How to Answer "Is Your Commission Negotiable?" And Similar Nonsense

As featured in Inman News

Home Owner: Is your commission negotiable? Why should I hire you and not "Sally Sales-A-Lot"?

Translation: Show me your value! Are you really worth this fee?

It's like a merry-go-round.  But not the fun one that children enjoy.  It's that circular dance of your commission and hirability being questioned by prospective home sellers.  You think they are ready to  sign with you but then the attack starts, "I heard that my neighbor only paid ____ (fill in the blank with the last lowball number you've heard) to sell her house. Can you match that?"  "Sally Sales-A-Lot" said she would only charge me a low fee of ______. Will you lower your commission to that?"  Or, you may have been asked something different yet it all stems back to one word. Value.  For whatever reason, the potential home seller does not understand your value and, therefore, challenges your services and/or your commission.

It is at this moment that some agents get frustrated, even downright angry, and elect to pass on the listing or grudgingly compromise their commission.  Often such agents are also likely experiencing a roller coaster ride of unstable income.  But what else is an agent to do with such prospects, right? Wrong!

A foundational rule of dealing with people, whether in business or not is that you have to teach people how to treat you.  When we empathically remember that most prospective home sellers have likely worked with an agent to purchase that property, we understand that relationship shapes how they want to interact with you.  Perhaps the last agent was a pushover but that does not mean you have to be.

Furthermore, there are some real estate TV shows that have been edited to make the home selling process fit neatly into a 30-minute timeslot. Unfortunately, this sends a message to homeowners that there is not much that goes into selling a home.  We know that could not be further from the truth but it is unrealistic for us to expect sellers to understand this based on their past experiences and the media.  Thus, it is OUR responsibility to explain our value to EACH prospective home seller.

"But Dr. Lee I ALWAYS explain to people why they should hire me and why my commission is what it is but I constantly get challenged or lose the listing," you may be objecting.  If you are printing a basic CMA report (that every agent in your area can do too) and just verbally telling people, then I submit to you that is likely not enough to dissuade them of what they have seen and possibly experienced.  

Think about yourself.  What gets you to accept a new way of thinking?  For many of us, numbers are the game changer. 

In real estate, it is critical that we show people numbers but not just the numbers of what you think their homes should list.  The listing price is where many novice listing agents stop.  We must show people the numbers behind our value.  I call it T.A.P.  

The great thing about the T.A.P. method is it can be done by both new and experienced agents.  This method can help new agents gain confidence to compete in "Sally Sales-A-Lot"'s neighborhoods and help veteran agents get their passion for the job back.

It is time to quantify in WRITING your value.  Here's how to T.A.P. into your value:

1)  List EVERY task of the home selling process that you perform.  Most top-producing agents can get to a list of over 100 tasks that they perform for clients.   Aim to get close to 100, with more being better.  Make your list and check it twice.  

As a new agent, this will help you become more confident in your understanding of the services you provide. 

For some sellers, including FSBO sellers, this extensive list convinces them of your worth and ability.  But this is not all.

2)  Assign the time it takes to complete each task from start to finish.  Very few homeowners, including FSBOs, have the time or patience it takes to complete the tasks of a real estate transaction proficiently if they are juggling family time, work, and other life activities.  Seeing these numbers in writing gives potential home sellers a reality check.  If you just verbalize this, it does not have the same impact (especially if they are daydreaming, planning tonight's dinner, etc. as you talk).  

3)  Define the price/cost of each activity at market value, not with your discounts. You or your office have built irreplaceable relationships.  For example, if you need to contact your preferred attorney for a legal description, you will likely get that free. But, without those relationships, one would have to pay potentially several hundreds of dollars for each hour of an attorney’s billable hours. This is true for photography, videography, staging, inspections, and the whole gamut of the real estate process.  Your industry relationships (or those of your team or firm) pass various savings on to home sellers that, on their own, they may not ever see.  It's your job to explain and quantify this  -- show the numbers.

If you let people undervalue you, they will. We stop the mentality that real estate sales agents are overpaid door-openers by quantifying our value and not allowing client past experiences or edited TV shows to regulate. #LearnWithLee

The beauty of the T.A.P. method is that once you create your list for each letter, you have it for the rest of your career -- it's a "one and done" process.  I hope you can now see why agents that have used this thorough method of quantifying their value have no longer had their commission/value challenged.   

I encourage you to block off an hour this week and T.A.P. into your value.

Sound off - I would love to hear from you!  Give me a shout on Facebook, Instagram, YouTube, and Google+ or by visiting LearnWithLee.Realtor.  

Want in on my full Listing Leader class that has been updated for 2018? Message me for a local training for your team or be on the lookout for the on-demand class coming soon to my Vimeo channel (

Want more of the best practices of our nation's top producers? Grab your copy of the short read, Profit with Your Personality and, the classic, 5-star rated workbook, Plan to Win, to transform their real estate sales game plan.  

Here's to your success! #LearnWithLee
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