Real Estate Commissions Have Always Been Negotiable
Let's talk about commissions and how we present the topic to our clients. The internet and social media have been buzzing about all of the recent settlements. First, we knew it was coming, so let's lean into it. The media will sensationalize anything they can. It is our job to explain our value, services and market to our clients.
Here's my quick take on all of it—
Commissions have always been negotiable.
Transparency has always been important to good brokers.
Presenting your value-add is more important than ever.
Consumers should have options.
The media portrays the lack of affordability and the increase in home prices on a 6% real estate commission. That’s nonsense and we need to be confident in explaining this to our clients. The media is also saying that this change will make buying more affordable for buyers when, in fact, it adds another roadblock for them. Home values continue to increase because of supply and demand, governmental barriers and increased expenses on building, the cost of materials, rental restrictions in many cities, unfavorable city or state restrictions on landlords, larger populations and an increased desire to be a home owner.
If you’ve been around for a hot second, you’ve likely heard me say that disruption creates opportunity. I believe so strongly that this disruption will provide a tremendous opportunity for the agents who rise to the occasion.
Keep the below checklist in mind when discussing commissions with your clients so you are sure to cover all grounds.
Choices— It is about consumer choices. Have you presented the choices?
Negotiable— Commissions are negotiable, and it is our job to negotiate the terms that work for our clients. Have you communicated this?
Value-proposition— Do you know your stats? List to sale price ratio for sellers. Savings generated for buyers during negotiations. Have you clearly articulated what you bring to the table?
Discount broker stats— Analyze the data on these brokerages in your market so you can speak to this. What is their percentage of list to sales price? How many expired listings have they had in the last six months? You get what you pay for. Be armed with data rather than just opinions.
