This is a great one for both buyers, sellers and real estate agents to read!!!
Is a real estate commission just a slush fund to benefit clients? Some people think so.
There it sits, a whole lot of money, and everyone pretty much knows how much.
They know how badly you want to get the deal closed. They know this money only comes to you once the deal is closed. Can they resist asking demanding blackmailing negotiating for some of your money?
Sometimes, they can't.
But instead of negotiating with the client, how often do you negotiate with yourself when you are asked to CUT your commission?
What was going on in your mind the last time you cut your commission? Did you use one of these excuses to give some of your commission away?
- This is going to be a really easy deal that won't require very much of my time.
- This guy says he will be sending me his cousin Larry next month.
- I feel sorry for these folks, they have been through so much.
- This is a really impressive client to have so I need to make sure he goes with me.
- He says he'll go elsewhere if I refuse to cut my commission.
- The deal will fall apart if I don't kick in some commission to pay for ____________. (fill in the blank)
- I need this deal to impress the guy who referred him to me.
- They're family!
- I've already had a good month, this is just the icing
- It's easier to just not fight it and give in.
In all of the cases above, you are negotiating with YOURSELF, not your client.
You are probably not winning at these negotiations very often. In this market, where opportunities to make money are few and far between, do we adopt the attitude that SOME commission is better than the risk of losing all of the commission?
Do we operate from FEAR? Or from CONFIDENCE?
Is it just too easy for you, the commissioned salesperson, to give away money that you don't even yet have?
Or do we see these demands for what they really are in most cases: A sort of test administered by the client that quickly morphs into an irrational fear on our part?
When in this position, I like to remember this saying which I learned in the car business:
A LOUSY SALESPERSON CUTS THEIR COMMISSION.
Once you cut your commission the client automatically assumes you were OVERCHARGING him the first time.
If you devalue your service by cutting the commission, so will your client. You have lost some of their respect right along with some of your money.
And I remain convinced that a large percentage of people do not expect you to cut your commission.
Maybe they just want to know this: Are you a lousy salesperson? Or one who believes you are worth every penny of the commission?
Written by Janet Guilbault, Mortgage Banker/Broker based out of the San Francisco Bay Area
Jennifer Marks
