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I get this question a lot. Rather it's from buyer's or seller's asking me for money back at the close of escrow in exchange for their business, or agents debating amongst themselves, if lowering their costs exceptionally to get the business is the right thing to do.
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32 Comments on Should I Ask My Agent For a Portion of Their Commission? Part 1
Very well put, Stacey. I've had this conversation with both buyers and sellers many a time, even using drawings if need be. When asked if they would ask for a rebate/refund from their lawyer or their doctor or even a car salesman , they always answer no, but they see no reason why not to ask us. A few times, I was told that they were told to ask for it upfront by family members, but after a simple explanation, it seems to make more sense why no is the correct answer. And then after the job is done, there is never an issue
Catherine said it and said it well.
Catherine said it all
It amazes me that people will ask for some $ back. We never ask teachers, doctors, mechanics or pilots for some money back AFTER they have done their job. Why do they feel the need to ask us?
Another solution to this would be for the buyer and the seller to have to pay an hourly rate.... things would change very quickly.
Great post! Congratulations on the feature, girlfriend. Keep up the good work.
Great post Stacey, don't think I've heard this explained in this way before.
Stacy - as a home stager I work mostly with Realtors and can't believe the hard work and money they put in to listing a home. They earn every dollar they make and I'm glad you wrote this post and it was featured! Asking a Realtor for a portion of their commission is an insult and unfair IMHO.
I was inquiring at Costco one day about selling some things and I pointed out the profit margin to them. They responded that even though they can make more, they wont. They have a fixed profit on items..non negotiable too. I like it where everyone knows where everyone stands...Then, we can hold each other more accountable...Pay me my wages holds
I am here to disagree again and with some questions. Do you do less work on a $300,000 with a 3% $9,000 commission than a $500,000 with a 3% $15,000 commission? If so, how do you explain that to your customer? Especially if it's a referral from a good client. Do you really negotiate with less enthusiasm depending on what you will be paid? Do you show the house less or not talk to other agents about it? Do you not put it on all the marketing sites? Do you not hold any opens houses for it?
Would you ask your Doctor to discount his/her fee if you knew that they were paid differently for each patient for the same service? How would you feel if you knew your Dr. wasn’t giving you the best care because in your particular case, his/her fee would be lower?
A "producing" agent means to me a successful, busy agent. Does that agent really pay 1% out of each commission for their desk fee? I think in some lower price point areas, yes, but in higher ones, no. So that can't be a blanket statement.
I think if an agent cuts their commission upfront in this economy to get the deal, then they should go over the budget for out of pocket marketing and what they will do to sell the home with less to work with. I don’t think for the lower fee, the agent shouldn’t work as hard doing to the non-out of pocket marketing than on the next place they list. I mean it’s all about referrals right??
Just some thoughts. I think stating here that if you discount your commission you will not put your full efforts into the selling the home is downright wrong.
I do appreciate your input but I am by no means saying that I would NOT give my full effort if my services were discounted, because I don't discount my services.
I know my value as a professional, I know what my time is worth and I know the quality of service that I offer to my clients. As the consumer you can rather accept that or you can chose the professional that will discount their fees and risk not getting the quality service you deserve. That is up to you.
But as for me.. My level of service is consistant, regardless of the homes value. I give my clients the best service possible, and as long I come through with what I tell clients, which is getting their home sold for the most amount of money in the least amount of time, why would there be a problem for paying me for what you hired me to do and know I was worth EVERY penny.
However, your every penny changes by list amount. If you could step outside of yourself and be the seller, it would dawn on you that you paid more for the same service as your neighbor because your house sold for more. Where are those extra pennies going? Bonus for being chosen? It has to be a two way street. Sometimes you make more for the same service and sometimes less.
Our 2 cents is that agents who discount have the opportunity to go broke --- it costs money to be in business -- the perception by consumers some that agents are somehow raking in the money is very much mistaken. Our 2 cents.
Yes, the dollar amount I get paid does change by the amount the home was sold for, but so does my marketing strategy. The more expensive the home, less buyers to that particular pricepoint. The marketing that works for a $300,000- $400,000 home, won't exactly work on a $800,000-$900,000 even a million dollar home. The marketing that goes into the higher end properties does require more time, energy, resources (money being one of those resources) and effort.
So once I say my level of service is consistant no matter what the home sales for. That means that I am going to do EVERYTHING possible to get that home sold! That is my job, that is what you hired me to do, and that is what you are going to pay me to do.
Stacey:
You have written a post that is easy for consumers to understand why we don't discount our commission. I have recently taken the roll a a seller. My agent did everything I would do for a listing. She and the buyers agent found a buyer for my house quickly at a price that was much more than the list amount. I was happy with the results and felt paying her and the buyers' agent the full 6% commission was worth it.
Stacey, I missed this post somehow, so was glad Michelle re-blogged it. This is a question we're asked more and more all the time. And buyers ask for a rebate of our commission, too.
The consumer has more information available to them than before thanks to technological advancements. The consumer should be able to negotiate with the real estate broker.
Also, as an agent, you should have a buyer broker agreement in place so you don't have to worry about showing lower commission properties.
To Add to what "Consumer Input" said, as a listing agent, most likely your costs have decreased as well as we no longer use print advertising. I live in Southern California. Houses 10-12 years ago were going for around 200k. These houses are now going for around 600k. If I were a seller, I would think long and hard as to how much of my equity I would give in order to sell my property. Especially since over 70% of buyers find their home online and advertising online is free as compares to 2000, when we most likely had print ads.
Was going to just ignore this one but had to add 2 cents. In 1987 the average price of homes I dealt with was about $750k but then I suddenly started getting several listings at twice the price and more. These sellers wanted a discount based on the doing the same amount of work as when I sold one at half the price theory.
Well I soon found out the time and money I spent selling these homes was not even covered by the same percent and the final straw was when I got stuck with a $30,000 printing bill on a canceled listing. So at my next listing presentation, a $3 mil home when the seller suggested I list at the same 5% the big CB office offered and maybe I could do for them at 4.5%. I said I will save you a lot of time, I get these homes sold because of my connections and methods and I charge 8% on properties over $1.5 mil so I'll give you a few minutes to think about it and you can decide if the extra 3% for a sold sign is worth it to you, and if you decide to list with CB may I suggest you use so and so over there. That silence had to be the longest of my career before they said OK, where do we sign.
I actually hated the rich, they were either the greatest people or the worst, never seemed to be in between. My favorite story was when I showed up in a rolls Royce I had received a a partial commission, a new custom suit to complete the sale of an office building and when I got to the door and asked for Mr.X the wife lifted her head and with contempt said we can receive you at the servants entrance in the rear and shut the door. I walked back to my car and left. The husband called later upset and said please come back and I said the lawyers are here now and in about 10 minutes the building is going to be owned by so and so. I did get him a better building a few months later so he was happy but his wife was still a pain until she found out I was friends with a certain party and could be her way in to a certain group, she never changed though.
I gladly donate 10% of my commission to the sellers choice of charity or non profit, when they list with me. This is for Orange County sellers. I don't believe sellers should ask for an a portion of the agents commission. I believe you get what you pay for. However, I do believe that who sellers choose as their realtor will have a ripple effect. Employ someone that will also make the world a better place.