The days of ‘lowering your commission’ no longer apply to you because you no longer have to cut your commission!
Let me explain.
Before my exhilarating days of being a real estate paralegal I was a full time Realtor and when it came to listing property, my belief had always been that the properties priced right always sold faster. I would imagine most of you feel the same way…especially in today’s market.
The challenge is convincing the seller to price it right. “But, if I price it right, the buyer’s still gonna lowball me and I’ll have no room to negotiate.”
That’s simply not true. To explain my point I tell them to price their $350k home at a dollar. “I’ll bet if you price it at a dollar, no one will offer you fifty cents.”
Then I proceed to increase the suggested listing price in small increments…$100…$1,000…$100,000 and so on. “I’ll bet if you price your home at $250,000 not only will you get full price but you’ll get multiple offers for much more than your asking price.” At the end of my explanation, I tell them that buyers will pay full price all day long provided they perceive value at that price…and it’s my job to convince that buyer.
Why am I telling you this? It’s because sellers feel the same way about paying your fee. If they perceive value at your fee then they will pay it.
From what I remember between about 15-20% of homeowners will choose an agent strictly by the commission rate. That means up to 80% will pay a higher commission based on the value they perceive from the agent.
Let’s face it, on every listing appointment you go on (YES, every one!) you can expect the sellers to some how, some way, ask you to reduce your commission.
Plan on it. Expect it…
…and be prepared for it!
I was prepared and I was hardly ever asked to lower my commission a second time.
I simply built my entire listing presentation around the ‘will you cut your commission’ objection even though they had not even asked the question…yet.
For example, while going over comps, you could strategically throw in something about how your listings get 98% of the list price (If you don’t know the ‘percentage comparison’ objection handling technique let me know). “Oh, wow. Look at this property. It looks like they were asking $350,000 and they only got $313,000. That’s only 89% of their asking price, much less then my 98.5%.”
Then leave it alone. Don’t bring it up again. Continue with your listing presentation until you have an opportunity to logically bring up another objection handling technique. Maybe next you can strategically share a real life story about how you received full price from a previous listing…knowing you’ll refer back to this story when they ask The Question.
By the time you’re done with your presentation you’ve planted in the minds of the sellers several commission objection-handling techniques. When the sellers ask you can simply bring up the objection techniques you’ve already talked about.
“Remember when we were going over the comps and I mentioned I get, on average, 98.5%…or that house I talked about that received full price? They didn’t receive less service or value and I definitely do not want to do that for you.”
I’ve even said stuff like, “There are times where you want to shop at Wal-Mart and there are times you want to shop at Macy’s. In my experience, when it comes selling your home, stay away from Wal-Mart. Let me go to work for you.”
There are dozens of objection handling techniques on the Internet. Study them and pick 4-5 that you feel comfortable using and incorporate them into your listing presentation.
Finally, before your next listing presentation make yourself a 25 point marketing program (or whatever) and get testimonials from past clients specifically mentioning your value as a Realtor.
With your objection handling techniques built into the listing presentation, your 25 point marketing program and testimonials from other home sellers, the days of reducing your listing commission are over because, as you know, sellers will pay your commission because they perceive your value.