Cut my commission?

Real Estate Agent with ProStead Realty Charlotte, NC CRS SRES NC License #115457

Mr. and Mrs. Seller

I respect the fact that you've asked me to cut my commission.

My answer to you is, I've already cut my commission. How, you may ask?

Well, over the past few years, home values have dropped 20, 30, 40 percent and more. At the same time, real estate sales are down over 50 percent. This equates to a 70 percent or more cut in my income, while at the same time, my expenses continue to rise.

My question to you Mr & Mrs Seller, would you be willing to cut your pay by 70 percent or more?


Your Realtor


Re-Blogged 1 time:

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  1. John McCormack, CRS 01/19/2012 03:02 PM
charlotte nc real estate

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Lisa Henderson
Realty By Design - Norwalk, CT

As a "discount" broker, I have to disagree with most of the comments here. 

  1. Most consumers are knowledgeable.  They know the agent isn't getting the entire commission.
  2. From a seller's perspective - the fact that we've all chosen a career with income based on housing values sounds like a personal problem for us.
  3. "Discounters" value their time just like everyone else.  Not only do I value my time, but I value that of my client's as well. 
  4. The statement "if they are that quick to drop their commission imagine how easily they will be to give in to the other agent when an offer is presented, agents that reduce are not working in their clients best interest but are desperately working for their own" -  Not sure what commissions have to do with transaction negotiations.  I've heard this argument before and it's old and innacurate.
  5. Even medical care can be negotiated.  I've had my dentist reduce the cost for certain services just by asking - doesn't make him a less qualified dentist.
  6. If a previous client called and had 2 properties and wanted to negotiate - heck yeah, I'd at least talk to him - that's just good business. 

Reputable brokers like myself earn business, keep business and get referrals by doing a great job for our clients. Oddly enough, since operating as a "discounter", I've never had a seller ask me to cut my commission.  They clearly see my value.  I offer full service marketing at a price that sounds fair and makes sense to most sellers. I even offer options if a seller prefers to retain the right to sell on their own. 

I think we'd all be better off, when we recognize that comsumers deserve to have choices when it comes to the services and products they buy - real estate included!

Jan 20, 2012 01:53 PM #42
1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Mitch, Short, sweet, and to the point.  Hope things get better for you soon.

Jan 20, 2012 02:12 PM #43
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Mitch - This is simple and to the point.  I think they will also consider their value has been cut too.

Jan 20, 2012 02:17 PM #44
Barbara Altieri
Kinard Realty Group Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

Mitch -- Great answer.  That should be the end of the discussion!

Jan 20, 2012 03:00 PM #45
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY

Being upfront and confident with yourself and what you bring to the table as representation is always a very sound approach.

Jan 20, 2012 03:19 PM #46
Luis Iniguez
Option One Real Estate - Fontana, CA
Search Inland Empire Homes For Sale - Short Sale Agent

Great answer Mitch.  People should understand the blow we have taken by this market.

Jan 20, 2012 03:51 PM #47
Dan Tabit
Keller Williams Bellevue - Sammamish, WA


I often tell people, a good agent is worth more than their commission and a bad one will cost you way more than just a commission.  Discount agents aren't automatically bad agents, just like paying more doesn't automatically get you a better agent, but a great agent is a value at whatever price it takes. 

Jan 20, 2012 06:25 PM #48
Cheryl Ritchie
RE/MAX Leading Edge - Huntingtown, MD
Southern Maryland 301-980-7566

Well, if that does not say it all. Plus, it s expensive being cheap is one of my favorite expressions.

Jan 20, 2012 11:44 PM #49
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY

I am by far not the cheapest broker in my area. That said, I can appreciate Lisa Henderson's (#42) dissenting opinion. The market does have ample room for discounters, especially good ones, although I hate the term "discount"- all fees are negotiable. 

I think it is all when the reduction is discussed. Up front, when perhaps Ms Henderson and myself are vying for the listing? Absolutely fair game. 

At offer time, when the price I have warned for months is on the table and not the speculative dream the seller had? Sorry, I'll decline. I won't subsidize unless there is hardship, and those that know me know my generousity. 

My experience, escpecially from my days as a flat fee broker, tell me is that sellers seldom grasp that the commission is a line item in a bigger picture and that they'll often net more with a better agent. We can't raise market value but we can sure avoid a sale that end up below it. 

Jan 20, 2012 11:54 PM #50
Shay Campbell
Universal American Mortgage Company - Raleigh, NC
Raleigh, NC

Simple and to the point.  I like it.

Jan 21, 2012 12:29 AM #51
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

Well put! I am worth every single dime of my commission! Do you ask your doctor to drop his fees in half?

