I've got a hypothetical scenario for you:
Imagine a buyer walks in and says, "I want to buy this specific house. We've found it online and want to pay you directly. Convince me why your fee, whether it's 2%, 2.5%, 3%, or whatever you charge, is worth it. What value do you offer beyond finding the house?”
Remember, they've already found it. This is crucial for buyer representation. Let me share some ideas about this, drawn from my experience teaching the Accredited Buyer's Representation (ABR) class for NAR for a decade:
Let me guide you through building value. When working with buyers, start using this language: “You know, finding a house is surprisingly straightforward. My real work begins once we've found the house.”
It's crucial to show that the house hunt isn't the challenge; anyone can do that.
“But what I do is special. Here's what I do: First, I conduct thorough research on the house. I...
I have a really powerful way to have an honest conversation about commissions with a seller.
This is a great script from one of my top producers.
Here's what he says: "Hey, listen, here's my listing fee. My listing fee is [X, which could be 2.5%, 2%, 3%, or whatever number you choose.] I'm not trying to price-fix here. But what we really need to talk about is what we're going to pay the buyer's agent. We need to look at this as a marketing incentive to get buyer's agents to show the property.
To help you make a decision on what to offer the buyer's agent, I recommend doing a commission map survey. Put a pin on a map and look at every listing that sold within a certain radius, such as a mile, five miles, or half a mile. Of the listings that sold in the area in the last six months, you can see what commission they offered to the buyer's agent.
Based on that, you can decide where you want to be. You...
One conversation that can come up as you're out there taking listings is, of course, centered on commissions.
And here's a great script to help your sellers look at the commission, not just cost, but as a marketing incentive to encourage showings and to encourage more offers.
So the script kind of goes like this:
"Hey, Mr. And Mrs. Seller, one thing I wanna talk to you about is the commissions that we charge. Now, I charge a listing marketing fee of X [fill in the blank, whatever you're charging]. And all we have to decide now is what we're gonna pay the buyer's agent. Now there's a little secret sauce here that a lot of people don't understand. Which is, that marketing fee that we're paying to the buyer's agent to bring that buyer in can actually incentivize them to show your home.
"Let me show you an example:
"I did a commission survey in your market area where your home is. I went out about a mile two miles, and I looked at every listing that...
My friend and superstar REALTOR Adam McGrew recently shared a unique concept that he uses when talking commissions with sellers. He focuses his script around what the competition is offering and how the seller can be more competitive in the market.
His first step is to print a map of the area along with a list of properties that are currently for sale near the new listing. He then researches the compensation offered to buyers agents and highlights this information in his presentation. Next he asks the seller a simple question "So, you do want to be competitive, right?"
Not only do most sellers want to match the current compensation offered to buyers agents in the market, many want to incentivize buyers agents and encourage more showings by offering a higher compensation percentage.
Watch the video for more details...
What do you say when a seller asks you to discount your fee or worse the buyers agent fee when responding to an offer?
Your answer can set the stage for how the seller will approach all negotiations through out the sale. It can also impact how cooperating agents view your brand and future working relationship.
Watch this quick video for ideas on how to respond effectively and also how to respond when the seller complains that you sold the house so quickly they shouldn't pay you the full fee.
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About Jim Remley
Jim Remley is a nationally recognized expert in the field of residential real estate. Entering the real estate industry at the...
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