I'm sure everyone may have heard it before,
but how do you best handle the objection/
quirk from a prospect seller...

"Could you cut or reduce your commission
if I list with you..." etc. etc.

I just learned this dialog from my broker, who got it from David Knox.

If they bring it up first, then say "First let me show you all that I provide for my customers."

Then after you show them everything in your marketing plan, if they still ask, then ask them which of your services would they like you like to remove?

i offer 3 different plans with 3 different services attached.

i offer 4%,5%,6%...not one person has taken me up on the 4% listing! BUT, if they want it they can have it. it is basically waht Perky is speaking of, but i offer it before they ask me to cut my commission so that they already see what is cut out. the last sale of mine was a 5% (<--my investor who i met through his expired listing) and the one before that was a 6%---both were expireds---

I think there are two dialogs that every agent should know cold:

* Mr. and Mrs. Seller, there are others that will cut their commissions. You may have talked to some. The reason they do is because they don't have the tools I use to help get your home sold. In today's market, that approach will minimize rather than maximize the chance of getting your home sold.

* Mr. and Mrs. Seller, some agents will try to buy your listing by suggesting a price that will sound very appealing. I just ask you to remember one thing: Neither agents nor sellers set the sales price of your home in this market. It will be based on a willing buyer who compares your home to other homes on the market and homes that have recently sold. The price I've given is based on what they will see. I know you might want more. But, I've told you the truth. Someone else may tell you what you want to hear -- enticing you to list -- and count on working you down on price down in the future. I want you to remember that I've been straight with you and that's how I'll work on your behalf.

spot on approach!

one agent I know counter offers a low commission with a really high one!

Example: say she starts out with 7%. Seller says "How a 5%?" so she said "How about 10?" LOL

(numbers cited are naturally just for example purposes and are in no way shape or form meant to indicate price fixing or other sherman issues....)

Tell them that you'll be happy to reduce your commission if they are willing to list below market. That way, you both give something.

What people want is VALUE not the CHEAPEST. Example a bigger takes like crap for 2,pretty good for 3,or awesome for 4.

Most want the 3 dollar burger great taste at a great price. If they are asking you to reduce your commision tolist with you you haven't shown them in there mind you are different and more valuable then the next agent/broker. You need to show them the systems and strategies you use to get results. Tell them listing the home and getting it sold are 2 very different things.

In the end do not take listings that don't fit your business model.You will be glad to turn some listings down and stay focused on how YOU do business.

Sorry meant to say "Example a burger tastes like crap for 2.00,good for 3.00, or awesome for 4"

lol.. I was wondering what the heck : " a bigger takes like crap" meant..

Yes LOL it's been a long week and it's just Friday!

I had this come up last week with a listing. Not only did the seller want to list home @ $40,000 above market, in an area that doesn't get all that much sales, but she wanted me to take a lower commission even though I do more than my competitors do.

I did not have the backbone to stand up to her then - I wish I had. I did call her the next day though and tell her I couldn't take her listing at that price and for that commission.

She didn't seem to care about all the work I'd do to sell her property - I had gone over the entire presentation, and I had presented her with an analysis of sales the day before and she still wanted to list it above market.

Walking away from that deal was difficult - as you always want listings!!! but I'm glad I did and I think the next time I'll be better prepared to stand up to a seller when it happens again (my broker refreshed my memory about the David Knox quote AFTER this listing presentation...lol.)

If someone tries the "Another agents said that he/she will do it for 4% (whatever lower number)"

You reply with, "Well, if you can trust someone who can not even negotiate their own paycheck in charge of negotiating to get you the best price, then go ahead, it is your choice."

Or something to that effect.

^^They may be lying, too. LOL

Had a guy call the office stating that last office he called gave him a quote of x% (which is lower than our minimum). The agent that answered the phone was stunned when he said he wanted an even lower price. She said "If that other office said they'd do it for x%, your best bet then is to go with them, then. Our office minimum is y%, and that is as low as we can go for the services we provide."

All of this comes to my ears AFTER I met with someone wanting to negotiate me down below our minimum. lol

The answer I like best is "no."

I am always amazed at how people will haggle over 1 percent which might come to 1,500 savings but lose 20,000 off market value because they won't do what the broker says.

I don't care for Mike Ferry's approach but I do agree with him on some things.You are the professional and you are in control-if the sellers won't give you control move on to the next client.

My clients believe in me 100 percent. If there is doubt I don't have the time or energy to do with them and they can go elsewhere.I always tell them it doesn't matteer the commission you pay out or the sale sprice it is what you NET.

I tell them until closing happens all the risk is on my side as you don't owe me a dime until I perform.

What controls people is "fear of making a bad decision"

If you give them choices they will feel more in control and ready to go forward.

Exactly! Most people only look at certain aspects of the dollar. They don't really see what is involved. I think most people in general think "why should this agent get X amount of commission dollars from MY home?"

Perky, You did good by walking away from that listing. The seller would probably be a very difficult seller in the first place. If they want to list it $40K over market value, then it isn't worth your time or money to take the listing. They are obviously not motivated either. With a seller like that, I am sure you would have had an extremely difficult time getting them to reduce the price even close to market value after listing it too!

