Buying or selling a house is an experience that starts before someone meets their Realtor and ends at the settlement table.
A psychological heuristic called the Peak-end theory teaches us exactly how to manage this experience to have the happiest clients. Here’s the crazy thing: it’s not all up to you.
Despite how hard you work, how good you are or how much your clients like you, their impression and memory of their experience working with you will be dictated by moments that
are not in your control.
However, there are things you can do about this.
This science proves that what your client thinks of your performance
is in someone else’s control.
Specifically, the title company. I know that sounds extreme and even self serving. It’s science,
people. Seriously.
I’m going to explain
➔ What the Peak-end theory is and what it means for you
➔ The math behind how it affects your paycheck
➔ What you can do about it
The Peak-end Theory
Have you ever heard of something known as ‘recency bias’?
It’s in the family of Peak-end Theory. The result of many studies shows that when people are asked to recall experiences from a meal to running a marathon or buying a house, they mostly remember the end. The most recent thing – even if it’s only a small part of the entire event – is what people judge the entire experience by.
Peak-end Theory is similar. It tells us that in an experience like buying real estate, people won’t remember their experience as being good or bad based on the hours, days and weeks through it. They’ll only remember the peak of intensity and the end.
Say that aloud and think about what that is for your clients and how they remember you.
The Peak: Often this is the offer, whether it’s a listing or a buyer. The negotiation, the terms and the lead up to a duly signed agreement of sale can feel like the culmination of weeks or possibly months working together. But don’t confuse your experience with theirs. They’ve only just begun. This could be a peak for them, but it might not be the peak and it’s certainly not the end.
The End: The end of the home buying or selling experience is clearly settlement. From the time any property goes under contract until settlement, there’s a lead up of activity that gradually increases in frequency and intensity. Before contract, your clients typically only dealt with you. Now, they’re dealing with several other parties: loan officers, processors, appraisers, inspectors. After contract, the title company has the most frequent contact with your clients and the power to control the end experience (this could also be the peak) more than anyone, including you.
The math behind how it affects your paycheck
Let’s say you close 24 deals this year. And let’s assume you’re the master at follow up and asking for referrals. And let’s say you have a great relationship with someone at Ye Olde Title Company. They’re responsive and they do a great job delivering title and closing with the same tools that pretty much every other title company uses.
The biggest (by far) consumer complaint in a real estate transaction once under contract is people don’t know where they are in the process and what comes next.
Ye Olde Title doesn’t collect client ratings and feedback at settlement. They’re available and responsive, but buyers and sellers often don’t know what to ask. Ye Olde Title is like a cab driver that’s on-time and really nice, but doesn’t have an app to tell them where he is or when he’s coming and makes them pay in cash. It feels great compared to what you’re familiar with; but you don’t know what could be.
So let’s say with Ye Olde Title Company, 17 of your 24 people are happy. And when you follow up with them over the weeks and months, you’re able to get 4 of them (25%) to refer 2 people to you. That’s 8 referred clients, or 33% of your business this year.
Imagine if managing the end experience with vigor resulted in just a little bit better numbers. Imagine if they had that app to tell them where they are and what’s next. And proactive text message notifications. And money for settlement felt like Venmo with the highest security available. And they were asked – at the peak time of happiness – to rate their experience and share it with the world. And that was tracked and promoted.
So, let’s assume all the End Experience efforts resulted in only 2 more happy clients and one point more happiness overall. And the promotion of their shared experience resulted in one more referred client for you.
If an average referral is worth $8,750 in your pocket, with the same results going forward over the next 5 years, you’d yield $1,428,600 more.
Heck, even if managing the End Experience yielded you one more referral in year 1 and increased the rate of referrals going forward at the same pace, that would land you 105 more deals in the next 5 years, worth $918,750 in your pocket.
What action can you take
The fact is, a Realtor is simply not in control of the end experience from contract to close. In today’s real estate transaction, there are many cooks in the kitchen at this stage. To secure the perceived experience, someone needs to step up and manage it.
The title company is the party to do this and this is how anyone that chooses a title company should be making that decision.
Choosing a partner to manage your client’s experience from contract to settlement is one of the most valuable things you can do for your career.
Your title company controls the End Experience more than you even do, and this can make you millions of dollars or take that money from you. Understanding this should be the number one thing you think of every, single time you work with a title company. Be fanatical about who touches your clients and how they touch them at the peak and at the end and your career and bank account will show it.
What TitleEQ does to ensure the End Experience
The best cab driver in the world can’t compete with Uber. A clean car and a helpful, nice driver is no longer a match for me controlling my feelings about the experience.
I want to know where the car is while I wait and I don’t want the driver calling me every few minutes. I want to look at the map and know.
I want payment to be convenient and automatic, I don’t even want to take out my wallet at the end.
I want to choose the type of car, size, luxury or economy. I want it fast, and I don’t want to stand out in the rain waiting for it.
TitleEQ delivers an experience through people with the help of our technology that can not be matched by even the best people alone. Knowing that the End Experience makes a massive difference in your level of success, you can’t afford to not choose the right partner.
Imagine if everything post Contract felt truly like calling an Uber.
- Total visibility of all of your settlements and progress on an app on your phone
- Signing and sharing pre-settlement documents on the same app with your fingers
- Buyers sending EMD and money for settlement through their phone
- AI behind the scenes = faster time to close, better decisions, less headaches with title
- Pushing your clients positive feedback directly from settlement to increase your referrals
Tesla for the Title Industry
For decades, auto manufacturers worked within the subconscious confines of what they believed to be true: a car has a gasoline engine, brakes and needs a person to drive it.
Companies and people tend to not realize the rules that they assume are true, don’t have to be. Cars don’t have to eat gas. Music doesn’t have to be a physical record, tape or CD. Advertisements don’t have to be 30 seconds long for TV, they can be shown in product placement or with influencers.
Real Estate has been extremely slow to evolve and the experience hasn’t improved much in large part because of title companies’ self imposed limitations.
We’ve rewritten what it means to evaluate title, clear debts of a property and prepare for settlement that people alone can not compete with.