How Do You Deal With a Request for a Rate Reduction?
by John Occhi, Hemet CA REALTOR®
Hemet CA Real Estate
Once you have a listing and it has been on the market for a short time, yet there really hasn't been very much activity, you will probably approach your client to discuss a reduction in the asking price.
SIDEBAR: My rule, which I discuss at the listing presentation, is that we will DISCUSS a price reduction after either 12 showings or 21 days, whichever occurs first.
So now you bring up the idea of reducing the price and the first thing the seller fires off is they want you to reduce your commission. What do You Do?
Well, if you are very confident you might suggest that you were actually going to suggest they raise the commission so that you can generate some excitement in the REALTOR® community. If you haven't read it yet, you might want to check out the article I wrote on the topic.
You can show your client your proven results - comparing your average Days on Market and your list price to sales price ratio with the MLS and other agents you know they have considered.
Focus n your marketing plan. Let them know there are still many more activities planned and that there is hope for a sale very soon, if the price is right. I wrote a 5 part report on pricing a home to sell that you might want to revise for yourself and share with your clients (the link is to part 5 - but is has links to the other 4 parts)
Sometimes I may step up and offer to pay for the Home Warranty or something - to show I am willing to put more into the transaction. I remind them of how much I have spent, have committed to spend and just how the commissions are split.
I like to use the fact that a ½% cut is actually a 17 1/2% cut in my earnings and I do not know how any business can survive, let alone thrive with 17% reductions in their revenue.
Sometimes I am asked if I'll reduce my commission if I bring the buyer to the table, to which I always politely say no and then explain to them about "dual variables rate commission' and how that can be the death of a listing. I recently wrote a blog article on that topic as well, you should take the time and read.
I hope this can give you some ammunition, the next time a client is looking to get into your pockets - please keep them out.
Now Have a Blessed Day,
John Occhi, Hemet CA REALTOR®
http://www.johnocchi.com/
Comments(4)