I just want to say, GOOD JOB! You stood your ground for our business and industry. Most agents could learn from this.

^^Thanks Len. It was hard, I tell ya, cause it is a nice house, and the lady was really nice - I thought I had a good rapport with her. She may have been a tough cookie down the road, I don't know. I just wish I had been able to say "Thanks but no thanks" right there at her house rather than the next day on the phone...over the phone I just sounded like a weenie. LOL

Next time, next time. Baby steps. I'm growing more each day...lol

There is a company in the area that advertises very low commisions (2.75%, 3% & 3.5%). Their website details what services the seller gets for each level of commission. Of course, the seller is responsible for buying agents commission which, all of a sudden, brings their rates back up to average. (Gee, for 3% they offer open house "assistance (seller holds open house with realtors signs and a sign in sheet (so realtor can "provide feedback") and for 3.5% they will attend closing with the seller and list on craigs list).

It's a great list of benefits, probably most of which we all offer in some similar form or other. This company is just smart enough to market it well, both on their website and on radio.

Fortunately, the savvy agent can compare his/her added value with this company's offerrings, and, if a good marketer close the deal.

Clever...and what if that company brings the buyer? Seller pays both sides?

Criminy...sounds like a company founded by Lex Luthor. Smart!

What services do you offer for each one?

Are you talking about the fact they show their services offered per level of commission, without including the total cost?

I believe this is deceiving, not honest marketing. I know most, if not all industries do this unforunately. It might work getting people in but if they feel deceived then they will spread the word. So not only do I personally believe (just my opinion) that it is unmoral, it won't help in building long term networks and relationships.

As you carefully pick over their website, you will find all the very fine print that describes what other costs might be included.

But, how many people read the fine print. Certainly not most of those that are the "victims" of all those unscrupulous lenders that caused the sub-prime mortgage problems.

They have been doing this for years. If it really were deceptive advertizing they would not only be out of business but sufferring terrible fines.

Ask them this.... Would you go to work tomorrow and tell your boss that you are going to work for 10% less, and if you did what would your job performance be?
Your getting paid to do your job at a fair price, and if you cut the commission what incentive is there for you to do your very best, and on top of that have other agents want to show your house?

any time a prospective client brings this up I always tell them right off the bat that make no doubt about it, I am not the cheapest broker on the block- never claimed to be, never hoped to be, never want to be. If they are shopping commission rate then by talking to me they are talking to the wrong guy. The people I work with are absolutely convinced that working with me is worth the extra cost b/c I save (or make) them a ton of money in ways I can honestly say no other broker I personally know can do. Being that I am highly specialized and my unique background makes it extremely easy for me to demonstrate that they will not talk to another broker that is more qualified, period. Usually it never is an issue and in the end I know I get my clients the best deal possible and many of them I know would never have closed had I not been involed due to my close connections to the governmental entities that must be dealt with, due diligence consultants, etc. etc.

Make yourself the best in your field and then command your own price (within reason).

I don't have this discussion anymore. Currently handling REO only and find what is offered as commission is adequate (the corporate world knows better than to compromise service with an unreal commission).

Yes certain people know to cross their T's and dot their I's but the majority do not. Yes it is there to read, but the whole marketing approach is to decieve. Everyone does it, including the government, but does that make it right?



While it is in print for all to read, and some blame must go to the person not doing their homework, the intention or path for the technique to be successful is to pull people in by deceiving. I do not believe it is right but again though, this is just my personal opinion.

There is legal, there is ethical and there is (morally) right/wrong.

We are required by law and the profession to perform both legally and ethically. A persons own compass directs their moral actons.

In my several careers, I have walked away from deals that were entirely legal but against my own moral code. I have even refused to do business with people because their own financial ignorance would have gotten them into serious trouble.

However, if I walk a person through a contract, or a proposal, it is up to them to understand it before they sign it. Just as it is up to me to understand what I am committing myself to. IMHO.

If all advertising is in accordance with all federal, state and local truth in lending and business regulations, there is nothing intrinsically wrong with it.

When trying to sell yourself, as an agent, or anything else, you are going to present, and possibly fluff & puff, all that you feel are your best assets and to disguise weaknesses and short comings.

That is all this company is doing. It is nicely packaged. It illustrates the "added value" this company is providing. Of course, some of their added value, that they charge 1% more for, could be standard fare for many of us. I would use that as a competitive edge for myself.

We aspire to be the best at what we do. We do more marketing then anyone else in our area, we can show how many calls we get a month due to call capture. We also can show how many unique visits we get a month from our website. We carry between 8-12 listings at a time while the board average is less then 1 so we get lots of sign calls. We have 3 different plans ALL are above 4% and trust me, know one chooses the cheapest one due to lack of services it provides compared to the other 2 rates. We can show all of the above during our presentation so when people by and large feel exposure is what their home needs then we do get our fair share of listings at a decent rate. That said we do not get them all for many reasons not just commission. We think about what we could have done differently if anything...for about 15 minutes then make any nescessary adjustments and move on. Understand that about 12-15% of the population shop only by rate, the rest just need you to show them value for their money. Offer more then your competition, ask the client to honestly make the comparison and most times you will get the listing. Never take something your not comfortable with as it will reflect on your service and cause problems later, also many of these people are not worth your time anyway and tend to be troublesome and actually hurt your ability to properly do your job. OFFER MORE....DO MORE... expexct more from yourself and run it like a business.

lagniappe

I congradulate you and others who do/have done that because I do not think there is enough of that happening.



