When a seller asks you to cut your commission, how do you give them what they want and keep your commission, too? Look at the seller's request in a new light, and you'll find you can make them happy without giving up a cent.

Let's start with what you can't do:

• You can't give in right away. While it may seem easier to just close the negotiation by knocking half a percentage off so you can go on to the next appointment, you can't really do that. You are in the seller's kitchen promising to get them the highest price and fastest sale possible for their home. If you fold that easily, you aren't much of a negotiator, so you might as well have a winning comeback prepared.

• You can't get indignant, huffy, or angry. That distances the seller even more than their request did. Don't react emotionally at all. It isn't personal; it's about the seller having certain notions or pressures. The commission may not have anything to do with the seller's real problem -- that he's upside down in the house and not able to close, or relying on the sale of the home to fund retirement. Look at a commission-cutting request as a way to find out more about the seller.

• You can't go on and on about your "professionalism and experience." The seller already knows you're a professional. What you do daily may be second-nature to you, but it's a mystery to your seller. Look at the seller's request as what it really is -- an opportunity for you to supply more information. If the seller fully understood what you are going to do to sell their home, they might not have even asked you if you'd cut your commission. This is your chance to enlighten them.

What you can do is some prevention, before the commission issue comes up:

• During your presentation, ask how long the seller has owned the home, and if they have refinanced. Are there any liens against the home and if so, how much are they? Will they be needing another home? What improvements have they made? Are they planning any improvements? The answers will tell you a little about the seller's financial position, intentions, timeline, and motivation. If it looks tight, do the math right then and there and show them what they are likely to get from the sale of their home. If it looks more like the seller is simply trying to cash out, shift the conversation to topics revolving around how to net a bigger sale (improvements, staging, marketing, etc.)

• Ask what the seller's expectations are -- do they believe the home will sell quickly? Have they looked at their competition? Are they familiar with recent changes in the local market? What do they see as challenges for selling the home? These questions establish the seller's sense of reality. As you converse, you may be able to allay the seller's fears about what they are spending on the commission, by reinforcing that you have solutions to helping the seller net higher gains.

If the commission question comes up anyway, explain your position this way -- "When clients ask for a reduced commission, it's usually for one of two reasons. Either they aren't sure how they are going to get their money's worth, or they believe they have something to offer in its place that will make it worthwhile for me to agree. So what I can do is explain to you what I do for the commission and how the commission is shared with others."

Naturally, the seller will be curious about what would make it worthwhile for you to cut your commission.

You reply, "The only thing that would make it worthwhile is the one thing I can't ethically do, and that's ask you to price your home below market value. Here's why. All agents dream of quick, painless transactions, but that's not what the business really is about. If your home were priced low, we both know it would sell very quickly. You'd pay less commission but you may actually lose money on the sale of the house. My commission is based on taking risks -- the challenges of getting you the highest price and best terms possible for your home. Either way is a bit of a gamble, but my commission pays me for taking that risk. With a lower price for your home, you're taking the risk. In other words, if it were worthwhile for me to lower my commission, I wouldn't be worth much as an agent, would I?"

If the discussion continues, lay out for the seller what they must do other than set a low price for the home. This may be the first time it dawns on the seller that they have a role in the home's successful closing, too.

Say, "Let's turn this around for a moment. Imagine that the more difficult your home is to sell, the more I charge you in commission. I'm going to ask you some questions, and for every 'No' answer, we'll add a 1/2 percent more to my commission: Is your home market-ready to my standards? Is it updated with every feature buyers want today? Are you up-to-date on all repairs and major appliance replacements? Will you make it easy to show by stowing your Rottweiler at the vet's? Do you have any terms that will make the home harder to sell or to close, like you need to wait for school to be out before you move? Do you expect unlimited advertising the longer the house stays on the market? Will you agree to lower the price to whatever I suggest so buyers will swarm it making offers?"

"You want me to work for the commission, and I want a house that will sell. As you can see, selling a home is a partnership where both of us have jobs to do. We need to trust each other to do those jobs, so that you will get to meet your goals."

Remember, for a negotiation to be successful, both sides have to get some or most of what they want. Let the seller save face by telling them that you admire them for asking -- it shows they are thinking about the bottom line, and that's what they are paying you to do, too.

Published: March 10, 2005

Use of this article without permission is a violation of federal copyright laws.