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What Do You Charge⁉ 😱 What Is The Rate⁉ 😤

By
Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

"What do you charge?"

If you own a business, don't you find it frustrating when the first question you're asked by a prospective client/customer is "how much"? Sometimes, over the phone, there's no introduction even, just a question blurted out as you answer.
(You scanners vs. readers, don't miss Jason's great quotes below.)

My response is to ask them some questions:

"Don't you want to know what I can do for you first?"
"Shouldn't you explain what your needs are of me, before I blindly quote you?"
"Maybe hear why I am different than your other choices?"

No two REALTORS® are alike; our services, our tools, our experience, our personalities, etc. and we definitely do not deliver cookie cutter services and stay in business for decades. Those that do, left the business after 2-3 years of being predictable.

"Most REALTORS® charge 6%, let's see what I can do for you, let's chat"...and then I start with my list of questions.

I wonder, do they go to their doctor, say they're sick, ask for a prescription and how much will this cost? No, you say you're sick, they examine you first, ask a lot of questions, then they diagnose you, prescribe you (maybe) and bill you.

 

 

I'm just like your Family Doctor; I need to know the answer to many questions before I just blurt out a fee. No two sales are the same because no two buyer's homes and circumstances are and there's many ways to structure negotiable fees.

 

I would hope sellers want to know what I can do for them and if I'm any good at doing it before they worry about my price? If you don't like my services, my fees will never matter - because you'll never hire me. I certainly need to know what is expected of me (timeframes, price expectations, contingencies, occupied vs. vacant, etc.) before I can put pen to paper. I also want to decide if I want to work for them; this is a mutual interview, not one way.

Now the great thing I'll share is this:
an internet lead, typically starts with "how much" more than 90% of the time. But, a referred prospect, typically never asks or asks much further into the conversation. Why? Trust! Someone's advocacy brought them to me, so there's more trust and less suspicion than a cold lead arrives with. Working relationally and 100% by referral affords me this conversation being less frequent.

Everyone wants a deal: I do too. I get it. But, I feel like if price is the only reason someone buys something or hires someone, they will end up spending more replacing the cheap product sooner than a quality product or redoing what service one did poorly the first time. I see it in the poor updates many homeowners do themselves or hire done cheaply - it typically looks it.

I do like when people ask to some degree, I see it this way:
"Oh you want me to demonstrate my negotiating skills! Great! You should make me show you how good I am, it's 33.35% of the reason your hiring me as your REALTOR®!"

I know my lender and friend Jason Gordon deals with this and he so adeptly advised us in The Rain this week his position and it bears quoting here:

Here's a great summation quote from
my #1 Trusted Lender
Jason E. Gordon:

"Folks, there really isn't much value in lenders quoting "generic rates" as there are too many different factors that go into a customized rate quote, which include FICO, LTV, Loan Amount, Property Type, Occupancy Type, program, etc.  Further, once those characteristics are known, there are always multiple interest rates on the rate sheet for each program (points for lower rates, credits for higher rates, etc.).

If you do not have an NMLS License, you technically cannot quote rates without violating the law. With all the above in mind, I recommend you contact your trusted lender and have him/her provide a customized quote for your client. Just makes much more sense for everyone to stay in their lane, while providing the consumers with accurate information."

Photo by Ketut Subiyanto: https://www.pexels.com

Photo by Karolina Grabowska: https://www.pexels.com

Photo by MART PRODUCTION: https://www.pexels.com/photo/people-woman-sitting-technology-7088526/

Posted by


Thomas J. Nelson
REALTOR®, CRS, RCS-D, CDPE, e-Pro, Certified Military Home Specialist, Luxury Home Specialist, Author, Keynote Speaker and  Podcast Host 

Serving Coastal San Diego from Carlsbad to Coronado, Downtown, Balboa Park Area,
La Jolla/UCSD & Mission Bay Park Areas
I Offer Rebates to Veterans
& Active Duty

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(858) 232-8722
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RCS-Divorce     Southern California Chapter of Certified Residential Specialists (CRS)

 
 
Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, medical advice or financial advice.  For legal advice see an attorney.   For tax advice, health or financial advice see a tax attorney, certified public accountant, or other qualified professional.
Eva B. Liland Century 21 Doug Anderson
Century 21 Doug Anderson - Lancaster, CA
Glad to be of Service 661-714-1643

So very true, with 20 years experience, you ran across so many different kinds of clients. I'm fortunate enough myself to seldom have to answer that question. When I do, my answer is a little different but kind of similar to yours.

