When Clients (Sellers or Buyers) Want You to Negotiate YOUR Fee to Seal THEIR Deal!

I’ve talked about agents caving in when clients suggest that the agent cut their fees so that the deal can go forward.

However, I continue to get asked by agents how to best address this issue.

Let’s start with your listing agreement. I can’t speak to all listing agreements, but I do believe that most have specific terms for the role of the broker/agent regarding payment of the real estate fee.

The language indicating the terms under which the seller is willing to pay you is:

“If you or anyone else finds a buyer who is ready, willing and able to by the listed property…”

“The listed property is sold.”

The language indicating the terms under which the buyer is willing to pay you is:

“You agree to show buyers properties that meet their needs, wants and price range and as a result they will pay you a fee based on the price agreed to between the buyer and the seller.”

In neither agreement does it state that if the buyer and seller cannot agree on the final sale price of the property the agent will contribute via a decrease in their original real estate fee.

If you’ve done the job that you were hired to do why would you agree to discount your fee?

The response to a seller should be:

Seller: “You agreed to pay me based on the price you accepted for your home. How long your home has been on the market, the number of showings and the number of offers. Now, let’s take a look at the quality of this buyer. The real question is, “Are you prepared to lose this buyer.”

Make sure that you take your listing agreement with the paragraph of what you agree to do for them and the conditions under which you will get paid, the marketing proposal for the listing, a list of the activity to the property and if there have been previous offers review the process and refresh why the deal didn’t consummate. Also, calculate the seller’s carrying costs over the period of the listing and note the possible additional time before another buyer shows up. At the end of the day your understanding would be that they are willing to pay more for carrying costs than consummate the deal and move on with their net equity.

The response to a buyer should be:

Buyer: “You agreed to pay me based on my finding a property that met your needs, wants and price range. We looked at “X” properties and you decided that this home was your home of choice. The sales to list price ratio for properties in this price range shows that buyers are paying “X” percent of the listing price. In addition, if you add “X” amount to your mortgage payment, over the next 15/30

years, that calculates to an additional “X” dollars added to your monthly mortgage payment. So let me make sure that I understand that you are willing to lose this home for “X” dollars to your mortgage payment.

The monthly number is so miniscule considering that they probably won’t live in the house for 15/30 years, but will benefit from the growth of their net equity, if they pay within market value.

Instead of being defensive, be the professional who knows how to intelligently and proactively respond to your seller’s and buyer’s question.

The above is a sampling of the “Why 6%!” workshop that I provide my clients! If you’d like to learn more about the workshop or are interested in coaching, please contact me at: suzanne@a-trackcoaching.com

Suzanne, welcomes your comments and opinions.

Whether a real estate agent or seller/buyer Suzanne will be happy to answer any of your real estate questions or concerns. Contact her at: suzanne@a-trackcoaching.com or leave a question below in the comments.

If you’re on Facebook please like A-Track Coaching! Suzanne would really appreciate it!

 

Key to Getting Top $$$$ for Your Sellers!

Even in a challenging market listings sell — it’s simple.  Here are some basic ideas for the 21st century real estate professional and their sellers:

Traditional marketing such as For Sale Signs, MLS listings and Direct Mailings still have some value.

However the goal is to implement a broad-based campaign to generate buyer competition for your listing. Let’s face it; your listings have to be marketable.

The most dynamic advertising won’t sell a listing that’s in Continue reading

Biggest Home-sellers Mistake #5 – Being Unwilling to Negotiate

 

Let’s address a major misnomer in real estate; not just by consumers, but also real estate agents!

Real estate agents DO NOT negotiate on your behalf. Unfortunately, you will hear a lot of real estate agents brag about their “negotiating” skills. So, let’s clear up the confusion.

Here is my definition of what I do as a real estate agent:

“As a real estate professional I provide buyers and sellers with factual information so that they can Continue reading

Biggest Home Seller Mistakes – #3

28% of Home Sellers

 “WON’T ADDRESS” Unpleasant Odors In Their Home*

*Source: Active Rain poll, www.activerain.com

 

Real Estate agents are challenged every day with having to address some of the following with sellers:

  • We know you have a cat or dog because we can smell them as soon as we step into your home!
  • We know someone smokes in your home because we can smell it as soon as you open the door (even if the person who smokes is not home)!
  • We know that you’re a great cook because we can smell the garlic, curry, onions, cabbage etc. that you used last night to make your dinner!

…and so can the buyers!

Lots of folks have allergies to PET dander, along with Continue reading

Home Seller’s Mistake #4 – 20% Won’t Make Repairs!

Really!

Remember how you prepared for a job interview.  Best suit, ironed shirt, new nylons, shined shoes, haircut, nails done, etc.  Why?  Obviously, you wanted to make the best impression so you’d get hired.  You essentially were a commodity.  You needed to make sure that the interviewer got the opportunity to see you at your best.  You were selling yourself!

Well, selling your home is like interviewing for that job.  You really have to think of it this way.

When you list your property to sell, Continue reading

Seller’s Mistake Number 2: If they can’t see it – they can’t buy it!

Really?

“Time is of the Essence” is not just a clever phrase.  In real estate, it is the action term that sellers need to understand threads through every aspect of the sale of their property from the signing of the listing agreement to the closing.  So; why is it that “34% of seller’s make it difficult for their realtor® to schedule showings or open houses?”

Hopefully I can help the situation.

Sellers, as soon as you sign your listing agreement your “home” is submitted into MLS and is available for buyers and realtors® to see.  Your “home” is no longer referred to as Continue reading

Professional Courtesy in the Real Estate Industry

Okay, have you ever had any of these experiences:

  • Have an offer to present and the listing agent doesn’t return my calls.
  • Faxed an offer over to the listing agent and I can’t get them to respond back.
  • Buyer agent had a showing on one of my listings and they don’t return my call asking for feedback.
  • …and the list goes on!

Agents frequently ask me how to overcome the above frustrations with co-broke agents and not only agents in other companies, but in their own offices.  Are you kidding!  On top of it agents aren’t paying attention Continue reading

“Another Agent Said They’d List Our House for More”

Here’s another entry for the Sellers out there.

If you ever hear yourself saying, “Another agent said they’d list our home at a higher price,” I want you to stop for a moment.  Let’s make sure you understand what you are saying.  Your selection of a listing agent is going to be based on the listing price they are willing to accept versus the best agent to get your home sold.

Hmmm.  Well, let me share something with you.  I recently asked a very large group of real estate agents why Continue reading

Why you should not become a For Sale By Owner

The greatest disservice that you, as a seller, can do to yourself in selling your home is to try to sell it as a For Sale By Owner (FSBO).

Here are just a few things to think about:

  • Everyone, including agents, knows that you interviewed a few agents to get their opinion as to what listing price you should consider when listing your home.
  • Everyone knows that you didn’t deduct the real estate fee (that amount you are trying to save by doing it yourself), which was included in all the agents’ pricing proposals, prior to you putting your property on the market.
  • In the event that an offer is received, FSBO sellers typically Continue reading