I do agree that people should take more responsibility for themselves. With that said, people do rely on agents/brokers, and it is our fiduciary responsibility to make sure our clients understand what they are going into. It is our responsibility to use our skills to put our client in the best position possible.

How can anyone say that any decision the client(s) makes and agrees to is in their best interest when you know they do not understand the whole picture?

4% just gets on the mls-- no active marketing
5% exclusive right to sell- active marketing and the whole shibang!
6% exclusive agency - active marketing and the whole shibang!

that is a brief overview of the services that i offer. not one person wants teh 4%. if they wanted that i would make 1.5% and the buyers agent would make 2.5%

the reality is that a buyers agent on a 50/50 split would still not walk from the table making as wiht a 2.5% co-op as i make at a 1.5% co-op (they would make 1.25% after broker split)

4% is on there and all of my services are cut for the most part, so it would be a cake listing..
******people meet me through active marketing, so they believe it works(it does) and because that is how they met me and see the difference between active and passive, they dont go for hte 4% listing.

Estatereal - at one point, I had so many listings that I also considered offering the 4% barebones program. It did sound like a good deal, but I realized that since so much of my business was/is repeat/referral/SOI, I didn't want to throw away the opportunity to impress the heck out of someone with my service.

Jennifer,

I offer it mainly as a way in the door to compete with the discount models. if someone truly wants to go with a flat fee lister, my 4% model actually offers more than a flat fee lister offers. some people dont want to pay for a name brand regardless of the quality of the item. not one person has taken me up on it, but who am i to tell someone that this is waht they must have and must pay. once through the door i get the opportunity to sell active marketing and the higher commission that comes with it.


Jennifer, i have gone back and forth with the idea of dropping it and just having my 6% listing, but the ammount of people who call me from my marketing would dwindle(i think). when they see it at 4% and call me and i get involved with a multiple agent interview(seems to be the norm) i get the opportunity to show waht i do at a higher commission that others dont, and the big difference between me and a lot of other people is that i actually follow through with everything htat i say. there is not one line in my listing presentation that i have and dont do.

back to the origin of the message... the 4% is to compete with the flat fee listers, they get up to 30 pics, lockbox, sign.

i know where you are coming from, because i have had that same thought in my head from time to time(I didn't want to throw away the opportunity to impress the heck out of someone with my service).

Jennifer,

how is your business goign right now? what services do you offer?



ps. i will hear you on may 3rd;-) 11am est

Actually, I should have said that I was agreeing with you, not arguing. I think your approach is dead-on. I also offer a choice of commissions - not dependent on service, but rather on whether or not the seller wants to pay an upfront fee for a reduced commission. I do struggle with the idea of a variable service approach because I think as professionals we should DO what it takes to sell our listings and charge accordingly. But I think that's what you're saying - you get in the door with the teaser rate and then allow the seller to make his choice.

I describe my fees and marketing services at my website http://www.charmingolddenver.com. Feel free to check it out!

i like how you have the commission split up so that it paints a clear picture to the seller that they are not paying YOU X%(total commission)

Yep - that's how I do my net sheets, too. I have one line for my fee and one for the co-op.

In my area I am seeing this alot.Alot of people have no equity to pay a broker but are not financially strapped enough to do a short sale.

So what happens in our area we have these flat fee listers and for 495.00 they list in the mls and take pictures but provide NO contract services just put a contractor box on the door. Of course the 495.00 is upfront and NON-REFUNDABLE. It's an easy way for them to collect 500.00 and not do anything. You figure 1 hour to take pictures,contractor box, and put in the system.

I feel that the "no rep" listings like that are somewhat stigmatized on the MLS, though, don't you? That makes the 4% thing look better. Put it this way, two identical houses, you have the buyer. Would you hope your buyer chose the one with an AGENT representing the seller, or the one where the seller represented themselves?

Those flat fee guys are my biggest enemy when it comes to listing FSBO's.

-jeff

... because half the time, I come to find out the FSBO is actually already on the MLS!

-jeff

If the FSBO is already on the MLS, isn't it also a violation for us to contact that FSBO and offer our services to them. I think that's an MLS policy. We can't solicit business that is already under contract or on the MLS. It really sucks if that's the case.

Well... it's not that simple.

Here's an example I am KICKING myself over right this very moment.

I went to a FSBO last weekend, as in 8 days ago I mean. I hit it off with the seller and spent about 20 minutes there. It turned out it was on the MLS. I very gently brought up the concept that if they wanted full representation, I'd be interested. She was very receptive to the idea. I decided to let it perk for a week and give them a call, since SHE had initially brought up that they had limited representation.

(Which was prompted by me saying, "I see it's on the MLS..." while looking at the fliers they had made)

So... come Wednesday or so, I am checking my hotsheets on the MLS and there it is! Listed full service, with someone else.

