Culture Scan

At the intersection of real estate, media, and pop culture.

How to Answer the Commission Question

Are you worth the commission you charge for representation?

Some home buyers and sellers believe they need to negotiate your commission in the same way that they will negotiate the price of their next home. Part of your job as a real estate professional is to master the right language to handle commission objections. It’s not just about making the money you earn, but also protecting your self-esteem and sense of worth as well.

The problem is that savvy home owners and buyers are constantly being bombarded with real estate tools on the web. They can easily find home value calculators, download contracts, and arrange for financing online. So why should they pay your commission?

If you’re looking for a better answer to that question, you should pick up Mark Hunter’s book, High Profit Selling: Win the Sale Without Compromising on Price (AMACOM, 2012). In it, he teaches sales professionals how to handle commission objections and build understanding of their contribution to the value of the transaction. Potential clients likely don’t understand how you as a real estate professional can save them thousands by recommending the best services, guiding the valuation process, meeting the closing date, eliminating title problems, and more.

Most home buyers and sellers don’t understand all of the tasks that a full-service real estate professional accomplishes on their behalf. Hunter suggests making a list of all of the things you do that are important to the customer, totaling up the value for completing or not completing the task, and then showing it to the customer if they try to negotiate the commission. Also, add up how much time it takes to perform each task and ask the customer if they are willing to give up ___ days/weeks of their year to buy or sell their house on their own.

In the end, every time you cut your commission you are throwing away profit. That profit could be used to reinvest into your business and/or bolster your children’s college savings fund. Every time you accept less, you say to yourself you aren’t worth the money. This will eventually cripple your belief system.

So the next time a buyer or a seller tries to negotiate your commission, what will you say? Really you only have two choices. You can demonstrate the value of what you can do for your client, or you can sacrifice your future and self-esteem by accepting less than you deserve.

Commission Articles by REALTOR® Magazine


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