As I wrote a response to a recent blog by Sara Lipnitz, I felt the response was too long and would make an excellent blog on commission cutting. Often times we are confronted with the request or demand to reduce our commission. Coming from a prior brokerage where it was prohibited, we got real good at protecting our commission. When we left for our current brokerage, we could do as we please, so we had to learn effective dialog for fending off the vultures!
One method (albeit very visually blunt) is to explain that you as the agent aren't striking it rich by getting the entire commission & breaking it down for the client. An excellent visual is to pull out 6 dollar bills. I then take 3 dollars off the table and explain that this is the co-broker's fee. That leaves 3 dollars. Of that, technically 1/2 goes to your broker, 1/3 goes to the IRS, and I have expenses to run my business (car, insurances, cell phone, E&O, advertising, computer maintenance, supplies, gas....) I then take the last remaining dollar, tear it in half, and hold the remaining piece up and waive it in the client's face. I then say "how much of this would you like?" They are usually too embarrassed to ask again.
(then you need to figure out what to do with the dozens of 1/2 dollars)
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