You know what sucks a$$ on this one? My spidey-senses were a'tingling on this one. I knew they were a good prospect. And in that 20-minute period I was there, at least 5 minutes was spent talking in general terms about how a limited-rep listing was somewhat stigmatized in the market, how I could take over the burden of open houses, etc etc etc.

Basically, I prepared the ground for this other wanker to waltz in and slam-dunk it.

Aaaaarghhhh!!!

-jeff

It doesn't work that way in my area. A listing agreement is an agreement and unless the seller terminates that agreement and calls me I am not allowed to interfere with a mls listing period no matter who put it in the system.

Most fsbo's start off selling themsleves and then take BABY steps toward paying a full commission until it sells. They feel they can't control the sales price but can control the BROKERS commission so that's where everyone puts there energy on US!

I will have to say one thing to the flat fee listers, they make the money with no risk and then stack them deep and collect the fees.

You know, I am thinking of talking to my broker about a flat-fee approach for ME to offer. It would be set up so that if they chose to upgrade to full service, I'd take the fee out of my commission when it sold.

The flat fee guys are killing me with the FSBO's. Most of the FSBO's on the market right now are "stale"; so maybe that's why, but MAN it seems like they are all on the MLS already!

This whole "limited representation" thing is a sign of the the apocolypse <g>.

-jeff

it is not worth it. remember that your name is attached to the listing so if it is overpriced adn flat fee and you are doing nothing for them, your name is still there for the neighbors to see and they probably think that the seller is paying X% to you to sell it. not just one sale, but future sales could be affected by a choice to list flat.


you can beat them with exclusive agency...

the expired flat fee listing is the easiest one to get.

Yup, most flat fee listing companies are out of the business in my area. They can't keep up with properties needing to be sold ASAP, including Short Sales, REO, desperate sellers needing to get out!

Could you imagine a flat fee listing company trying to handle a short sale? LMAO!

Response to "Another agent will do it for N%": "Mr and Mrs Seller, when another agent says they'll do it for N%, the question is, what is 'it'? You've seen my marketing and sales plan, and how I provide service to you; you've also seen how comprehensive my pricing research is. Is that what the other salesman will do for 4%, or will the other agent simply list your home for N%? The reason I execute my marketing plan for your home is to enable you to get the top price the market will pay for your home; just listing the home doesn't do that."

Then you need to close in on what should be clear by this time---they want to hire you, but the commission is the objection. So narrow it down to that--or find out if it IS still and really only that:
"Mr and Mrs Seller, if we put the commission aside, would you hire me based on my marketing and sales plan and my pricing strategy?" Or "If we put commission aside, how do you feel about listing with me tonight?" Or "If our fees were not different, who would you list with?" Usually they are now saying yes and you. "Why?" They'll tell you why. "So in other words, you value to what we do, and that my sales and pricing strategies are, as you agree, more productive and more likely to sell your home for a price more acceptable to you. So my marketing fee doesn't reduce your net after sale, but increases it."

Jeffo, you can't really do anything about those cases when you end up feeling you plowed the ground for another agent. The fact is, most FSBOs are being plowed by multiple agents; if you had gotten the listing, don't you think another agent would feel that they had made the seller ready for you? You're not alone in working FSBOs.

Another way of handling the request to cut your commission is this very detailed, complicated explanation of why you won't:

"No. Any other questions?"

Most of the time, it has taken them some emotional work to get up to asking you to cut commission. When you say no, they're spent anyway.

mihomeagent,

i do like the "no. any other questions?". i must say that i have used that before. i must also say that imo for a fsbo, that is the only reason they are trying to sell on their own, so a more detailed explanation is needed. like your post 3 above this one. that one works for me, something like that anyway.

I believe that when sellers ask if we can reduce our commission, they do it because they know they're supposed to ask. If they don't, it would be like going to a car dealership and paying full price. Our fees are negotiable, people know that and if they don't ask, they'll wonder if they could have paid less. It's human nature and nothing to be offended over. Certainly nothing to get snitty about.

The best answer for me is a respectful "My standard fee for listing a home in this price range is x%, which includes all the services we talked about. I don’t typically reduce my fee unless there are special circumstances involved, such as when I work with a seller who is purchasing their replacement home through me."

If you respectfully answer the question, without being defensive, they’ll usually be satisfied. I never go into the specifics of how many ways the commission is divided or how little I end up with at the end of the day – it’s unprofessional and immature, and the seller couldn’t care less.

That is my favourite on after I have answered the first time and they try again, some people look totaly shocked that you won't bend even a little and end up thinking well then "they must be good if they will walk instead of cut" Remember if you are still in the house at this point...THEY WANT TO LIST WITH YOU....so don't give up because both parties will feel wronged in the end. In a weird way you are doing them a disservice if you do cut as we all know they will be pushed aside shortly for your higher paying contracts. Don't do that, stick to your plan, this is after all your business not a game.

Remember that if you say that you will reduce if you buy through me this may backfire as well since your focus for profit now is focused on the purchase not the sale subcontiously anyway so let's just learn to do what I said earliar...offer more....do more...and expect more. Both client and agent will be happier in the end. It is proven over and over that 85% of the population does not mind paying for value, or percieved value so give them value.

