Everyone knows commissions are negotiable, up as well as down. So, why is it that every time the discussion comes up with a seller or buyer, they want to know how much we will cut ours? Despite that, there are agents today who are getting above-average commissions. Others are maintaining their "preferred" commission. While still other agents are beat up on a daily basis. What is the difference among the three scenarios? A combination of skill, market knowledge and a willingness to negotiate makes the difference. Before we tackle the how, we believe we must look at the reasons behind the prevalence of commission cutting.
With the growth of the Internet and the dawn of online, do-it-yourself realty, sellers and buyers feel they must bring up the question about reducing commissions. It is a matter of principle to both sellers and buyers. If they feel they can get you to work for less money, and often they can, why should they not ask? Too often, we are thought of as being just like other competing companies. They have looked at one, and they think they have looked at them all. Most sellers and buyers think it is only your commission that distinguishes you from another agent.
Nothing is farther from the truth. To warrant the commission we deserve, we need to create credibility to support what we are asking for. Often, the battle is lost even before it gets under way. The seller or buyer asks for a cut, and the agent agrees...simple as that. When agents are asked why they do not give their all to overcome the objection, they have said if they do not take it at a cut, someone else will. Or, they needed the listing or sale, or their broker said to take it no matter what, and on and on.
Other reasons why sellers and buyers ask are they need every penny they can get (protecting their net), the other agent said they would take it for less or they feel the commission is the most important thing to them. They are bargain basement shopping. This is the type of seller you may want to decide not to do business with. Smart agents know when to walk away from a seller or buyer. Remember, if it is not salable, it is a liability, not a listing.
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This week's document: Overcoming Commission-Cutting Requests
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