It’s a common scenario. You contact, or are contacted by a potential seller. Maybe the seller was referred to you; maybe you met him at an open house, maybe she’s currently trying it For Sale by Owner. In any case, you’re having a conversation about the possibility of your listing the house and the seller informs you, point-blank, that he or she has a friend or acquaintance who will list the home at X% ... and that X% is significantly less than YOUR X%! The seller asks you what you charge, implying that if you don’t meet or beat the lower X%, you’re probably wasting your time showing up for an interview.

What should you do?

First, I always recommend that we be upfront about what we charge if asked. Deflecting the issue gives the seller the impression that we’re trying to sell him something, which does nothing to help build the rapport and trust needed for a successful real estate agent/seller relationship. So, if Mr. or Ms. Seller were to ask, "What do you charge to sell a home?" answer the question without hesitation. No hemming, hawing, or creative avoidance. Just get it out there on the table.

"My fee is X% to sell a home, which includes the buyer agent's fee of Y%"

If the seller responds with: "Well, I have a friend who will do it for X-minus-2%..." all you have to do is respond. "That's great; and that might be the best deal for you. But I'd still be happy to get together and talk about your situation, so you can be sure you're making the right decision. No pressure, I promise. And I'll respect whatever decision you make."

Reverse psychology ("that may be the best deal for you") works great here! And if the seller agrees to meet with you, that means he's probably open to paying your fee, if you can prove you're worth it.

So, should you address the issue of your competition's lower commission head-on?

No. You should not. Why?

Because, the only way to "address" it would be to criticize it. And that's not cool. Any overt attempt you make to come out on top in a battle of commissions is going to make you look bad.

First, you would be criticizing the seller's friend, which in all likelihood will not endear you to the seller, even if you happen to be right in your criticisms. Not only are you criticizing a friend of the seller; you’re also subtly criticizing the seller's own judgment! After all, the seller is considering hiring this friend, so if you try to argue him out of it, you’re basically telling the seller he's wrong, which most people don’t enjoy hearing!

Besides, you have no idea what level of service the seller's friend will provide. Maybe she'll cut her services, but maybe she won't. Unless you have full knowledge of the other agent's marketing plan, it’s bad practice putting it down.

So, what should you do if you want a shot at this listing? Well, it's pretty simple. Go into the listing appointment with the heart of a consultant. Ask a lot of questions and really listen to the answers. Show empathy for the seller's situation, and be able to provide solutions to any problems you uncover. Be intimately familiar with the seller's neighborhood and conversant about local market activity. Demonstrate an ability and willingness to help the seller get his home ready for market.

In short, do your best to win the seller to your side by being friendly, helpful, creative and knowledgeable.

What if after all this friendliness, helpfulness, creativity and demonstration of market knowledge, the seller chooses the friend anyway? Don’t fret. You can walk away with honor, knowing you gave it your best shot, and that you made a positive impression on one more human being on the planet! And you never know when that will come back to bless you!

Published: April 12, 2010

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Jennifer Allan-Hagedorn was a top producing real estate broker in Denver, Colorado before writing her first book in 2007. Since then, she has written several more books about the business of selling real estate including her flagship book: Sell with Soul: Creating an Extraordinary Career in Real Estate without Losing Your Friends, Your Principles or Your Self-Respect, the sequel, If You're Not Having Fun Selling Real Estate, You're Not Doing it Right and her latest, to be released in Spring 2011, Prospect with Soul for Real Estate Agents. Jennifer believes that the secret of success for real estate agents is not in aggressive marketing techniques or hard-core sales pitches, but rather in being competent in one's craft. Competence begets Confidence. And in today's world of increasingly suspicious and ad-weary consumers, having an air of self-assurance and enthusiasm will be far more effective than a slick sales campaign. Jennifer writes and speaks with this philosophy in mind. She preaches that salespeople should follow the Golden Rule in their day-to-day practice of business - treating clients and prospects respectfully, as the salesperson him or herself would like to be treated. Being competent, reliable and fair, and motivated by a true desire to earn a paycheck, not just show up at closing with hand outstretched. She is a regular contributor to several real estate newsletters and magazines, a member of the RE/MAX Hall of Fame and one of the industry's most popular bloggers. You can learn more about Jennifer's "soulful" philosophies at www.SellWithSoul.com. Subscribe Below to Enroll in the Daily Seduction Newsletter Mini-Clinic - Tips and Strategies to Generate Business and Referrals From Your Sphere of Influence! Your Full Name Your Email Address