But it hurt my feelers, and I demand.... satisfaction, dammit!



Just kidding. I agree. It's just hard sometimes.

-jeff

Man, the corporate world must deal with New York differently than it does with Michigan.

In Michigan, foreclosures often have 1.5%, 2%, and 2.5% co-brokering compensation. This is less than we usually see, and enough to discourage at least a lot of showings.

In Michigan, agents often find at the closing table and only then that the bank has decided it is not going to pay the commission it offered (even the below typical commission), and expects the brokers to cut their commissions right then and there. (And as fiduciaries, the brokers must do so.)

In Michigan, holders of foreclosed or short sale properties will commonly take anywhere from a couple weeks to a couple months to reply to an offer. Sometimes they do not respond at all--ever.

Our REO sales are compromised to the max, and those compromises result in many offers going south because the buying prospect gives up and moves on.

I do not understand why brokers must do so. Fiduciary responsibility does not mean working for free.

It just goes to show that contracts are only as good as the "wronged" party's willingness to enforce them. To pull that kind of crap at the closing table is pathetic, and yet I could see how agents would cave, because their only option at that point is to refuse to reduce the contracted commission, thus likely killing the deal, and then sue the bank (!) for specific performance.

What a mess. Ironically the one REO property I've brought a buyer to, I got paid MORE than what I thought I was gonna!

-jeff

I had this happen once and my response was No! The bank decided they wanted the sale to proceed so they agreed to pay my full commission.

I believe that this is often just a last minute tactic extort some additional profit fro the deal. I believe it is also often a bluff and far too many agents are unwilling to call the bluff!

The bank wants to sell as they indicated by accepting the offer including the commission they offered.

Great scripts guys....I'm also usually ready with "we have to carry certain E and O insurance to protect our agents and you as our client as well....etc, etc." If they say they've never heard of that you can say "well many agents don't really know how to explain why they charge what they charge. "

I know e and o varies for brokers but it still is a realistic and professional counter to add into your script.

Don't kick yourself. Plenty of times we educate expireds on price, and then see them listed with someone else at the price WE talked them into.

I like that response Jennifer! I'm going to use it. However, I do find that many of them have no idea how the commission is split. I don't go into a long explanation of what I end up with, but explain what I am offering to the selling agent, and that they split that with their office.

Actually courts will tell you that fiduciary responsibility can mean working for less and even for free, if that's what it takes to fulfill the best interests of your client. Sucks, but that is what fiduciary says. Read your agency disclosure. Yes, you contract for a commission. But your agency disclosure is what agency means. And that disclosure doesn't say you do not have to fulfill your fiduciary obligation if someone decides to reduce or eliminate your compensation.

I don't see why it can't, and doesn't, but that is agency law. And if a bank says cut your commission at the table, you must in order to fulfill your fiduciary obligations. Now, you still have a contract with someone who says they'll pay you, either the buyer or the broker to whom you are subagent and who offered compensation on the MLS, so you can ask or sue to get paid, because you are owed the compensation by contract. But that's not the bank's problem at closing. That's why it can happen, and does happen, that the banks can and sometimes do force a commission cut at closing.

Whenever I've had a commission cut occur, I've always had to sign something saying that I agree to it...the terms are usually "if you want this deal to go through, you need to agree to this - otherwise it's no deal".

At that point I sign something which is then legally binding saying that I agree to change my commission from Y to Z in order to make the deal happen.

Granted I haven't worked with a ton of short sales or foreclosures, but that's been my experience thus far. Do they have you accept it verbally and not put it in writing that you're agreeing to accept less compensation?

Fiduciary responsibility has nothing to do with whether or not you get paid - or with how much you get paid.

Your fiduciary responsibility extends only to the scope of your agreement.

i.e. Is it in my seller's best interest for me to work for free?
Absolutely...

Is it my fiduciary responsibility to work for free?
Absolutely NOT because that's not what was agreed to in the terms of the contract which created the fiduciary responsibility.

I'm no lawyer - but that's the way that I understand it. Anybody care to confirm?

Hmmm. The direct approach. I like it.
But I wonder why so many people
have a hard time saying no. Is it
that we're that paranoid to lose
the potential business?

Desperation?

I can not confirm, but I agree 100% that fiduciary responsibility does not mean working for free.

A good answer is: Does your denist, doctor, costco, etc. cut their services/ Do you work for less?

I tell them, "the only time I will even consider reducing my commission is if I have a triple deal." They always ask how do you get a triple deal? I tell them, "If I have a buyer where I have listed their house and they buy your house, I will reduce my commission." They usually give me that deer in the headlights look and say "Oh, OK"
Now what are the chances of that happening! LOL If it did I would be so happy I wouldn't mind the reduction.

At least they know how silly their request for a reduction is for me.

Curious: Have others used this tact/tone with a prospect
with success?

Thx.

My response is:

"I charge X for foreclosures or divorces (deals that are extra work).
I charge X-1% to the general public.
And I charge X-1.5% to friends and family."

That is almost always the end of the conversation.

Curious to hear what everyone's (professional) response/counter is to that remark,
if it's ever been made to you.

Thanks.

