3 Tips to Help Justify Your Commission to Clients

Research shows that 15 percent of sellers make decisions based on the agent’s commission rate, and another 5 percent to 10 percent are willing to pay full commission to get the best service.

However, most buyers (75 percent to 80 percent) must be shown that the agent is worth the full commission, and once they understand the benefits, are willing to pay it. When sellers tell agents they make too much commission, agents have not shown the value of their services.

Real estate practitioners would be wise to create a “premium marketing plan” that details 15 or more strategies employed to help the seller fetch the highest price in the shortest amount of time, and if sellers do not see the benefits of the plan, they should offer to refer them to an agent offering limited services.

When sellers say they do not have the money to cover the commission, agents should show them a list of expired listings, most of which have lower commissions, and explain that they pay commissions only when the home sells and it is a moot point if the home languishes on the market.

Finally, if sellers point out that another agent has a lower commission rate, agents should ask them how well could they negotiate on their behalf if they cannot negotiate a full commission for themselves, using a question to remain in control of the negotiation and to help sellers come to their own conclusion.

Source: “3 Ways to Justify Your Real Estate Commission,” Inman News (06/16/11)