line-item costs than the Flipper. Due to the refinance, the margins are higher then the Flipper’s. This investor can purchase at a higher margin than the Flipper.
• Investor – Buy & Hold (Value Add) – May use a bridge loan or long term loan depending on if the value added requires construction or operational improvements. Due to the increase in the down payment for this buyer, and the income that the asset produces, the margins are usually slightly higher then what the BRRRR investors will pay.
• Investor – Buy & Hold (Turnkey) – Usually this investor will use long term loans that require the highest down payments of all other investors. This causes the asset to cash flow better than any other acquisition method and the income is usually already at peak levels. These properties usually require little to no work and are already performing well. This investor can purchase at a higher margins than the buy and hold-value add investor.
• Home Owner – 203k or HomeStyle Renovation Loan – For a asset that requires renovation, this buyer will provide the highest margin of purchase potential. The margins here are higher because the buyer has significantly less line-item costs then the Flipper of BRRRR investor.
• Home Owner – House Hack – Here is an owner that could potentially pay significantly more, due to the level of income that will be created when the owner rents other eligible space in the property. This income usually covers the mortgage and possibly more. Market value can certainly be met if not exceeded by this buyer depending on their source of funds. 

Take heed to these buyer types to align the best potential service to your customer.

The Construction or Renovation Customer

Knowing your customer, doesn’t just apply to buyers and sellers of property. 

I often see that the level of intellect on customer types and what suits them best, is often missed by contractors as well. 

In a similar comparison to buyer types, recognizing your customer type in construction, is also important to understand how to service them best.

There are several different customer types and if you are wise, you will cater to that customer and balance your operation around the customer types.

What consumers and some contractors fail to realize is that there is a huge variance in eligible pay based upon the customer. 

It has nothing to do with ill intentions, but can be misunderstood easily by either party. Let’s display a few examples.

Customer Types 

Investor –

Investors are looking for your costs to be at the lowest tolerable levels of profit margin.

This doesn’t mean the investor is trying to short change you, it means that they need you to know how to operate an effective operation with the least amount of waste.

Time and performance is of the essence. If you cannot perform to expectations and still make profits, this customer is not for you.

Your teams capabilities to work efficiently as well as the general contractors management skills, has everything to do with this operation being successful. 

Home Owner –

Home owners are prepared to pay more for expertise, being that they may have a very specific outcome in mind.

This means your tasks may need to be more meticulous and exact. When this happens, finer attention to detail cold be required.

If you are not the expert at your craft, you should not be servicing this customer. However, some home owners may not be as meticulous and will just want something updated.

However, in these circumstances, there are usually more obstructions with completing tasks which can effect time to completion due to having occupants.

With the complexity of these jobs, usually premiums should be at a higher cost. Your profit margin should be slightly higher here compared to the investor’s.

Corporate Contract –

Work environment can vary widely in corporate environments. You may need to work around the daily operations of the business or the site could be vacant.

However, with a corporate contract, these are jobs that are always associated by assigned budgets according to the amount of funds the corporation has open for this line-item.

Being that corporate budgets change yearly based upon yearly profits and losses, the margins for the same scope of work could be much different then the home owner or investor.

Usually budgets are much higher comparatively. This type of customer can provide longer project lengths and higher profit margins then both investor and home owner clients.

Insurance Claim –

Insurance is all about liability. When liability is at stake, there is usually no stone that is unturned.

So any and everything, that could have been comprised, is tallied in the projects’ scope of work.

These budgets will be the highest by far, allowing the highest profit margin for the contractor.

Take heed to these customer types to align the best potential service to your customer.

Conclusion

As you can see, knowing your customers so you align the highest level of engagement and service is all about your comprehension of your market and customer.

It is up to you to balance your work load according to what you have expertise in, or where you’d like to see the bulk of your business efforts stem from. 

Create the balance you desire and service your customer.

We hope today’s article has been helpful for you. Thanks for joining us faithful readers – future leaders.

Love ya and keep striving for growth.

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Please comment how you apply your knowledge of your customer to provide better service.