Jan 21, 2012 12:52 AM #52
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I can never say never... meaning each case is individual for me. Home owners are real people, sometimes on that ledge of being able to sell the house or losing it to foreclosure. Too often they are looked at as numbers or ratios and not people. I prefer to work with each seller and look at each case. A lot of sellers learn quickly that discount fees most often equal discount services. In a buyers market sellers need every advantage they can get and that inludes full time, full service and local agents working their hardest to get the house sold. Some homes will take more time, more resources and more money in marketing to sell. In that case it is better to be up front with the seller and decide what my time is worth to tackle it. Some listings you have to decline as impossible to sell due to be way over priced or the seller is just not understanding the market. For the sellers who do, it will lead to an easier and quicker sale.

Jan 21, 2012 12:54 AM #53
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Mitch,  Your well writen post says it in such a clear and understandable way.  Well done !

Jan 21, 2012 02:06 AM #54
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

I feel blessed as a realtor and it depends on who asks me to cut my commissions and why.  There are other ways to make things easier for a seller - but for those sellers that don't need help, etc. I like your answer!

Jan 21, 2012 03:02 AM #55
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
SVP of Mortgage Lending, Marin County

I don't mind at all when clients ask, "Rob, how do you get paid on this?"  I'm happy to explain how loan commissions work.  Sometimes, but rarely, I'll work with someone who will press further and I can tell that they're going down the "commission" road as you mention above.  They want me to get them a (real or imagined) better deal at the expense of my income.  I still think it's fair play, but at this point, the question I ask them is, "What do I deserve to make on this transaction?"  Once they provide that number, which they rarely feel comfortable doing, I can decide if continuing to assist is in all of our best interests.

Great post.  Thank you!

Jan 21, 2012 04:03 AM #56
Lori Cain
eXp Realty - Tulsa, OK
Midtown Tulsa Real Estate Top Producer

Love your chart.

My answer to cutting my commission is short: NO.

Jan 21, 2012 06:51 AM #57
Jennifer Blanchard
Berkshire Hathaway HomeServices NJ Properties - Basking Ridge, NJ
No Obligation, Just Information

I don't know, Mitch,  I don't think I'd go there with a potential client.  I'm not sure they care about YOU...  this is where you need to illustrate the value you bring to the table and how a discounted commission will cost them time on the market and quite possibly a lower sale price.

Happy Day!

Jan 21, 2012 07:46 AM #58
Michael Adams
Keller Williams Cornerstone Realty - Franklin Township, NJ
I Never Forget You Have A Choice!


Mitch, Great topic.

I faced a seller who after agreeing to a 5% commission, wanted to cut it after accepting an offer lower than his expectation but higher than market value. This was a very different situation than asking for a reduced commission during a listing presentation. Due to original list price I had already agreed to a commission less than 6%. When asked for the reduction, I provided, in bullet points, the work I did on his behalf and pointed to the failure(s) on his part to act on the things I suggested that would bring a quicker sale and sale price such as; improving curb appeal, making minor repairs and reducing the list price to adjust for market changes. I explained that the reduced selling price automatically reduced my commission. For all of these reasons I told my seller I would not reduce my commission; even at the risk of not completing the sale.

Further, during negotiations the seller expressed that he did not wish to renegotiate with the buyer who requested compensation for all the faults outlined above. My response to the seller was; just as you feel it to be unfair to ask for reductions on what had already been agreed to, I feel it just as unfair to ask me to reduce my commission, now. In the end, the deal was closed at the full commission that was originally agreed to. Oh, although the seller sold for less than he had hoped for, he sold still for an above market value price.


Jan 21, 2012 08:48 AM #59
Mitch Muller - Charlotte NC Real Estate
ProStead Realty Charlotte, NC CRS SRES - Charlotte, NC
Certified Residential Specialist

Reba, I agree with Valarie, I like how you answered that.

Steven, That's a really good answer up front!

Hannah, I didn't even realize this was a featured post until I logged on a few minutes ago. I was so excited! This is only my 6th post!

Joe, There's a place for discounters in any market. You get what you pay for.

Eric, NO! :-)

Jayne, So far no objections!

John, That's a really good line too that I'll use.

Leonard, Excellent article I saved!

Frank, I like that one!

Lisa, there's a place for discounters in this business and I've known several over the years, none that sustained. And none would show me their budget when I asked to see how they could be very profitable.

Dan, I agree with you on that 100%!

Philip, very well put!

Scott, agree! Another line I picked up somewhere, "I would rather turn you down now, than let you down later".

Jennifer, rarely comes up when I give a PP presentation. Actually happens more on the back end when negotiating.

Michael, Great approach and way to stand your ground!

Thanks to everyone else I didn't respond to for all the comments! I've learned a LOT from this post!

Jan 23, 2012 11:12 AM #60
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

Here is our answer to this situation ~ No, No, No...NEVER!

Jan 27, 2012 01:12 AM #61
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Mitch Muller - Charlotte NC Real Estate

Certified Residential Specialist
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