Jul 17, 2022 10:25 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Thomas - business owner asked me to speak to his operation about help them.  First word out of her mouth was What is you  blended rate?

Jul 17, 2022 11:19 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Good one Thomas- and a great point- if you don't like what I have to offer of if my services won't suit your needs, then it doesn't matter what I'm charging. 

Jul 17, 2022 04:48 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Good point. It's important to know what you're paying for first!

Jul 18, 2022 04:57 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Honestly, I don't mind when that is the first question out of their mouths since it gives me good insight into what type of person they are.  I will confidently tell them what I charge and if they balk at it then I know they aren't someone I care to know, let alone work with, haha.

Jul 18, 2022 05:22 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Terrific post, Thomas... over time I've become less and less interested in talking to people who start out with that question... especially when they call and don't even introduce themselves. 

Jul 18, 2022 08:43 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Carol Williams my recommendation for your Second Chance Saturday post, Carol. I know I missed giving you one last week. :)

Jul 18, 2022 08:44 AM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

1. Nina Hollander, Broker agreed, I typically will joke with them because at that point they stand little chance of working with me anyhow, but I figure if they have a sense of humor, I'll give them a second chance.

2. I'm honored thank you!

Jul 18, 2022 08:59 AM
Jason E. Gordon
CMG Mortgage, San Diego, CA - San Diego, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Excellent post Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets (and sincere thanks for citing my quote/photo in your post).

Without going on to my soap box here, if every Real Estate & Mortgage "Professional" held their line on fees/services, we wouldn't be engaged in the current "race to the bottom" where everyone drops their profit margins further & further until they ultimately run themselves out of the business.

Revenue - Expenses = Profits (this is the equation no matter what business you are running)

Jul 19, 2022 08:15 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Thomas. First I need to get a handle on what the process is going to be like. Then, we can discuss my fee. Understanding the scope of effort involved is key! Enjoy your day.

Jul 23, 2022 05:51 AM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
The Grit and Gratitude Agent

When people have a price mentality, this is a good indication they may not be the best clients.  For years my standard response to that question "Is thank you for asking and please if you would share with me why that appears to be the most important question on your mind." This question has always dumbfounded most people and boy do you learn a lot.

Jul 23, 2022 06:17 AM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

It's interesting Thomas that I can't recall in many years of any clients that have asked me what I charge.  Of course most of these folks are repeat clients or referrals - well in fact all are really so this just doesn't come up.  I do remember learning how to create a sliding scale of what offerings I did for what amount and back then it was very effective.  That kind of quietly slipped away and wasn't needed anymore.

Jul 23, 2022 10:39 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

I am the highest commissioned agent in the area. If I find someone higher, I will raise mine. My repeat and referral clients don't ask.

Jul 23, 2022 12:44 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Jul 23, 2022 06:56 PM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

Kathy Streib WOW! I actually discovered this honor from your post, not mine! 😂
Thank You!

Jul 24, 2022 07:13 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Thomas,

I am going to bookmark this.  I have a standard fee for repeat clients, but I never cut back on the services I offer them.  You are right on point on how you deal with people like this.

Jul 24, 2022 09:17 AM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Hello Thomas,

    Excellent post.  'Deals' are usually more expensive and frustrating in the long run.  It is much easier now to understand the ability to graciously walk away from a 'deal' hunter.  Early on not so much so.  Excellent post.  M

Jul 24, 2022 03:07 PM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Congrats on the feature, Thomas, well done! Most clients recognize the value of the agent rgwt hire and the appreciate the excellent service they provide. At least mine do.

Jul 24, 2022 06:22 PM
Margaret Goss
@Properties - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

A very timely post as I'm about to dive into the commission question with a potential client who is asking that I match the discount broker. No, I won't match it, and here's why . . .

Jul 25, 2022 08:28 AM