Everyone knows you get what you pay for – your commission rate for your listing is no different. If you’ve thought about using this tactic to attract more sellers and sellers agents, think again. You may be hurting your prospects for larger commissions as well as your opportunities to attract more buyers.
Your Value as a Seller’s Agent
As a real estate professional, realize first and foremost your value as an expert in your industry. What should you consider as part of that value? You have the education, knowledge and expertise to sell properties, so your price should reflect that. The more credentials, experience and success you’ve earned, the higher your fee should be. It’s also important to understand the costs you incur to provide stellar marketing and advertising to push those listings out. You want to reach as many prospects and agents as possible, so you don’t want to limit your reach and tools simply because the cost to use them will dig in to your commission. Finally, time costs money, right? The research to help cull as many quality buyers takes time and effort, so factor that into your rate calculation. Even with a good CRM in place, a strong list or a solid resource of potential buyers at your fingertips, you can always find new and creative ways to expand your buyer base.
Negotiating Commissions with Your Clients
So now that you’ve firmly established your value, communicate that to the client. Many of you have probably run into a situation where the seller is not convinced that your fees are worth paying. As you negotiate, have an objection list prepared in your mind and your answers to meet those objections. Let them know what you will provide to them and what they can expect from you from beginning to end. Mention your track record or share testimonials with them from satisfied clients. Be clear and educate them about the costs associated with marketing and advertising their home and how effective your plan is.
Don’t Forget the Buyer’s Agent!
The buyer’s agent is the one the buyer trusts the most and will listen to at every step, so consider his or her stake in the game. By reducing your commission, they might feel less compelled to share your listing with their clients, especially if they have a list of other similar homes in the area whose selling agents require a higher rate of commission. In these cases, you will be doing the buyer a favor in the long run, too, as they won’t be missing out on your great listing because of an economic technicality.
In the end, sticking to a rate that makes sense for you and that will maximize your income will only help you long-term. The key is to create value and to consider the incentives, objections and goals of your clients. And it can only help you feel more confident about what you have to offer and to keep your services, not your fees, competitive.
What do you think? Did lowering your commission rate help you seal more listings or did keeping steadfast to your fee help your business more? Leave your comments below and let us know!