This is the first post in the series – 3 Ways to Get Your Full Commission. Step 1 – Respond with Strength

When asked “Will you cut your commission?” Respond with Strength!

What is your first reaction when you hear that question from a seller? Anxiety, fear, resentment? All very normal. Anxiety may come from lacking a good response. Fear may result from believing that you must now cut your fee to get the listing. Resentment may be the result of taking the request as a personal affront to your value.

Perhaps the best response is to pause, take a breath and learn more about the request. Are the sellers just checking to see if you’ll cave in easily? Is it their natural response to ask, then proceed anyway? Might they really not see your value? Or have they decided that they must have a cut and will not list without it?

Often, agents feel they have only two extreme choices; decline the cut and lose the listing or make the cut and lose revenue. In some situations, they may be your only two options, and if so, you’re probably better off declining the business. Remember, you are making the choice to decline this low margin listing.

Couldn’t you cut only on this one who asked and charge the other clients full fee? Well you could, but that lacks integrity and fairness. How do you explain to the full-fee client that you discounted for others? How do you run a two-tiered, non-disclosed commission schedule? Well, the other clients won’t know. Ahh, but you’ll know, and that’s what really counts.

There are two ways to compete for business; value or price. If you compete on value, you actually must be better and have the ability to sell your additional value. To compete on price you may continually have to underbid the others who are playing the same game. Your profit margin will be smaller; you’ll need more units and have to work with difficult clients.

So let’s explore another option, getting your full fee AND the listing. Now that’s a challenge. But you must first accept the reality that some people know the price of everything and the value of nothing, and from those people you may not get the listing at your fee. You will have to let go. Base your commission philosophy on three principles; Strength, Value and Difference

FIND YOUR STRENGTH
Strength is your internal belief system, your self-esteem and the absolute commitment to only take listings at your full fee. It’s like deciding to travel with carry-on luggage only. When your roller bag is full, you’re done packing and leave on your trip. If you need more stuff, send it ahead or buy it there.

Here’s a test of strength. If a seller was ready to sign a listing agreement but at the last moment asked you not to divulge to a buyer the defective roof, would you take the listing with that condition? Absolutely not, you say. See, you have the strength to stand on principle and ethics. Now apply it to your fee structure as well.

Here’s an exercise that will develop this strength. Chose to decline a listing. On the next listing that the final condition is to cut your commission, say no. Politely, nicely pack up your papers and walk away. Say to the seller; “Thank you for your offer. I must respect your position not to pay our fee so I hope you will respect my position not to cut. If I cannot be your first agent I hope I can be your last. I wish you success in the sale of your home and please feel free to call me anytime. Thank you.”

As you drive away you might be thinking that you lost a good listing and wondering if the right thing, but this is the only way you will know how you feel about standing firm. By the way, if the seller does list at the full fee, you’ll have to wait and try this on another listing.

Coming soon! 3 Ways to Get Your Full Commission: Highlight Your Difference

David Knox will be speaking at the 2014 ERA IBC in Los Angeles March 24-27, 2014. Register here to see him live.

Photo By Stuart Miles, FreeDigitalPhotos.net