One of the most important negotiations you’ll face as an agent is the one about commission. Ed Hatch shares his top negotiating advice
Real negotiation begins long before an untrained person thinks it does. Always be proactive in creating options so that you can walk away from a deal if the terms are not reasonable. To do this, effective, focused marketing is important: ask your customers what their expectations are, then exceed them. That way, you can build up quality repeat and referred clients who are predisposed to respecting and trusting you.
Never consider reducing your commission
That said:
• Make sure you are worth your fee
• Demonstrate this at every point
• Be capable of communicating it
Sellers know that some agents do reduce their commission, so why wouldn’t they ask? A simple no may be enough, though. Do not assume you have a confrontation on your hands and in doing so create one.
Lead them to the correct outcome
While your gut response to requests to cut commission may be “no … and you sign right here”, be creative and form sets of questions you can use instead to redirect clients to the desired outcome.
Example 1
Client: Annie said she would list at the same price but cut her commission by 1%.
Agent: Just so I am clear, all things being equal between Annie and me, are you saying that you would prefer that I have the listing?
Client: Yes.
Agent: I’m curious, why is that? (Let them tell you why you are the better choice and then summarise what they have said.)
Agent: Mr and Mrs Seller, it sounds like you are more comfortable with my service, my marketing plan, my way of doing business. So, the real question here is, what price tag do you put on your personal peace of mind?
Example 2
Agent: I’m curious. If Annie said she would cut her commission by 1% she must have started by saying her services were worth more and asked for more, is that right? Do you think she believed her services were worth that higher figure when she asked for it?
Client: Yes.
Agent: How long did it take before she agreed to reduce it by 1%?
Client: About 10 minutes.
Agent: So, in 10 minutes she reduced her professional fee by 1%? Well, I could do that too. I wonder though, how will you feel when you realise you have hired an agent to protect the value of your property based on their ability to negotiate and then right in front of you she or he demonstrates their inability to do that very thing?
Ed Hatch is based in the United States and is president of Ed Hatch Seminars, Inc. He is also a senior instructor for the Council of Residential Specialists. Ed has been a keynote speaker and addressed more than 100 audiences each year since 1990 on topics including negotiation, business and strategic planning, customer service and leadership.
For more great Ed Harris strategies, look out for the September/October issue Property Professional.
