Commision Haggling. Is this an Auction or a Listing Appointment?

Real Estate Agent with Five Star Real Estate

04-28-50There was an (Associated Press) article printed a while back in our local newspaper The Grand Rapids Press. It was titled "Haggling over real-estate commission fees wont hurt.". I had pondered this article with thoughts of what the public perception of realtor's and their services might be. I decided the article deserved a response in the form of a letter to the editor, but in the end decided not to send it. I don't know whether I should have or shouldn't have submitted it but my feelings have remain the same. Although the article was written last summer I have thought about it often as to how our industry has been changing over the past few years.

I would like to share the letter with you, my peers and fellow real estate professionals, and see if you agree with my response or the article. You will want to first read the article (highlighted as a link).

My response:

 Dear Editor,

In regards to the article titled "Haggling over real-estate commission fees won't hurt" (an article that minimized the professional services the real estate industry provides as something to be haggled over).

There is a misconception that realtor's make too much money for the services they provide. The facts are that the operating costs for a real estate professional are more than what most people realize.

   Average Overhead Costs:

      Brokerage fees

      Association (Multiple Listing Service) dues

      Advertising- newspaper, website, flyer's, signage

      Office expenses

          phone, fax, cell phone,

          printer, scanner, computer, camera etc

          Secretarial fees

      Auto expenses and fuel

      Annual classes and insurance

      Quarterly taxes

     Avg annual expenses: $20,000.00 - $35,000.00 

Another misconception about this business is in regards to the services that real estate professionals provide. Most people view our work in terms of the initial transaction - a sale or purchase of a home. There is far more to making a sale come together than driving around clients or putting a home on the MLS. It takes hundreds of hours to do the kind of work we do for our clients; research homes, set up showings, meet with clients, network to produce a sale or purchase, enter all data on MLS and website per each listing, stage homes, photograph, edit and down load pictures, consult with sellers for home staging and appearance, open houses, follow up feed back calls, write offers, negotiate offers, inspections, negotiate inspections, follow up with lenders, consult at closings and the list goes on. There is also a considerable amount of hours spent with clients advising them in order to help them make the best decision.  This is not really a 9-5 job, at least for a majority of us. This is a lot of nights and week ends. I personally avg. 60 - 70 hrs per wk.  I am not complaining. This is a wonderful profession but it does require long hours and hard work that occasionally rewards realtor's a commission and sometimes it does not. We do not have a guaranteed paycheck for the hard work we do each week for our clients. Not every listing sells that has had hours of time and  marketing dollars poured into it and certainly not every buyer, that has had numerous hours spent with them in looking for the perfect home, results in a purchase. There are many unpaid hours of work in this profession.

The article "Haggling over real-estate commission fees won't hurt" is contradicting. The last line of the article ends with a quote by Alex Perriello stating "real estate commissions are determined between the sellers and their agents, but the best advice I can give home sellers is that it is far more important to focus on an agent's performance, especially in today's housing market." I couldn't agree more. Sellers should understand what they are getting in the way of services and understand those services are deserving of fair payment.

Does haggling hurt? Like most things- you get what you pay for. I know there are some sellers out there who have been disappointed with the service they got when they haggled. I know, because I eventually gained them as a client and was able to provide them with the kind of service it takes to get the job done well and efficiently.

Thank You.

That was my response to the editor and, as I mentioned,  I did not end up submitting it.

In conclusion, I know the Realtor has the right to decline the listing if he or she does not want his commission reduced or haggled over. I also am not trying to knock fee for service real estate companies or agents. Sellers choosing these types of companies/agents typically understand upfront that they are getting al acart services and they themselves will be handling certain aspects of the transaction and marketing. So please don't misunderstand the nature of this post.

I would love it if you would share with me your experiences with "haggling" and how you handle these situations.  It is not my intention that this turn into a negative post. I would just like some honest feedback and maybe some helpful ideas for listing appointments that can be shared. I know times are tough for many sellers and we have to be open minded. Times are tough for a number of realtor's as well.


Sue Prins

Five Star Real Estate

visit me online @


Comments (7)

Terry Chenier
Homelife Glenayre Realty - Mission, BC


Use the 6 one dollar bills trick. Lay 6 bills on the table.

Then say "Here's how commissions work".

Take 3 away and say "These 3 are to attract the other agents"

Take 1 away and say "This one pays for all my office expenses"

Take 1 away and say "This one pays for marketing your property"

"And the last one feeds my family"

Where would you like me to cut the commisions?

(It also helps if you pout).

Apr 08, 2009 02:43 AM
Sue Prins
Five Star Real Estate - Forest Hills, MI
Realtor- Greater Grand Rapids, MI

TERRY-I love this response. I will try it!!!

Apr 08, 2009 02:49 AM
Tim White
Coldwell Banker Woodland Schmidt - Hart, MI - Hart, MI

I am so going to the bank to get six crisp, new, one dollar bills this morning! Thanks Terry!

Sue - Unfortunately, haggling is standard operating procedure these days. I know of several agents who have reduced their commission in the last year or so. This sets a precedent, sadly, that only hurts us all. I take a firm stance with my customers, and work to visibly demonstrate the value I provide them. I also remind them that if I will cave on my potential earnings, how do they think I will handle the negotiations for the sale price of their home? If I have no problem giving my money away, surely I will have no remorse giving theirs away, right? That being said, I recently lost a nice listing because I held my ground. He went with an agent with a lower commission. I told him I'll be happy to talk to him when the listing is ready to be sold next year.

Apr 12, 2009 10:43 PM
Sue Prins
Five Star Real Estate - Forest Hills, MI
Realtor- Greater Grand Rapids, MI

Hey Tim- Did you ever try the six crisp o0ne dallar bill method during commission haggling yet? I c\have some listing appointments coming up and I was thinking about this again.



May 20, 2009 04:58 PM
Sue Prins
Five Star Real Estate - Forest Hills, MI
Realtor- Greater Grand Rapids, MI

Hi again Tim- I am laughing at my typing in my comments to you. I just got new nails put on ( have to relearn how to type with them) AND it is 1:00am so just so you know I really do know how to type but under the circumstances not so well. ha ha

May 20, 2009 05:02 PM
Ed Vogt
Midwest Properties of Michigan - Grandville, MI
Grandville, MI Midwest Properties

Hi Sue - that was a well though-out letter you were going to submit. 

I just dropped by because I was reading Lola's post about you :)

Jul 02, 2009 03:34 AM
Sue Prins
Five Star Real Estate - Forest Hills, MI
Realtor- Greater Grand Rapids, MI

Hi Ed! how are you sweety? I miss seeing you. I need to get my but back over to God's Kitchen. I had have been a bit overwhelmed but once I get back from Africa I think things will be a little more settled down. We have been training for the trip and my real estate business picked up which has been such a blessing with my husband still out of work. Praise God for His Faithfulness!

Jul 02, 2009 04:04 AM