What to Do When They Ask You to Cut Your Commission

May 14, 2018

Powerfact: Commissions are negotiable – they can always go UP.

At some point, every agent gets the question, “Will you lower your commission?” To handle this objection, I like to tell Power Agents to use the analogy of corporations who make “widgets”.

Watch the video below:

“Mr. and Mrs. Hunna Hunna… If a company is making widgets and they have to produce that widget and make a profit and decide they have to lower the cost of that widget — that money has to come from somewhere. It’s either A) have to cut back on the cost of making the widget (close factories, lay off people, use lesser quality materials), or B) they lower their profit margin.

In real estate, it’s the same thing. To produce the result of getting your home sold – here’s what my company has discovered: That it costs XX dollars to market a home in our area and get it sold. Keep in mind, I still need to make a profit. Now, if an agent is willing to cut their commission, just to get your listing, that money is coming from one of two places. A) the overhead to produce the results (public open houses, advertising, marketing materials, signage, etc. It won’t sound like they are cutting it, but maybe they advertise less or host less open houses. Or B) they will pay the same money to market but they will take it out of their profit. Now the profit for an agent is the money they use to pay their bills, feed their family, send their kids to school — can you see that? My concern here Mr. and Mrs. Hunna Hunna, is — if an agent is quick to take money away from their family off the table just to get your listing — how quickly will they be willing to give up your money just to put a quick deal together? Can you see why that’s a problem? So no, I can’t reduce my commission because my integrity to be my word and do my job is more important to me than one commission.”[bctt tweet=”Cutting commissions is an integrity issue. Agents willing to give away THEIR money will likely be quick to give away CLIENT money. #GetWhatYouPayFor ” username=”darrylspeaks”]

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