Here's a link to one of many prior discussions on the subject:

How Do You Handle, "...Can You Reduce Your Commission If I List...?"

I usually don't give an opportunity for that question to come up. I say "Here are my 3 options, a%, b% and c%." Then I go into a discussion on how a% is the barest minimum our broker allows us to take. And I have refused listings that won't take at least a%.

What is interesting is that many are curious about b% and c% and I explain about the higher commission actually being a marketing tool and that I would be able to negotiate a little with my broker if push comes to shove and we're this close to putting a deal together, maybe we can renegotiate down if needed, but only from b% or c%. IF we start with a% it will not go any lower.

My last 3 listings have opted for the higher commission, and one of them sold - and the seller never even asked to cut the commission.

The seller always ask this.Sometimes to see if you will reduce and other times to see how great of a negotiator you are.

I will walk rather than reduce my fees.If you reduce from the beginning you will lose respect and control from the start in the transaction.

I get as many leads as possible and then list properties that conform to my standards.Then again the database I have and the marketing I do for my listings usually nobody can touch.

I might take less listings but I sell almost everything I take and at my fee.


Usually a great response is "I an agent is willing to roll over on their fee and reduce then when it comes time to help you with an offer and getting you the most cash they will roll over as well"

"Just like I am an expert negotiator fighting and proving my commission I will work just as hard on your behalf squeezing every last cent out of the sale in your favor when it comes time to negotiate an offer"

All you have to do is show your value and most will pay the price.

This has been my experience too, for over a decade I've only done this 3 times
and in all of them the people abused me and were incredibly demanding. If I had
to do this on a regular basis I'd go back to working as a carpenter which I did
for 5 years prior to going into real estate. Just say "NO", but make sure you prospect as much as you can each day.

A tried and true response is "No I don't! Any other questions?" Amazingly enough a lot of people don't take it any further.

It's unfair for a real estate broker to cut his commisions. How can a broker work hard for selling the property if the owner cut the commisions.

Wouldn't use unfair as a response.Shows you are responding defensively in an emotional way up for debate or rebuttal by the seller.

Instead be direct and use close ended statements that force the seller to make a choice.

Justify your commission. If a prospect asks you to cut your commission, simply reply with something along the lines of: "Sorry, I really would like to, but to cover our cost of marketing your property, showing the property, paperwork, etc. this is the minimum I can charge and still give you the attention I require myself to give all prospects." Give them a reason to pay the commission.

I opened my last negotiation by emailing the listing contract to the seller and I told him to sign by the x's and answer all all the questions and, "Oh by the way, I pre-filled 6% in the Brokers Commission box. By law that is a negotiable amount so you can tell me why you think my Broker and I are worth less, if you want to." It was returned, signed & dated, "as-is."

Time before that, it was face-to-face and I was genuinely dismayed to have the seller wanting to dip into my profits to make more of his own. I had a sad look on my face and I said (truthfully) "Wow, I don't even know what to say....no one's ever asked me to cut my commission before in my entire career." (sadder+at-a-loss-for-words face) So he remembered he knew and trusted me and my broker and he didn't want a sad Realtor and a disappointed long-time Broker.

I am very upfront with justifying my commissions, and I can explain clearly and exactly how many hours I spend on an average transaction. I don't even need to get into the advertising costs; usually all I need to do is give a realistic picture of how much time it actually costs to work through the average sale--especially in the current market when deals are far more likely to fall out of escrow. People, both buyers and sellers alike, just want a realistic picture of how their money is being spent, and once they understand how much goes on behind the scenes they're generally pretty understanding provided that you aren't asking significantly more than your competition.

Only once have I had someone (a buyer who wanted me to work flat-fee) ask me to take less than what I would normally take. I did take that one because 1) buyer and seller were both licensed (but not actively practicing) brokers, and the two of them had already worked out all the details; and 2) it was a type of transaction in which I wanted more experience.

oH HAHA .... I recently told a seller this

Seller: Why 7% percent. will you cut your commission
Me: No, not really I do not do commission reductions
Seller: Why?
Me: Because I'm worth it

*Moment of Silence*

Seller: ok....

Oh and I still got the listing...

You determine the course of your business and your worth.

I find the Knox dialogue for commission-ectomy to be the best. If you aren't familiar with it, check out David Knox. It is well worth it!

I don't ask that because I'm not anywhere nearly as educated as a doctor or a dentist. Using a retailer is not good because many of them WILL cut their rates to meet a competitor price.

It is best to just say "It is not my policy to cut rates" or something along those lines and leave it at that. No need to try and be defensive and justify it using practitioners who need years and years of university education to practice their profession.

Also, if your marketing program completely blows away the competition and you are doing things that other agents cannot or will not do, you never have to cut your rates because you are the only one offering the product.

The SOLD SIGN rules the day! Get yourself some sold signs and they WILL pay.
As a business person, we should wants to make the most amount of gross and net money as possible during reasonable business hours.

Take a saleable listing, do a good job and get it sold, then tell the world about it. ( without spending money)

That's why I prospect around my listings and sales. Most sellers who have to sell want to go with success rather than take a chance with failure.

It depends how hungry I am.

Nothing in the pipeline then I cut it to ensure the work.

