Pretty straightforward? Yes. With all of the hoopla recently from the 60 Minutes piece I felt the need to address this to my colleagues, friends and potential seller and buyers. I, personally, have 7 key reasons why I will not cut my commission and here they are:
- "They" don't have a marketing system that works. Today's real estate market is more competitive and complex than ever before. Some agents are willing to cut their commission because they don't have a marketing plan in place that works. They are desperate to accept any terms and conditions to list a property. Sellers need strength and conviction! They need a professional that is ready, willing and able to defend their asking price at the negotiating table. Would you really trust the sale of your home to an agent that is so quick to devalue their own worth? If they are that willing to give up their dollars how willing are they to give up your dollars?
- "They" will cut service somewhere. When a buyer is willing to pay asking price there are many factors that have come into play. Marketing materials, advertising, direct mail and more are all valuable tools that experienced, full-service agents employ to realize the best term, price and timing when selling a home. Which will the other agent leave out to accommodate their commission cut?
- "They" won't give it their all. A 1 percent reduction in commission equals more than 15% of the total commission. Would you be really excited about a 15% pay cut? Is the agent really motivated to sell the property? If the agent has 5 listings and one is a discounted commission and the others are a full commission which one is LEAST likely to be marketed effectively?
- "They" might not get cooperation from other agent. A cut commission on one end means there is less to split on the other end. Making your listing attractive for agents to sell and show requires collateral. Leverage, if you will.
- "They" likely won't get top price. If the agent is willing to let the seller negotiate him or her out of 15 percent or more of the income of the sale of the property will they also let the buyer negotiate 15 percent or more from the purchase price? The seller might be losing tens of thousands of dollars just to save a couple thousand dollars in commissions.
- "They" simply don't know better. Some agents might be willing to take less because they lack the experience to fully understand the repercussions that they are agreeing to - not only to their own bottom line but also the seller's. As an experienced agent, I know that when I do not compromise on my integrity, service, systems or skills then I can, in good faith, give clients my honest promise to do my absolute best.
- "They" don't understand timing. Regardless of the sellers walk of life or any conceivable market condition - one thing remains constant and unyeilding. Seller's want to walk away with the most money in their pocket. Yes, a commission cut seems like the quickest way to accomplish that goal but, more often than not, it is a false perception. Lower commissions mean lower marketability, which means more time on the market. That equates into additional mortgage payments, utility bills, landscaping maintenance and much more.
Having the right person with the right tools to tell the truth up front, set the best price, and promote the sale aggressively and effectively will result in the primary goal of putting the most money in your pocket.
ASK QUESTIONS! Be smart! Truly understand the marketing plan set out before you - it isn't just to list your home in MLS anymore or to send out a few postcards. Watch for my next post.........A list of nearly 200 items that your REALTOR® should be doing for you.....