Starting to Think Differently: Finding ways to maintain my commission.

By
Services for Real Estate Pros with Agent Revenue

People who have been in the industry for any length of time can easily remember a time when the level of respect and camaraderie among agents wasn't rare, it was expected.

Real Estate is a cut throat industry.  When given the chance, many sales representatives will stop at nothing to get a listing; even if that means making very little money by slashing commissions from reasonable rates to a point where it seems impossible to make any money.

In the September 2008 issue, Consumer Reports took a close look at the commissions earned by Real Estate Agents.  They polled 3753 readers who sold or tried to sell a home, 4029 readers who bought a home and 7368 readers who did both.  The results were interesting.

You can find the complete results here:
http://www.consumerreports.org/cro/money/real-estate/real-estate/what-you-get/real-estate-what-you-get.htm

Consumer Reports found that "higher commission didn't always translate into more service or better results."  According to their findings, there are marginal differences between the value of an agent who charges less than 3% and one that charges over 6%.

The way to maintain your commission in the face of low rate agents is to offer your clients more.  It sounds simple, doesn't it?  Give them more and they'll pay you more.

Here are some ideas that I've come up with that can show current and potential clients that you're worth the extra money:

1) Don't use the same tired Real Estate websites that everyone else does.  Use the Internet to show your clients that you're different and that you'll use every tool (including the Internet) to sell their property.

2) Give each property you represent its own home on the Internet.  Preparing a unique page dedicated specifically to the property you're representing gives you an excellent way to convey the benefits of the property 24 hours a day, 7 days a week to an almost unlimited audience.  Unique property websites also give something tangible to your clients.  Real Estate sales is filled with things that can't be touched our seen, but a website is something that a lot of clients not only appreciate, but highly value.

Here's an example of what I'm talking about: http://www.85clairfields.com/

3) Go the extra mile for your property descriptions.  It's common place to write a small blurb of text and list "EXTRAS!!!".  However, by carefully considering the details of the property and writing about them online and in print, not only will you show that you've invested your time but you'll convey a rich description of the property rather then simply bloated sales text.

What do you do differently to seperate yourself from the pack and earn top commission?

Comments (11)

Caren Wallace
Premier Property Group LLC - Tualatin, OR
Portland Caren Real Estate

You have some great points! We must also show as many good pictures of the property as possible, the buyers want a "walk-thru" before they call!!

Sep 22, 2008 10:19 PM
Steve Homer
The HBH Group (Keller Williams affiliate) - Round Rock, TX

Rob:  Excellent points!  Some definate areas that all of us should be paying attention and focus to.  Thanks for posting this!

Sep 22, 2008 10:37 PM
Suzanne Champion
N.J. Realty - Westerville Ohio - Columbus, OH

I do lots more.  One thing is to use those "tired" websites but in a much better way than other agents - enhanced listing descriptions, more pictures, extra branding, special highlights that help the property stand out.  I put properties on a lot more websites, but the reason the "tired" ones are still there is that they're the biggest!  In any case, when it comes to websites...my sellers get quality AND quantity,

Sep 22, 2008 10:52 PM
Rob & Jeannie Steward - RealtorsĀ®
RE/MAX Advantage - Nashville, TN
We Work TWICE As Hard For You! - Ashton Group

This is where selling yourself is imperative in addition to selling your services. We go the extra mile. We give 110% consistently. We outspend the competition in listing marketing dollar for dollar. We get results.

Then there is the extremely HUGE liability which comes with the clerical aspect of contractual documentation. We live in a very litigious society. My experience and training doesn't come without hard work.

Here's a question to ask your next prospective lister who asks you to cut your commission. There are discount brokers out there, so why do you want my full service commitment in getting you the most money for your home in the least amount of time for less than others pay me? You get what you pay for. If you want something for nothing I'll gladly refer you to someone who will put a sign in your yard and enter you on the MLS. In this market, every single day which goes by translates to less money in your pocket in the long run.

Don't become offended or defensive when someone asks you to cut your commission. Prove your worth. And if you are worthy, it shouldn't be all that hard to do.

Sep 22, 2008 10:52 PM
Ron Tarvin
Residential, Investment properties, rehab projects, property management, luxury homes, new construction! - Katy, TX
Broker, Katy, Houston, Cypress 77450,77494,77095

marginal differences between the value of an agent who charges less than 3% and one that charges over 6%.

That statement boggles my mind...somehow there are agents who work for free that are still able to market a house?  LESS than 3%..is that without a co-broke? and if so, then it's a fairly common single side commission rate and the stat is very skewed

Sep 22, 2008 11:50 PM
Richard Mielke
RE/MAX Results - Gettysburg, PA
REALTOR, Gettysburg Pennsylvania Real Estate

The problem with unique property websites is they are only good if you can get buyers to go to the site in the first place.

Sep 23, 2008 12:11 AM
Stephen A. Cunningham
LandQwest Commercial - Fort Myers, FL
MAI, CCIM

Agree with Richard...how are the people finding the web site? What methods of SEO do you utilize?

Thx

Sep 23, 2008 12:18 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

I read the Consumer Reports article and it only showed that the larger companies are willing to a hit on the fee in order to get the listing. As far as services provided go three out of the five items are beyond an agent's control. In my opinion the report has no value and is not a true representation of the fees offered.

Sep 23, 2008 12:50 AM
Rob Brown
Agent Revenue - Peel, ON

Thanks to all for your replies.  Some more interesting ideas so far.

@Richard and Stephen:
In my mind, there are 2 sides to unique property websites. 

First, the tangible product that I described is something that a client can see you doing differently.  Clients are beginning to understand the value of marketing and the Internet is no exception.  If you can give them something as good as (or better) then FSBO websites have and combine that with all of the other great things true, professional Real Estate Agents do, the level of your commission quickly looses focus.

The other side that you guys have touched on is lead generation & internet traffic.  There are a variety of options & methods to do this, many of which can be found here on Active Rain.  However, that's a little beyond the scope of what I was thinking here and maybe worthy of another post.

@Rob & Jeannie Steward:
I really liked your reply to listers who are looking for a discounted commission.  Your statement combined with some of the tangible items I've started to talk about are defiantly in the right direction.  "Prove your worth" is an excellent way to quickly summarize what I'm thinking.

@Michael Setunsky:
Michael, I think that you're correct but that you might be taking those facts too litterally in context of my blog entry.  I used the findings of Consumer Reports as a springboard to start thinking about how to become a top-earning Real Estate Agent.  I don't know many Sales Reps or Brokers who want to be the "Discount King" and sincerely believe that the way to avoid practicing business in that way is to do a better job.

@Ron Tarvin's Katy Agent Team:
The marginal differences I mentioned were based on the differences in the numbers presented in the Consumer Reports survey.  There isn't a wide spread between the results of the two columsn.

Sep 23, 2008 02:01 AM
Richard Mielke
RE/MAX Results - Gettysburg, PA
REALTOR, Gettysburg Pennsylvania Real Estate

I market homes on the sites that consumers typically go to to find home-for-sale listings. Having a unique web site for each listing may impress a home seller, but what is going to make a buyer go to wwwdot123DrippyFaucetCourtdotcom?

Sep 23, 2008 05:40 AM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

 

This is a very tricky area.  No guarantees that the split between Listing and Buyer Broker will be 50/50 of the total commission.

 

Jul 14, 2010 07:57 AM