If I have a lot going on, then I go full boat. I just match the request with the fact I have a large family and I am the single income. I have to spend my time wisely. It's honest and no one has ever questioned it.

I always cut for repeat clients or referrals from clients.

I never cut . . . . and so, I'm never caught giving one rate to this guy and another to the guy up the street. This is a small community and everyone talks to everyone else . . . . or "about" everyone else.

There is variation in the Rate depending upon the nature of the property . . . . SFRs; Farms; Hunting Camps; Raw Land; Gas Stations; Apartment Houses; et cetera, but I keep the same rate within each category.

It only becomes a problem when someone says "Hey, I could live in my Hunting Camp, so it ought come in with the little 6% SFR Rate instead of the big 8% Rate"

And then I have to say "You set it up so's I don't have to snowshoe in there 2 Miles and I'll give you the 6% . . . . and why is it when I go out there, you're never around except during the 2 weeks of hunting season ?"

Maybe consistency is a good substitute for for a bad memory. Just like with BPOs, I have certain Fees . . . . they're the same for everyone. Consistent Commissions rates makes it easier on me too.

Consistency . . . . that's my middle name.

Exactly why my broker will not allow us to sign for less than x%. It is not fair to the other clients who paid "full price."

I might have a unique situation since my broker cares less about my comission and more about my monthly bill being paid, but I don't worry about people talking. That is their business. If they want to ask about something that is none of their business, I will deal with that. Every situation is unique. I do not feel I need to equate one deal to another in terms of comissions. If I am asked to then I will. But if someone is going to presume they are owed something since they were told someone else got it is flawed thinking on that person's part. It is not illustrative of a fault I have. And in my personal case if client A tells client B that I gave them a good deal, then client B is a referral from a client and would get a discounted commission in my practice (listings not sales)

It's fine to do what you want but I think it will backfire in the end to cut rates except for a "friends and family" type deal. Eventually you're going to lower your bar from x% to w%. Then when your norm is w% people will start asking for v%. You'll lower yourself down to next to nothing eventually...there will always be someone asking to pay less...pretty soon they'll want it for free! LOL

It is my simple intention to avoid discriminatory practices, and a consistent Commission Structure, regardlless of who might be paying it, helps me meet that objective.

Some Folks are just itching to find a reason to claim that they were treated unfairly, and for me, showing favoritism in Commission practices WILL NOT provide the ammunition they seek.

Oh, you bet I discriminate. I choose transactions and market participants that will yield me the most money. I stay away from cheapskates, I look for higher end buyers and sellers who are smarter and more demanding. I give people who buy and sell with me commission cuts. What I charge is MY business, and I do not give a rat's rear end what anyone thinks about it.

I am a newbie, have been working 3 months only in real estate. I started working in rentals and can't believe the huge INCOMPETENCE from Realtors I have dealt with so far. I can say, the 80% of Realtors I have dealt with are very incompetent, and probably 95% of Realtors don't even fill out properly an MLS listing.

There are realtors, that list properties for rent and they don't upload pictures of the property. Others, upload pictures only of the community but not of the property. Others, haven't even gone and see the property! Others, don't even put any remarks on the listing, or broker remarks, any description of relevance of the property (and without pictures!). Or those that are not clear on the MLS and put for example in the commission 5%, but at closing they said "oh, it was 5% of the first month's rent, not on the annual lease"! And I can go endless mentioning all things they do, or better, don't do.

But what angers me the most is that they don't even take the time to change the status of the listing! it appears active, and when I call them in reference of the listing, they say "Oh, has been rented 1 week ago, or 2 weeks ago". So why they are not changing the status? "Oh, we are processing an offer already and will close it soon". Why they don't change the status to pending sale then? And this is happening for the 95% of the listings, so what I have to do? I have to call the listing agents and ask them for each listing a client might be interested in, if that listing still available, even though the MLS listing says active, just because the most of realtors are too lazy to change the status!

Ok.. probably what angers me the most is that realtors DON'T ANSWER THE PHONE, or return calls, or emails!! what kind of service are they doing to their clients? I have had clients so interested in those listings and they just don't answer the phone, or reply emails! they want to rent and I have clients that want to rent their properties, but the listing agents don't answer the phone! and when I call their office, the receptionist say: "Oh, if he/she is not answering the phone, there is anything I can do". And believe me, I'm not talking about 1 office only, but many!

So my point with all I have said in this thread is:

WHY ALL REALTORS BRAG SO MUCH SAYING THEIR HIGH COMMISSION IS WORTH IT IF AT THE END THEY ARE SO INCOMPETENT?

I'm just a newbie here, and when I read a thread like this, I put more in the seller's shoes than in an agent shoes. And I don't like people that just talk... and talk... and brag.. and brag. I'd prefer a new agent that is willing to give me all his/her personal attention and effort, than an agent that has a lot of "experience" but its too busy to give me the attention and then I have to deal with his/her assistant.

How some have said, I think the most important is to price correctly the property, not overpricing. That's the most important thing to do for the seller. Marketing? its not necessary to have a lot of experience in real estate to do a good marketing. There are plenty tools available on the internet for marketing, so I don't think that is exclusive for agents with experience. Only having the money to invest in the best marketing and that's it. So really.... why Realtors brag so much?

