So you worked hard and converted that lead you got from your real estate landing page and finally got that all-important listing appointment. You prepared with your stellar marketing presentation. You arrived early, toured the house, and explained your services. You hand the sellers your pen to sign the listing agreement, and they pause… Oh no, what now?!
In this series, we’ve discussed various seller objections and how to overcome them. Today’s topic tackles that least-favorite question from sellers at a listing appointment (drum roll please): “Would you lower your commission rate?” That’s right, the dreaded real estate commission objection!
Before we give any techniques on how to overcome the commission objection, we would advise you to always check with your broker first. They may have in-house client policies and pricing that you should follow. Most brokerages, however, allow you to set your own own commission rates with sellers, within their guidelines, of course.
Here are our tried-and-true techniques for overcoming the dreaded commission objection. Let’s walk through it together.
First: Show gratitude. Always thank them for considering your services. They are obviously interested in hiring you, and you appreciate their time in meeting with you. For example, “Thank you for asking about my commission Mr. Seller. I’m so glad that you value my services and you invited me to list your house for sale. It’s a big task and I am honored to assist you with it.”
Second: Compliment them. Instead of being upset they are asking for a commission discount, point out how their skill is a commonality. For example, “I can see you are also a great negotiator, that’s what I like about you. We are going to enjoy working together, aren’t we.”
At this point, if they don’t respond, you can simply drop the topic and move along with your presentation. “Sign right here so you can begin experiencing our excellent service.” But if they persist, keep going on to step 3.
Third: Ask for more information to find out what the specific commission objection is. Find out what they want, and most importantly, why. Guide the conversation gently to get to the bottom of their concerns. For example, “When you say ‘lower commission’, what type of reduction are you asking for?”
Fourth: Address their reasoning. If their request is because they think you make money hand-over-fist, be prepared to educate them how you pay the other brokerage, your broker split, Uncle Sam, your marketing expenses, office overhead (including MLS and Realtor® dues), and you get to keep the small slice of pie that’s left to feed your family. Some people simply are not familiar with how self-employment works, so you can educate them tactfully. One successful listing agent humorously says, “Before I pay anyone, I have to pay Uncle Sam. If you can make that expense disappear, I’ll work for free.” Then, everyone laughs because we all know we cannot avoid paying our IRS taxes.
If their commission objection is because they are comparing your service to bargain discount partial-service companies, you’ll have to point out how your services are superior. Review your marketing plan of the many things you will do for them, that other brokerages may not do. Then you can compare your services to an affluent, upscale department store that they can relate to. For example, “When you shop at Neiman-Marcus, you can relax because everything is done for you, and first class too, right? They can’t offer all of those wonderful luxurious services for Wal-Mart prices.” That will infuse a bit of humor too.
If they are asking to pay a lower commission because they have very little equity to spare, or are on the verge of a short sale, that may require some creative solutions. Address their concerns with authentic, sincere resolutions.
Then again, next time they ask that dreaded commission objection, there’s always the simple style approach revered by seasoned agents: “No. Any other questions?”