Answering the question of cutting your commission

When I was a new agent, this question used to panic me. The older I get, the more I want to raise my prices because I understand more and more the value I bring to a transaction. Mary Jane Harris posed a question on AR's Q&A section asking how you handle this objection. I no longer entertain the conversation, but if someone pushes it (I'm sure many of you have heard this, but I'm sharing this for newer agents), here is a lesson I learned early in my career.

While there is no standard commission and commission is always negotiable, let's say, hypothetically, my company policy is to charge six percent. When I go into a listing appointment, I have six one-dollar-bills with me. If someone pushes the question, I pull out the one dollar bills and set them on the table.

"Mr. Seller, let's say each dollar represents a percentage." I then separate three one-dollar-bills into a separate pile.

"From what you're paying me, this pile is what I have to pay the agent that brings the Buyer. Obvioulsly this pile is not negotiable."

There are three one-dollar-bills left, and I separate another bill into the non-negotiable pile. "This bill is for my overhead, taxes, insurance, and what I have to pay my company. This is not negotiable."

The next bill hits the pile. "This bill is what I get paid for working for you. It is also non-negotiable."

There is one bill left. "This bill is what I spend for your advertising, possibly negotiating inspection items, paying for a professional photographer, all of my marketing, Broker Opens, and whatever else we might need flexibility on as we come into the home stretch. Your advertising comes out of my pocket, and the expense is borne solely by me. Just how much would you like to cut the commission?"

Never once has anyone ever argued the question further. I haven't had to use it in a long time, but when I did, it was very effective.

Best answer of the night to Mary Jane's question was from Thomas J. Nelson, Realtor. He even wrote a post about it: Nordstrom never panics when K-Mart has a sale.

If you haven't already done so, click on the green Victorian home below and follow me on ActiveRain.

 

* * * * * * * * * * * * * * * * * * * * * * * * * * * *

If you enjoyed reading this post,
CLICK ON THE HOUSE to
SUBSCRIBE to Mimi's Musings

If you are not completely satisfied
you may unsubscribe at any time
and get double your money back!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

If you would like to search for Homes for Sale in Colorado Springs,

or for any of your other real estate needs,

please contact your Colorado Springs Realtor

 

Selling homes throughout Colorado Springs, Old Colorado City,

Manitou Springs and surrounding areas with a

Specialty in Victorian and Vintage Homes in
Downtown Colorado Springs