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Negotiating the commission

By
Real Estate Agent with Homes Plus Realty
I have been in the business for a few years now, and like any agent who has taken on a listing I was asked to cut my commission.  To give you a little background to this story, I was referred to a very prominent divorce attorney by my wife.  I called the attorney shortly after receiving the referral to speak with her.  She proceeded to inform me that her client needed to sell their home immediately, and could I meet with them at the soonest possible time.  I made the appointment for the following day meeting her client, their spouse, attorneys representing both sides of the divorce, as well as a mediator.  Since the couple were not on speaking terms, I had to meet with each spouse in private giving each my listing presentation.  Mind you this would have been my fourth or fifth listing.  Needless to say one of the couples wasn't happy with me listing the property, and neither was happy with the 6% sales commission.  When I finally met with both attorneys and the mediator both attorneys were not happy to let me list for the "measly" 6%.  They both asked me to cut my commission as their wasn't enough money to go around.  In my infinite wisdom I pulled out an absolute classic....I looked at both attorneys and asked them how much of a discount they had given their client on the divorce case, they both informed me that their work load wouldn't permit a discount.  The mediator had to be just tickled, as I had made her job way too easy at that point.  I got 6% and more importantly a much larger respect from both attorneys, and my client.  I should have gone for 7%!!!
Johnny Huang
Pleasant Hill, CA
Insurance and Real Estate Broker

Great story!

Goes to show that if you stick to your guns and be firm on what you believe/want, You can make a reason not to cut that commission.

We all need to make a living.

Feb 18, 2008 04:33 AM
Maria Couto
RE/MAX Premier - Berkeley Heights, NJ
Realtor with "Results That "MOVE" You'
Way to go Peter. You know no one ever asks an attorney or a doctor to lower their fees. Sometimes we just don't get the respect we deserve.
Feb 18, 2008 04:34 AM
Paul Silver
Tiverton, RI
Rhode Island full service real estate firm

Good for you!!!! We never cut commission or fees, but sometimes it is a tough fight... your approach seems to be the most effective though...

Keep up the good work... 

Feb 18, 2008 04:36 AM
Steven Keefe
Coldwell Banker Sky Ridge Realty - Lake Arrowhead, CA

Hey Peter,

I am going to share your story with my team.  You are right you should have gone after the 7%.  In this type of a market where 25% of listings are selling (CA), if you are attaining results, why not ask for a higher number.

Have a great one

Feb 18, 2008 04:43 AM
Bob Schenkenberger
Colorado Realty Professionals - Greenwood Village, CO
Denver Real Estate
Way to stick to your guns!  I find it funny that attorney's always think that fee reductions are for the other guy.  I also think they do this to justify their fees.  Perfect response!
Feb 18, 2008 04:45 AM
Erica Crowell
eRealty Inc. - Wake Forest, NC
Hey, you cannot knock them for "trying" to negotiate.  However, that's part of our business too.  I would have gone for the 7% and then said well, I understand this is an emotional situation, I willing to give a 1% credit to each of them when they buy a home from me in the future.  This will give each of them an equal benefit once they have moved on from their divorce.
Feb 18, 2008 04:50 AM
Renae Bolton
Marketing 4 Realtors - Garfield Heights, OH
I'm your Professional Real Estate Marketing VA!

Peter - Great way to get your point across.  Funny how we never ask the plumber or cashier at Wal-Mart to reduce the price on anything.  We just pay it.  But then, when it comes to entrepreneurs, the simple term itself means "see if they are gullible enough to drop their rates for me."  And gullible can be switched with a ton of other terms - eager, able to be bullied, suckered.  Good for you for sticking to your quoted rate!

~Renae

Feb 18, 2008 05:13 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Peter, good for you for sticking to your guns. Your response to the attorneys was an absolute classic.

Great post!

Feb 18, 2008 12:40 PM