Got a question yesterday from an agent who was referred to a potential seller by an acquaintance. However, the acquaintance warned the agent (let's call him Sam) that the seller has a "friend who will list the house really cheap," so Sam may not have a chance at procuring the listing.
Sam asked me how I would approach the situation - how would I respond if the topic of commission comes up in their initial phone conversation? And how would I go about persuading the seller that I'm worth my "full" fee and that the "friend" may not even be worth her discounted one?
Wanna know what I told him? Okay, twist my arm.
First, I always recommend that we be upfront about what we charge if asked. I don't believe in deflecting the issue because it puts us in the position of being a salesperson instead of the professional advisor I feel we are. So, if Mr. Seller were to say "Sam, what do you charge to sell a home?" I'd advise Sam to answer the question without hesitation. No hemming, no hawing, no creative avoidance. Just get it out there on the table.
"My fee is X% to sell a home, which includes the buyer agent's fee of Y%"
If the seller responds with "Well, I have a friend who will do it for X-minus-2%..." Sam can say: "That's great - and that might be the best deal for you. But I'd still be happy to get together and talk about your situation, so you can be sure you're making the right decision. No pressure, I promise. And I'll respect whatever decision you make."
Reverse psychology ("that may be the best deal for you") works great here!
If the seller agrees to meet with you, that means he's probably open to paying your fee, if you can prove you're worth it.
And as you probably know if you read much of my stuff, that's a BIG DEAL to me - actually being WORTH the fee you charge... and knowing you're worth that fee. Getting the point of being and knowing you're worth it might take some time and soul-searching, but it's well-worth every minute.
(And by the way, BEING worth your fee has nothing to do with how much you NEED that fee).
Anyway, I digress. Next question - once you're face to face with the seller - should you address the issue of your competition's lower fee head-on?
Whatcha' think? (I'll share my thoughts tomorrow.)