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Commission: Your bargaining chip?

Mastering the principles of influence, persuasion, leadership and commission negotiation will help you sell property – and your service

One of the most important negotiations you’ll face as an agent is the one where a client wants to negotiate commission. Along with price, it can be a highly sensitive topic. These skills and tips will help you to connect with, convince and ultimately win the cooperation of your clients.


Most of us are bombarded with about 35,000 messages a day. Everywhere we look or go someone is trying to get our attention, be it a billboard, a newspaper, Facebook, e-mail, a family member, colleague, client, the radio or TV. How do we choose which messages to tune out and which to tune into? How do you make sure your messages get across?

Effective communication, persuasiveness, leadership: the ability to convince is all about connecting. Your ability to do these things increases in direct proportion to your ability to connect, to identify with people and relate to them in a way that increases your influence. Consider how much improved your personal and professional relationships would be if you mastered the ability to connect. According to the Harvard Business Review, the number one criterion for advancement and promotion for professionals is the ability to communicate more effectively.


You will never win over others if you don’t treat them with respect and importance. To do that, you must sincerely, respectfully listen to their point of view first. People are more likely to listen to your point of view later if you build a relationship of trust, and see it from theirs first. Adopt the attitude that you can always learn from asking your clients questions. This will help you meet their needs in the best possible way and build a strong relationship with them. Request permission to ask questions (about what they want in an agent, their preferences in a property, why they are selling or buying). Explain the benefits: “If you have a couple of minutes, there are a few questions I would like to ask, questions to help me put together specific information for you and save you some valuable time.”

Adopt active listening strategies when your clients respond. Give them your full attention and don’t use the time when you are listening to formulate a response. Be patient and self-disciplined enough to resist interrupting, even if you don’t agree. Let them know you are paying attention by maintaining a position of active listening, paraphrasing and asking for corrections throughout. Use words such as:
“From your point of view …”
“So what you are saying is …”
“Do I understand correctly? You feel as though …”


Real negotiation begins long before an untrained person thinks it does. Always be proactive in creating more and better options. In that way, you will have so many alternatives that you can walk away from a deal if the terms are not reasonable.

Create this situation by constantly undertaking good, focused marketing – discovering your customer expectations (by asking) and exceeding them so that you build a large quantity of quality repeat and referred clients who are predisposed to respecting and trusting you.


That said:

• Make sure you are worth your fee
• Demonstrate it at every point
• Be capable of communicating it


The average person says no three to five times before settling for a deal. If your client raises objections at the final stage, acknowledge their objections by listening to them, then move on to getting the agreement signed. You can address their objections once it’s signed. As an example:

Agent “You appear to be satisfied so far. Shall we list the property?”

Client “No.”

Agent “No? What’s holding you back?”

Client “We’re not really comfortable with the fact that you won’t advertise our home every weekend.”

Agent [Repeat the objection] “So you’re concerned about the advertising policy? [Pause, then say …] “Well, if it weren’t for that, would you like to go ahead and list the home?”

Client “No.”

Agent “Really? Well, there must be something else that is bothering you. May I ask specifically what that is?”

Client “We don’t like the fact that you don’t do an open house every Sunday.”

Agent [Repeat the objection] “So it’s about open houses …” [Pause] “If I could make you feel better about that, would you want to move ahead with the listing agreement?”

Client “Yes.”


Many sellers may ask you to reduce your commission because they know that some agents do. A simple no may be enough. Do not assume that you have a confrontation on your hands and in so doing, create one.

One response may be “no … and sign right here”. Instead be creative and form sets of questions you can use to lead the client to the correct outcome:

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 myself, are you saying you would prefer that I have the listing?”

Client “Yes.”

Agent “Why is that?” [Let them tell you why you’re a better choice and then summarise what they have said.] “It sounds like you are more comfortable with my service, my marketing plan, my way of doing business. The real question here is what price tag do you put on your personal peace of mind?”


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?”

Client “Yes.”

Agent “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 you will 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 demonstrates her inability to do that very thing?”


Agent “Mr and Mrs Seller, if I reduced my commission by 1%, could you do something of equal value for me?”

Client “Which would be?”

Agent “Well, we have agreed on a R2m list price for your home and my professional fee is 6%. What you would like to do is cut my commission to 5%. I would do that for you if you did something of equal value for me: list your home for R1,660,000. What do you think?”

Client “What do you mean?”

Agent “I’m glad you asked. Most sellers think of 1% as very little to ask for. After all, it is only 1%. But that is not true unless it is 1% of 100%. When it is 1% out of 6% it is 17% of the gross fee. The equivalent of 17% of the gross list price is R340,000, which, when deducted from R2m is R1,660,000.”

Property-Professional-magazine-Commission_Ed-HatchEd Hatch is the president of Ed Hatch Seminars and a senior instructor for the Council of Residential Specialists in the US, UK, Europe, Africa and Asia. Based in the US, Hatch has addressed international audiences since 1990 on topics including negotiation, business and strategic planning, customer service and leadership.

Words Ed Hatch

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