Why discount your fee and show your weaker negotiation skills?
Salescoach - With 25 years in the real estate industry, provides a range of specialist services to help you make more sales.
discount your fee and show your weaker negotiation skills?
lot is written about the level of fees that real estate
agents charge and indeed during the heated and competitive
market for listings late in 2003 we saw companies promoting
lower fees as their competitive edge. Various segments of
the market actively encourage our clients to ask for a fee
discount and there are always those organizations set up
to offer private sellers advice and various marketing options.
I guess we would all like to pay as little as we could but
at the end of the day it is not the fee that makes the biggest
difference to how much money a vendor finishes up with after
the sale. There are even companies that promote a lower
fee if they sell the property in a shorter time-frame. I
have a problem with that as those vendors may be encouraged
to accept an early offer from the salespersons existing
buyers before proper promotion and presentation of the property.
And in the volatile market of recent months I wonder how
often properties have been sold too quickly and so possibly
run the risk of achieving a less than maximum sale price
for the vendor?
As this is a position the average salesperson will often
find themselves in, it makes sense to have a credible and
honest strategy to cope with the challenge of avoiding discounting
Firstly we need to ask how much you value yourself and what
you do? The true professional and highly skilled salesperson
will always take the view that they are worth every cent
of the fee, but I guess the salespeople who are happy to
protect their own interests by selling to their existing
favourite buyer before letting their colleagues or network
know about the listing (Yes such people do still exist in
our profession), know that a discount is probably justified.
If you truly value your time and career and I would assume
you know your value and know that selling a property today
is not just about selling it. This business is less a transaction
business and more a marketing business than many people
The first justification for the fee is that you wont
just sell the property you will market it in the
correct markets with skill and then seek to identify the
best buyers the ones who will pay the most! And you
will make sure the vendor understands the process, including
the delay in showing of the property whilst we get the marketing
and the property ready, and get their approval for the final
choice of marketing material etc.
You will of course provide consultancy and advice on presenting
the property to remove as many reasons as possible that
a buyer might find for paying less.
You will not only position the marketing where you think
the buyers are, but you will look to market the major benefits
of the property with emotion and feel, taking care to structure
your marketing to tug at the emotions of the buyers in the
There are unfortunately some salespeople who are just interested
in the transaction and I guess they position themselves
with the discounters that exist in any profession or trade.
How would you like to be ill and needing a transplant of
some kind to stay alive. Imagine the service at the doctor
or hospital who undercuts the experts? Would you go to the
best hospital and pay say $50 000 or go to the clinic that
offers the same service for $25 000? What confidence would
you have in the success of the operation and your survival?
And now lets put the true test of your understanding
of value and a great deal: Someone comes up to you in the
pub and offers you something way below usual market value.
Do you trust them? I bet you consider carefully and reject
Perhaps you own a lovely vehicle? Where would you get it
serviced? At a garage that charges the full rate or at Flash
Harrys for half that rate?
Why would you do that? I suggest it has something to do
with quality, skill and reputation?
I guess the average vendor gets the average salesperson
and that is the problem. If only the salesperson believed
in what they did and its value, and the vendor understood
the cost of working with a weaker negotiator, it might be
less of a problem.
Firstly we need to acknowledge that the vendor simply wants
to save money. This is a fairly reasonable approach and
needs to be acknowledged.
I understand your concerns and sometimes I find other
vendors ask the same question. It is not my policy to do
so as I believe that if you have a weaker negotiator working
for you; it can cost you a lot more at sale time than you
will ever save in any amendment to the fee. You see if I
am not firm with the fee now you may want to consider how
firm I will be with the buyers at sale time. If I am firm
with you now imagine how tough I will be with the buyers
when it comes to negotiate on your behalf? Saving a couple
of thousand now can cost you a lot more later.
I guess in the last moments of the sale you will want to
be confident that I am a strong negotiator. Now, if I give
some of my fee away here would you be confident in leaving
me to negotiate your money?
And best of all, have success stories that clearly demonstrate
the success of campaigns you have conducted. Humanize those
vendors, who possibly had the same concerns as these new
vendors, and demonstrate the success of the result. The
best counter to a request for a fee discount is to show
how you have achieved results beyond expectations and that
the amount of discount sought, is small in comparison.
It is also fair to acknowledge that in some cases of large
amounts of repeat business from the same client, or on a
major project, a fee variance may well be acceptable, but
to run your business like any other discounter may simply
position you and your business at a level where it is always
expected and then we run the risk of being seen to cut the
corners, that will encourage.
With property values being what they are, our vendors deserve
better, and with the responsibility, time and risks involved
we deserve the full fee.