In the past couple of days I have had a few conversations with listing agents who were confronted by potential buyers wanting a Real Estate Agent Training Tipsdiscount on the sales price because they didn't want to use a buyer's agent.

I Want A Discount

This is one of the biggest misconceptions we face as real estate agents.  For whatever reason, buyers seem to think that by working with the listing agent they can automatically get a reduction in the sales price of a property.  So what do you say when you are approached by a potential buyer who wants a discount?

Educate The Consumer

The very first thing you need to explain to them is that the commission is a legally binding agreement between the seller and the Broker.  It is not an agreement with the listing agent, but their Broker.  The seller has agreed to pay the Broker a certain percentage.  Of course there are exceptions and those would be stated in the listing agreement, but I'm speaking in general terms.  So while the buyer thinks they would get a "discount", in most cases they wouldn't.  The listing agent would simply get the full commission.

Explain Agency Laws

The next conversation would need to be that of Agency.   Since Agency laws vary from state to state, you need to discuss the level of representation you would be able to provide to these potential buyers.  Lastly what is your standard of practice when it comes to working both sides of the transaction?  Of course they will say that other Broker's offer a discount to buyers, but you can't control what other Broker do or don't do.  You can only talk about what you do.  Consumers need to understand the value of having someone represent them and their interests 100% and hopefully you understand the importance of representing someone fully.

What Is The Property Worth?

Although many jurisdictions allow dual agency, I find it difficult to walk that thin line...but that's just how I choose to run my business.  There is no right or wrong way of running your business, but it is our obligation to educate the consumer so they can weigh all of their options to make an informed decision.  At the end of the day it's about the consumer feeling as though their interests were represented fairly.  Buyers should make an offer based on what they feel the property is worth, trying to get a "discount" has nothing to do with what a property is worth.

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58 Comments on Getting A "Discount" By Working With The Listing Agent

20 Most Recent Comments Displayed Show All

MAY
17
2012

Is it just me or is the "discounted" deal always the one that has the most problems?  Sometimes the commission you get on just ONE side isn't worth the time and energy you invest.  Buyers will probably not appreciate the true value of hiring their own agent until the sellers stop paying for the buyers' side.
8:11am • #40
196,237 Points Outside Blog

Chris, #41 sums it up best, doesn't he? When RE agents believe their intrinsic value as a professional, these discount issues will fade away, however, I don't see that changing anytime soon.

Educating buyers who demand a discount isn't going to change their demands because if you don't accommodate them another agent will. I don't discount my value as a professional and when prospects don't meet my client profile, it's simply next.
8:37am • #41
164,393 Points Called Shot Master

Explain your states agency laws. Then tell them to go get a buyers agent. Period!
9:01am • #42

When dealing with buyers, I always point out to them that my services are FREE.  It doesn't matter if I have listed the property or not.   They agree that it's hard to discount free. Great post..thank you for sharing.
Cheryl Nixon
9:29am • #43

It is irresponsible for all the buyer seminars to promote the idea you will get a discount if you work though the listing agent. Like you said Candy, the property value to the buyer is ‘what it is worth’ to them. Value is not determined with regard to a discount from list price.

 

And Chris #41, thanks for the note about sellers asking listing agents to take less if we also find the buyer. Why agents cave to that request is beyond me. Is that not what the seller wants us to do, find a buyer? I list your property, get the terms you want; and you want me to work for less! I do not think so.

Lincoln Henry Gill - Active Lion Real Estate
10:59am • #44
248,895 Points 8 Featured Posts Outside Blog

Hi Candy,

Great post and I'm definitely reblogging! This is so true, and unfortunately, sometimes leaves the buyers without TRUE, unbiased representation, and the undivided loyalty they really need to protect them.

Hope your week has been wonderful!!

Gina
11:26am • #45

Very well put. I especially like how you advocate proper education of the consumers we encounter.
3:38pm • #46
2 Featured Posts Attended Rain Camp

Hi Candy - greetings from Dallas!

I could not agree more with you.

I do not think north Texas is very different from other markets in the country from the standpoint of having agents who discount, discount, and discount some more.

With virtually NO exceptions that I can recall, those who are willing to negotiate their own compensation will also ultimately be compromising on the services they provide.

I see it each and every day......and because the agent on the other side of the transaction is agreeing to be paid less,  the client is the one who gets a compromised level of service.

It is sad.....and a true embarassment to those of us who work to earn every penny of what we earn.

Thanks for the great, thought-provoking post!   
5:38pm • #47
103,765 Points

Hi Candy! Great post, I agree with you! Thank you for sharing!

Have a Great Weekend!!
7:36pm • #48
1,024,215 Points 15 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Great post.  I think a lot of people are looking for a "discount" and they end up cheating themselves.
9:48pm • #49
587,340 Points 106 Featured Posts Outside Blog Called Shot Master

With all the talk and all the information available on the Internet, you'd think buyers would KNOW this. But they don't.
10:42pm • #50
MAY
18
2012
498,755 Points 13 Featured Posts Outside Blog Called Shot Master

Hi Candy, excellent post, but I find often buyers still don't get it.  And investors are the worst!
3:21am • #51
MAY
20
2012
166,897 Points 1 Featured Post Attended Rain Camp

We get these calls often - I only work with the Listing Agent.  We don't comment unless an offer becomes a reality.  Joy
6:52am • #52
MAY
21
2012
162,412 Points

I think when customers say they want a discount because they are working with the listing agent - it should become a surcharge. Yes... it is TWICE the work, No... there isn't another agent on the other side to help things move in the right direction and calm the waters when they get turbulant. Yes... its more than twice the amount of stress! UGH.
7:51pm • #53
MAY
22
2012
556,102 Points 31 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Of all the crazy things going on today, this is one of the craziest. Buyers are taught that they can interfere with the contract already signed and agreed to between the seller and the broker.

Phil
3:23am • #54
966,726 Points 60 Featured Posts Outside Blog Called Shot Master

Phil in #56, and Candy:  I read your comment, and was a bit puzzled.  Then it hit me that it has been twelve years since I was associated with a broker where I was REQUIRED to get their "permission" to make any changes in commission rates that I was charging my  sellers.  But, that is one of the luxuries of being with an office where I am in control... just me... of what commission rates I charge.

It has been so long since I had to call a manager to get permission to reduce a commission... for whatever reason... that it just sounds strange.  I refuse to be associated with a broker who ties my hands as far as commission rates are concerned.
3:56am • #55
MAY
29
202,516 Points 11 Featured Posts Outside Blog Attended Rain Camp

It's good that you have answers to these types of questions. Many agents just draw a blank when confronted by this.
7:25am • #56
OCT
31
237,566 Points 5 Featured Posts Called Shot Master

That is one of the thornier issues we face. People don't seem to understand how we get paid.
10:28pm • #57
APR
11
115,846 Points 3 Featured Posts Outside Blog

Such great points, and well written.  I'm not sure where this misconception began, but I don't know many listing agents cutting their commissions in half and passing the "savings" on to the buyer.  All you do is lose representation and an advocate working for your side...and will cost you more in the end.
10:13am • #58
797,342 Points 5 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

That is a great response to an oft-asked question.
11:14pm • #59

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Candy Miles-Crocker Realtor Real-Life Real Estate Training

Chevy Chase, DC

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