Our top seven hidden costs that come with cheap real estate tech

I'll go with the cheaper agent - he said he’ll give me a discount...”

Bargain hunters. You know the type. When a prospect tells you that they’re going with a discount agent who’s willing to shave 0.75% off his comms, what runs through your head?

1. The late night negotiations to squeeze an extra thousand dollars for the seller
2. The Sunday private inspections
3. The cleaners you organise before an open home
4. The way you tailor a marketing strategy to the current market and target buyer
5. The little extras you provide… 

You don’t discount your commission because you stand behind the quality of service you provide. It’s the same thing with CRM providers. 

Considering a low-cost CRM? Read this before you sign anything. 

Cheap v Affordable

Cheap real estate CRM refers to services that skimp on quality in favour of a lower price. “Cheap” is good for your wallet in the short term, but actually harmful to your business in the long run. 

Businesses that offer CRM systems like this are generally running on a “churn and burn” business model. They need a high volume of agencies like yours to use their services, but because they need so many clients to stay afloat, you receive little to no attention or support – let alone new features and system updates. There’s certainly no frills. Often, you’re signing up for a stripped back version of a paid product. 

Affordable CRMs, on the other hand, provide services at a competitive price. The important distinction between “cheap” and “affordable” is that, while both imply low costs, affordable CRM systems do not compromise on quality. For a reasonable amount of money, an affordable CRM will provide a CRM system that actually adds value to your business. 

Still not convinced? There’s more… 

The top seven hidden costs of cheap real estate tech

1. Replacement cost

This one’s obvious. If you choose the wrong CRM provider, you’ll ultimately need to replace it. Your agency could be required to pay early termination costs. Not to mention the fact that you’ll need to get all the decision makers in a room again… yikes. 

2. Third party product costs

There’s nothing wrong with using third party products to extend your CRM’s capability – in fact, we’re all for it! That’s why our API is as open as possible.

But not all platforms work the same and sometimes there are hidden costs that arise. Thats the last thing you want when you are adding on products to solve a need that could’ve been solved by a better CRM. For example, if you choose a CRM that can’t handle your trust accounting, you’ll need to use another system and build an integration with your CRM. 

These extra costs could include the product itself, the integration, ongoing maintenance and admin costs – but that’s not all. Time costs can start to rack up when problems arise in data discrepancies and sync interruptions between the two products. You may find the best solution for your agency is to minimise the need for many third party products by choosing the best-fit software from the outset. 

3. Retraining cost

To get the most value from the system, your staff need know how to use it. Training is a critical part of rolling out new software, and skimping on it is a recipe for disaster. So, you’ve got to set aside time to train all new staff to use another new CRM. In addition to the direct costs of retraining, there is the secondary cost of training fatigue. Staff may become overwhelmed with information, loose morale and start making errors.

4. Business disruption cost

When you change CRMs, a bit of down time is unavoidable. Your new provider needs time to get your data into the system, and you’ll want to set up user permissions as well as any branded templates before you grant staff access. Replacing a failed system doubles this disruption cost.

5. Time cost

This is the cost of time spent working on problems that would have been avoided by selecting best-fit software in the first place. Support staff spends time trying to develop ways to work around software limitations. Occasionally add-on products are required for missing features, which takes more time to evaluate, install and maintain. End users also waste time working around deficiencies.

6. Missed business opportunity costs

This is a hidden cost of selecting the wrong software, but it’s the one that’s going to hurt your business the most in the long run. When your agents have to spend time working around software deficiencies, they’ll likely miss new business opportunities. For example, if you choose a cheap CRM that can’t send automated price drop alerts to everyone who has enquired about the property, someone will have to manually go through and send a message to every enquirer. This manual task cuts into time they could be spending actually talking with prospects and finding their next listing. 

7. Customer perception cost

If the wrong CRM increases your agency’s response time to enquiries, or causes errors and unresolved problems, your customers’ perception of your agency will be affected. If you choose a CRM that doesn’t remind you to send your past vendor a birthday card, they might not remember you next time it comes to sell. Sometimes referred to as ‘churn’, this is the cost of wrong software negatively affecting how your agency is perceived. 

Ready to make the big decision?

So, here’s the deal when comparing cheap v quality: buy whichever you predict will produce the best return for your investment for the lowest manageable risk. 

If two CRMs are similar in price, and deliver “like for like” functionality  you’ll probably buy cheap. But when there’s a small price gap and a definite leader in delivering what your agency needs  – why wouldn’t you buy quality?

In all other shades of grey, you’ll probably need some help. Do your research, read reviews, find out a bit about the team behind the system – how big is the team, how active their product development is, how involved are they in the real estate world? Do whatever it takes to reduce the risk, because while a cheap real estate CRM may sound great, the reality is that buying the wrong system is really, really expensive. 

‍Want to see how your agency could achieve the same savings and achieve an ROI on Rex of 100X or more, book now and we’d love to show you how!