Answering the question of cutting your commission

Very good point. I have never heard it presented this way.

Hi Mimi Foster I push your buttons? Oooooo I'm sorry to hear that. And you want to pour coffee on me? Well, I guess our friendship is alive and well. Only a friend would do that.

As for your Grandfather, back in 1920 they didn't have the technology we enjoy todayu. They had to do a lot more work to earn their commissions.

And, as for rebates, California is one of the highest regulated states for real estate AND rebates are legal here. After all, it is just a return of the buyer's money.

I "value" my time and expertise at about $500 per hour. Since there are no $150,000 houses here it is pretty easy to reach this number.

Sorry about those buttons.

Bill Roberts

I cut a client loose whose math came up WIN for him and everyone else is on a WE WILL SEE...NO, I wont be there to see....

I agree completely with Richie, #41. If your future client doesn't meet your client profile, simply but politely, walk away. You'll earn more opportunities IMO from clients that meet your profile from their referrals and introductions, however, if agents are fearful, that indicates more coaching and training is necessary. Great post.

Mimi, Great discussion taking place here.  I believe Bill Roberts would look good wearing coffee. Just make sure it is not hot coffee. 

I can see this as a help for newer agents. I am a little more simple in my explanation now... I have experience. I have success. I am good because I get results. My commission is not negotiable.

Mimi - that's a great and graphic demonstration. Most sellers don't even understand how spliced up the seemingly huge commission gets and how little is left for the listing agent at the end of the day. 

Mimi, this is the first time I have seen this and I will start carrying 6 $1 bills with me to each listing.

Thanks for sharing!  I am going to try this!

We are still asked by a client from time to time to match a lower priced inspector's fee and occasionally even by a Realtor. Of course, there are two possible answers, yes or no. Being a little lazy I always choose the shorter answer. Have a great weekend!

I LOVE the idea about using dollar bills. For me each case is individual, i will use a similar talk to explain how commission works and where it goes. Some sellers will care, others will not. Some sellers want to pay the lowest possible and often learn a good lesson for their efforts only coming back to do it right 3 to 6 months down the road when their house has not sold. 

Nordstarm does not panic when Kmart has a sale.

What you point out is one of the hardest feats the new agent must accomplish, that is knowing their value.

Each one of us can easily list unpleasant outcomes that could have resulted had we not been part of the transaction. How the life of the buyer or seller would change if they hired someone asleep at the wheel.

When we, the real estate professional, actually see the role we fulfill, the race to the bottom in compensation ends. If the role is not seen, the agent has few options.

The problem with the Nordstrom vs. KMart scenario is the client doesn't see us that way. They see us as Home Depot, many aisles of stuff that we don't know what it does but all the same for improving a home.

While the $6 is a good idea if in front of a person, it doesn't work so well over the phone, where many sellers make decisions these days.

Hi Mimi,
I love this strategy.  I worked for a discount broker at one point in my career. When I left there, I never had a problem justifying my commission.  It was an enlightening experience.

That is a great way to handle it.  Thanks for the post.  

This is a very effective close, one I have used many times and so good to see you have mentioned it for everyone to benefit. Thank you!  The fact of the matter is when the seller wins this negotiation, and the agent folds, we've just shown who is better at negotiating...right?  I often have shared with the seller the following concept.  They ask for the commission to be reduced or say another agent said they would reduce their commission.  I'd propose this for them to think about.  If you knew getting an agent to reduce their commission could actually end up working against you, would you still want to do this?  This question typically causes doubt and curiousity, which is exactly what you want to occur.  Mr/Mrs. Seller, you realize that one of the most important skills you are hiring me/an agent to do is negotiate on your behalf and protect your equity, correct?  If I agreed to anything less on my commission, then I would clearly be demonstrating you have superior negotiating skills than I do.  That would be a huge concern if I was you, since that is one of the most important aspects of me representing you, right?  So, if another agent was willing to do this...think long and hard about it as you may think you're getting a deal now and end up losing more money with poorly negotiated offers on your behalf. 

There are many ways to respond to commission objections.  The key here is to find "your" style in how to respond, practice it often and you will be in a good position to overcome the objection and move past it. 

Mimi thank you for your post, I am going to use this example.  This was one question I could freeze on...lol.