So far we’ve discussed what to say when a new prospective owner challenges you about your Letting Fee, and also what to say in a letter out to current owners explaining the legislative changes and why you need to charge them the Letting Fee after the legislative change occurs.
(See the bottom of this article for links to the other teaching mentioned).
So, what do you say to your current owners when they phone you after they’ve got your Letting Fee advice letter, announcing they now will be charged?
Firstly understand that not all calls are angry owners who are firing missiles at you and wanting to leave your agency!
We find that about a third of calls are simply people enquiring on the situation and want to chat with you, and after a friendly discussion off they go without causing you any grief or issues.
Some will call just to ask you to explain the letter to them because they didn’t want to read it themselves!
About two-thirds of calls are those that are a mixture of light annoyance and questioning, to real anger and ’emotional bluster’ about the fee changes.
However all up, with every 100 letters that are sent out advising owners of the Letting Fee change, you should not receive more than 10 calls.
So, when you hear “Why are you charging me a Letting Fee?”, here’s a suggested response that can assist you:
“Mr Smith, thanks for your call and for expressing your concern to us.
You are a valued client and we have not wanted to on-charge you the Letting Fee, as we’ve always been charging the tenant.
Regretfully our Government no longer allows tenants to bear this cost and have now prohibited agents across New Zealand to charge any tenant directly or indirectly a Letting Fee, with these legislation changes occurring on (date).
The Letting Process can take ten or more hours for us to complete and it is the most complex and most important process for our agency, and this process cannot be compromised and shortcut in any way as the quality of tenant determines the success of the overall tenancy and our service to you.
As an agency, we charge around $100 per hour for our time, and as you can see if we actually on-charged our hourly rate on the time we do spend, it would be so much higher than our fee charge. It could result in a fee of over $1000, of which you will agree might be a bit steep.
Our Letting Fee of $X instead is charged, being a much lower rate, saving you money.
I’m happy to go through all we do for our Letting Fee if you like!”
From this point, if you can also increase the rent then a $10 per week increase may very well cover your fee, plus more (this is a $520 rental income increase over 12 months).
If you are able to legally increase the rent and its warranted due to market conditions, then offer this.
Otherwise, even without a rent increase, any reasonable person will not want to continue to argue with your very reasonable and real response.
Other useful articles related to the NZ Letting Fee changes.
What to Say in Your Letting Fee Letter to Owners
[Script #1] How to respond to ‘But the other agent isn’t charging a Letting Fee’
How to answer ‘Why can’t you just charge me a FIXED Letting Fee’