Cut my commission?

As a "discount" broker, I have to disagree with most of the comments here. 

1. Most consumers are knowledgeable.  They know the agent isn't getting the entire commission.
2. From a seller's perspective - the fact that we've all chosen a career with income based on housing values sounds like a personal problem for us.
3. "Discounters" value their time just like everyone else.  Not only do I value my time, but I value that of my client's as well. 
4. The statement "if they are that quick to drop their commission imagine how easily they will be to give in to the other agent when an offer is presented, agents that reduce are not working in their clients best interest but are desperately working for their own" -  Not sure what commissions have to do with transaction negotiations.  I've heard this argument before and it's old and innacurate.
5. Even medical care can be negotiated.  I've had my dentist reduce the cost for certain services just by asking - doesn't make him a less qualified dentist.
6. If a previous client called and had 2 properties and wanted to negotiate - heck yeah, I'd at least talk to him - that's just good business. 

Reputable brokers like myself earn business, keep business and get referrals by doing a great job for our clients. Oddly enough, since operating as a "discounter", I've never had a seller ask me to cut my commission.  They clearly see my value.  I offer full service marketing at a price that sounds fair and makes sense to most sellers. I even offer options if a seller prefers to retain the right to sell on their own. 

I think we'd all be better off, when we recognize that comsumers deserve to have choices when it comes to the services and products they buy - real estate included!

Mitch, Short, sweet, and to the point.  Hope things get better for you soon.

Mitch - This is simple and to the point.  I think they will also consider their value has been cut too.

Mitch -- Great answer.  That should be the end of the discussion!

Being upfront and confident with yourself and what you bring to the table as representation is always a very sound approach.

Great answer Mitch.  People should understand the blow we have taken by this market.

Mitch,

I often tell people, a good agent is worth more than their commission and a bad one will cost you way more than just a commission.  Discount agents aren't automatically bad agents, just like paying more doesn't automatically get you a better agent, but a great agent is a value at whatever price it takes. 

Well, if that does not say it all. Plus, it s expensive being cheap is one of my favorite expressions.

I am by far not the cheapest broker in my area. That said, I can appreciate Lisa Henderson's (#42) dissenting opinion. The market does have ample room for discounters, especially good ones, although I hate the term "discount"- all fees are negotiable. 

I think it is all when the reduction is discussed. Up front, when perhaps Ms Henderson and myself are vying for the listing? Absolutely fair game. 

At offer time, when the price I have warned for months is on the table and not the speculative dream the seller had? Sorry, I'll decline. I won't subsidize unless there is hardship, and those that know me know my generousity. 

My experience, escpecially from my days as a flat fee broker, tell me is that sellers seldom grasp that the commission is a line item in a bigger picture and that they'll often net more with a better agent. We can't raise market value but we can sure avoid a sale that end up below it. 

Simple and to the point.  I like it.

Well put! I am worth every single dime of my commission! Do you ask your doctor to drop his fees in half?

I can never say never... meaning each case is individual for me. Home owners are real people, sometimes on that ledge of being able to sell the house or losing it to foreclosure. Too often they are looked at as numbers or ratios and not people. I prefer to work with each seller and look at each case. A lot of sellers learn quickly that discount fees most often equal discount services. In a buyers market sellers need every advantage they can get and that inludes full time, full service and local agents working their hardest to get the house sold. Some homes will take more time, more resources and more money in marketing to sell. In that case it is better to be up front with the seller and decide what my time is worth to tackle it. Some listings you have to decline as impossible to sell due to be way over priced or the seller is just not understanding the market. For the sellers who do, it will lead to an easier and quicker sale.

Hi Mitch,  Your well writen post says it in such a clear and understandable way.  Well done !

I feel blessed as a realtor and it depends on who asks me to cut my commissions and why.  There are other ways to make things easier for a seller - but for those sellers that don't need help, etc. I like your answer!

I don't mind at all when clients ask, "Rob, how do you get paid on this?"  I'm happy to explain how loan commissions work.  Sometimes, but rarely, I'll work with someone who will press further and I can tell that they're going down the "commission" road as you mention above.  They want me to get them a (real or imagined) better deal at the expense of my income.  I still think it's fair play, but at this point, the question I ask them is, "What do I deserve to make on this transaction?"  Once they provide that number, which they rarely feel comfortable doing, I can decide if continuing to assist is in all of our best interests.

Great post.  Thank you!

Love your chart.

My answer to cutting my commission is short: NO.

I don't know, Mitch,  I don't think I'd go there with a potential client.  I'm not sure they care about YOU...  this is where you need to illustrate the value you bring to the table and how a discounted commission will cost them time on the market and quite possibly a lower sale price.

Happy Day!

Mitch, Great topic.

I faced a seller who after agreeing to a 5% commission, wanted to cut it after accepting an offer lower than his expectation but higher than market value. This was a very different situation than asking for a reduced commission during a listing presentation. Due to original list price I had already agreed to a commission less than 6%. When asked for the reduction, I provided, in bullet points, the work I did on his behalf and pointed to the failure(s) on his part to act on the things I suggested that would bring a quicker sale and sale price such as; improving curb appeal, making minor repairs and reducing the list price to adjust for market changes. I explained that the reduced selling price automatically reduced my commission. For all of these reasons I told my seller I would not reduce my commission; even at the risk of not completing the sale.

Further, during negotiations the seller expressed that he did not wish to renegotiate with the buyer who requested compensation for all the faults outlined above. My response to the seller was; just as you feel it to be unfair to ask for reductions on what had already been agreed to, I feel it just as unfair to ask me to reduce my commission, now. In the end, the deal was closed at the full commission that was originally agreed to. Oh, although the seller sold for less than he had hoped for, he sold still for an above market value price.

Here is our answer to this situation ~ No, No, No...NEVER!