Why So Many Agents Fall Down Before the God of Commission Cutting

Do you know the value you bring to a real estate transaction? Could you easily justify your 6% commission to a skeptical buyer?

Often, real estate agents don’t know the value they bring to a transaction. They underestimate their worth. They dread the “C” word. They worry someone will figure them out.

So, when commission is mentioned, they throw themselves at a buyer’s feet and say, “How much?”

Over dramatized, I agree, but close to the truth. Especially in this wonderful mortgage meltdown we seem to be having.

Knowing the value of what you bring to the table is essential if you want to overcome any objection to a 6% commission.

With that in mind here are five simple reasons to justify your commission:

1. Without a professional, sellers may not sell as quickly. This is critical if they have a deadline or contingency clause on another house.

2. You are an objective, seasoned negotiator. You bring an emotional, clear-headed stability to the table. You are able to see the whole picture and you might pick up on advantages amateur negotiators would miss.

3. You know competent home inspectors, architects, contractors. You’ve been dealing with these people for years and know their work well.

4. You will list their home on the MLS–a privilege granted only to real estate professionals. And the MLS means nationwide exposure.

5. You will advertise and promote a seller’s home on the internet in newspapers, magazine ads, brochures, the MLS and on your own web site. To do this themselves would be costly.

Listen, the point is to distinguish yourself as an expert in the art of buying and selling a home. Educate yourself. Designate yourself.

Lawyers command enormous fees for a reason: they are experts. Surgeons are the same way. It’s not enough to say that you passed your state exam.

You have to define some skill you bring to the table that any hack on the street couldn’t bring. And once you define this for yourself, learn how to articulate it with pose and clarity.

Finally, have the courage to walk away from any deal, especially if someone insists you cut your commission. This attitude alone will make you a powerhouse, profit-making real estate professional.

Then, believe in yourself. Wholeheartedly.

Click Here to Leave a Comment Below 2 comments
Ed Monaghan

Awsome Post!

Well said.

I am listing properties for sale well below market to get them sold because the sellers have to sell or lose them.

Buyers know they are going to get an awsome deal anyway but they are inclined to contact the listing agent directly and propose that they are not represented by an agent so they feel they are entitled to the selling agents commission as they will be representing themselves.

First of all… they can’t represent themselves. They are not licensed and a listing agent can not pay a commission to an unlicensed person.

If the listing agent does the deal, the listing agent will be representing both buyer and seller. Double the work and double the liability if something goes south.

Commissions are so hard to come by in this market, some agents will give in to this line of crap.

Don’t do it. Hold your ground. The buyer will buy the property anyway if it is a good deal. The buyer has absolutely zero claim to the fee arangement you negotiated with your seller.

I walked away from two buyers this week who proposed I sell a property I have listed to them for 1/2 my fee on one of my listings I ended up selling it myself and double ending the deal.

I refuse to discount commissions in this market especially. If I get a home sold… and closed… I darn well earned the fee.

I am not in sharing mode at this time. I do not do this business for practice or as a hobby. I do this business to pay my bills. Buyers are not entitled to any part of my fee and I earn every penny.

The operative word is “NEXT.”

Adopt that word to survive in today’s ever changing real estate market.

Gary Elwood

Ed, well said. I wish every agent I knew had your mindset. There’d be a lot more winners out there.


Leave a Reply: