Why My Clients Never Ask me for a Discount!

Why My Clients Never Ask me for a Discount!
by John Occhi, Hemet REALTOR®
Hemet CA Real Estate

Helping a Client make the right decision is an important task, one that I just discussed in my most recent blog post here on Active Rain.  If you have not yet read it, I suggest you do so now, before reading this post.

Once my clients had decided that the right price was set for the sale of their home in this market, that has an average of 110 days on market, they thought all the tough decisions were over.

I shared a little technique with them. 

Apparently, most consumers today believe that a REALTOR is overpaid and because of all the discounters who have entered the market (that's another rant in itself - so stay tuned) many sellers today believe they will save money by only offering a 5% (or even less) commission to the REALTORS to sell the home.

I happen to disagree and I let my clients know why.

First, I ask them if they have ever take a pay cut, and if so, how did it make them feel?  No one wants a pay cut.  I go on to explain the difference between 2 1/2 % and 3% is not ½% but rather 17½%.  I then ask them to consider how motivated they might be to go to work with a 17½% pay cut.

I explain that about half of the listings in the MLS today are offering the buyers agent less than 3% and nearly all of the remaining half are offering 3%.  I break out the actual statistics and share with them, as it relates to their particular aspect of the Hemet CA Real Estate market.  I go on to show them how many EXPIRED listings offered less than 3% and I show the average DOM for an SOLD, with less than 3%.  Of course, I show them the average and then the same results for the 3% listings.

I then show them the statistics on the listings that offered over 3% commission.  Needless to say, the numbers are greatly improved.

Nest, I share that there is no set price for any piece of real estate in Hemet California or anywhere else.  There is always an acceptable range of several percent, in the price.

So to use the example of my client from the previous post, they decided their home was adequately and fairly priced at $350,000.  At a 6% commission, they would have paid $21,000 in total commissions.  (I point out, at 5% they would have paid $17,500).

I then go on to claim that to motivate every REALTOR in the Hemet San Jacinto Valley, - to really get their attention that they should consider raising their price to  the higher limits of the price that I had suggested - $369,000 and offer an 8% commission or $29,520.  Now REALTORS will pay attention.

We're going with the higher end of the acceptable range and the higher commission.

Did I mention I love my clients?

Until then, Have a Blessed Day

John Occhi, Hemet REALTOR
http://www.johnocchi.com/