Anylina - I feel your pain. This kind of thing upsets me every time I see a listing online that is filled with typos, only has one lousy picture taken from the car (rear view mirror visible) and I could go on and on.

What bothers me is that people keep hiring these clowns. That's what blows my mind.

Perky: You can't believe how frustrated I feel when I have to deal with these kind of "realtors", they just do a disservice to their clients but when they go and try to get the listing (either for rent or sale) they BRAG.. and brag... and say they are the best, that they have been 10 years in real estate, etc, etc.

So that's why I'm very skeptical when people talk so much about how "good" they are and they are worth the commission. There is a phrase that says: "tell me what you presume about and I will tell you in what you are lack of".

Oh, I know. I've been there. And the sad fact is, I know I have frustrated others too with my apparent incompetence from time to time. We all have feet of clay.

The thing is to not focus on the idiots because you have no control over them. Focus on yourself and do your best and be your very very best - you have control over yourself.

This has not happened so far in 11 years, but I will watch out for it. I certainly do not want to work for free.

Thanks Perky.

I share your opinion. . . .

What do you think about this website:

www.flatfeelisting.com ?


"What you should never list with a 6% broker":

http://www.flatfeelisting.com/why6percent.html

What they offer and the seller gets:

http://www.flatfeelisting.com/faq.html

First of all most agents are charging 5%, not 6%. So you still have to pay a buyers agent 2.5%, plus the $299 fee, plus you have to do all your own marketing and photography and videos and virtual tours to compete with the other listings. Then you have to be there for all the showings and handle the transaction management.

This website is no threat to a good agent. It might be a threat to a bad agent though.

Anyelina, I encounter a lot of the exact things you are talking about every day dealing with agents that list foreclosures. The trick that seems to work with them is to use email. They don't respond to phone calls hardly ever, but they do occasionally respond to email. A lot of them have an outgoing message that says if it shows active in the MLS it's active. Yet when you bring them an offer they say "sorry it's under contract". When I press they say "the contract came in 15 minutes ago". (rolleyes)

I got the no call back routine recently from an agent who is listing his parents house! I called him every day for the last four days and told him I have a client interested in his listing and had some questions and I still haven't heard from him. I am going to track his parents down in Florida and tell them what a bad boy he is. I bet he calls me back then!

Really you are seeing what the business is and why it's called work. Understanding that it really is that difficult may help you decide that it really is not worth working with renters. (without a hefty retainer) I have a few rental properties that I manage and I get stood up continually. People will confirm 1 hour prior, not show up and never call me back. It makes you think twice about agreeing to manage a rental a long way from your office.

The only thing I haven't heard is agents bragging about how great they are and how they are worth every penny. Don't hear that ever. I hear agents talking about how they earn every penny, but it is generally more about all the work we do for nothing, how hard it is to get loans approved, inspections negotiated, houses to appraise and buyers and sellers to stay sane through the process.

DeepSea: Just go to activerain, all agents brag there.. brag and brag... its so annoying!

Realtors don't even reply emails, or text messages. They are so incompetent! I have reported many listings that don't have pictures. I reported few days ago a listing that has a picture of THE SKY... can you believe it? the sky.. nothing else, as the picture of a "property". And yes, I receive that answer also "oh, I just got the contract today" when I tell them "but according to the listing still active". I am going to start reporting these listings that have been rented but still active on the MLS!

LOL @ a picture of the sky. That's a new one.

Oh and I rarely read the majority of the blogs on ActiveRain. I only read a handful of the bloggers there.

They want to overprice and undercut your commission...

I simply discuss why I have the rate I do, and let them know if they want me to take less commission and list high...I'll only raise the suggested listing price by 1% of what I reccomended if it's that important for them to pay less commission...that and stressing the comps...it's a winning strategy!!

They're not really saving 1% then are they? Because if the prop could sell for 1% more that's money that otherwise would have been in their pocket, not yours.

[quote=navarac][

First of all most agents are charging 5%, not 6%. So you still have to pay a buyers agent 2.5%...[/quote]

You seem to be assuming that there is some sort of implicit rule that the BA fee has to be half of the full listing commission which is not true.

J B

"not really saving 1% then are they?" Wow, talk about making assumptions.

What is wrong with Navarac's post that most listings are at 5% and the listing agent offers 50% to the selling agent? If you are an agent have you looked at your own MLS?

Navarac didn't make any assumptions, just stated a fact. If a buyers agent wants more he will just have to handle it at his end. Don't assume all BA's only work at 3% or assume they are entitled to that percent. As a matter of fact I noticed too many BA's rebating to the buyers so the 2.5% seems OK to me to give a buyers agent in many cases, the BA and the buyer will just get a smaller amount and why should the seller rebate to the buyer? As you say that money should be in the seller's pocket.

Maybe you can change the law in Texas and use the New Zealand system, if it is still that way. There is a national contract, the listing agent gets zip, the only fee is the one the selling agent gets, and a seller is required to list with an agent even if they are a broker (they can't list their own property). Of course, maybe you feel the selling agent shouldn't get a fee either because that money could be in the sellers pocket.