According to the 2003 studies done by the NAR, the average commission paid by a seller is now 5.1 percent. Consumers are being coached by many media to do hard-line negotiating when hiring an agent. What a full service agent knows that many consumers don't realize is that many of the discount firms do not offer full service, so it is not a commodity situation that can be compared apples to apples.
Weak agents often are not even convinced, themselves, that they provide value and services to justify higher commissions and so they can not credibly build a case for their fees.
Strong and successful agents, on the other hand, have developed strategies and techniques to demonstrate their value and to justify the fees for their level of service. Here are some of the strategies that work. While you won't use all of these strategies with every client, you have enough arrows in your quivers to be able to shoot down any spurious objection and impress the seller with your worth.
The top 10 strategies to protect your commissions:
Know who you are talking to.
Mirror the style and needs of the client. One way is by being aware of your dominant style and their dominant style. The DISC method of determining communication style can be used to identify what is going to "fit" with the prospect to whom you are presenting. Here is a very simplistic breakdown of these styles:
D=Extrovert/Things Person
I=Extrovert/People Person
S=Introvert/People Person
C=Introvert/Things Person
When you mirror the style of your prospect, you build rapport faster. There are differences in the average sales person's style and that of the average member of the general population as shown by these breakdowns:
General Population:
D=18
I=28
S=40
C=14
Sales People:
D=30
I=42
S=25
C=3
People with the same style as you will feel comfortable with you and you will be able to easily build relationship and trust. Differing styles will take adapting on your part to be successful. For instance, if you are an I, talking to a D, you will want to show bottom line results instead of smoozing!
Believe you are worth it! No stinkin' thinkin'!
What do you really believe about your worth? You must have the self-confidence to convince yourself first that you are worth every penny of what you are asking and know why. If you don't believe it, you will be weak in convincing the client. When they first ask the question about the flexibility of your commissions, start by just saying "no" or "that is not the way I do business." Jan Poscovsky of RE/MAX Heritage in Sugarland Texas says this often is all she needs to do and that's the last of the conversation on that topic.
Demonstrate the value.
Bring a list of the 100 activities you do during the listing. People will not question the price if they see the value. Practice your dialogue about how you are different and sprinkle it through the entire presentation. It could start with, "Mr. & Mrs. Seller, I am not like all the other agents out there, I do A, B, & C for my clients and this results in more traffic, a higher price and less hassles."
Get referred.
Trust is already established and fewer objections will surface if you are a known expert instead of an unknown commodity. Don't, however, get too cocky and sure of yourself with this group of people, because the media impact has been strong and many need to hear again WHY you are worth it! Don't take them for granted or you'll experience some heartbreak.
Talk about your negotiation skills.
This is a good tactic with a D client. "Would you agree with me that strong negotiation skills are an important skill for your agent to have to get the highest price for your home? Then why would you want to hire an agent who couldn't even negotiate a full commission on their own behalf?" Then shut up.
Ira Serkes, RE/MAX Executive in Berkeley, CA, says he also uses statistics on his value by comparing the average market days on market and list to sell price to his, which are both significantly better. Just bringing up these statistics sets you apart from the other agents, who, if asked, probably do not know their numbers in these areas.
Show your worth and differentiate yourself before the listing appointment.
Use a pre-list package that is delivered quickly after the first contact. Include the 10 Questions to Ask which would be created to highlight your skills, expertise and differentiation. The stats on Market Time and List to Sell Ratio would be good. If you have experience in the neighborhood or area, craft a question that would eliminate those that don't. Do a search on your MLS for agents with the same designations you have. With mine: Epro, PMN, LTG, GRI, RECS , there were only 2 other agents out of 4500 in my marketplace with those designations. Include, also, use of tools or technology that would set you apart.
Provide tools or marketing strategies others don't.
Whether it is a 1-800 response line (like ART), your Visual Tours or some other special marketing (like personally inviting all the neighbors to the open houses) point out the benefits of these tools. Show the 1-800 number and let them see it page/call you. Bring a list of buyers that have contacted your 1-800 line, showing you have buyers actively calling you!
Consider, also, offering a fee for service menu or different levels of service. If you do this, show them the choices and explain
the benefits/detriments of each. Most of the time they will choose full service if you've done a good job at explaining how that will net them more money.
Use technology.
For instance, third-level domains are free and can be used to set a pointer URL to the seller's page. A good example of this would be the way Dan Hazy, of Keller Williams Realty of Brandon has set up this one: http://bakerst.danhazy.com You can see from this address, he is branding himself as he promotes the listing. The perceived value is high. The cost is low (to non-existent).
Ira Serkes uses www.GoDaddy.com and purchases the street address as a domain name. See an example at www.1660Tacoma.com. Also a great idea! Again, the cost is under $10 and the WOW value is great.
A listing presentation on your laptop, is another way to make the point with the sellers and set you apart.
Just mentioning some technology that you use that others do not positions you in their minds as more high tech than the competition. These inexpensive ideas can have a lot of impact!
Work from the net proceeds.
The seller usually wants the most amount of money in the shortest time with the least hassle. By using the net, rather than the list price, you are clear and so are they at what they will pocket, if all goes well. Knowing your numbers for days on market and average list to sell is important here to make your point. Do some research in MLS on the companies that work on flat fees without full service to see how their averages compare. Many times you will be able to present a compelling case that your methods will net them more. The longer it is on the market, the more they are paying in mortgage payment, detracting from the bottom line.
Know when to walk away.
There are going to be people (20 percent, according to author Lawrence Steinmetz) who are shopping price and price alone. You need to determine if you even want your energy involved with these people. For most agents, I suggest you are better off walking away and letting them be high maintenance clients for the competition. If you fill up your time with these kind of clients, you have no time to attract the "good" ones. Just say no and go on!
When you believe you are worth it and have done a good job at being able to educate and demonstrate that to your prospects, you will find the commission objections subside.
Published: November 23, 2004
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Joeann Fossland GRI, LTG, MCC is a dynamic speaker and business coach. Creator of THE REAL ESTATE GAMETM, she provides coaching solutions enhance your effectiveness and life balance. You can subscribe to her free monthly newsletter, attend free monthly telephone seminars, and find out about classes delivered by email and personal coaching by visiting JoeAnn.com or e-mail her at .
Joeann Fossland GRI, LTG, MCC is a dynamic speaker and business coach. Creator of