Is Your Fee Negotiable? The answer to the next question is decisive.

“What;s your fee?” That’s the easy question to answer. “Have you ever charged less?” That’s the critical question home sellers must ask to know if the answer to the first question is sincered.

Real estate broker commissions are not all the same. Rates vary even among agents in the same firm. Even if the agent makes a convincing defense against a commission concession you can still negotiate a lower fee. Agents are confident in their answer to questions like “Is your fee negotiable?” It’s such a common question Google will give you about 127,000,000 connections about answering. It’s the next question that Google has no answer for. The truth is in the pause.

The topic of a recent company meeting at a local firm was the book Never Split the Difference. Negotiating is the skill the book aims at improving. Nothing of the strategy the author proposed came close to misrepresentation. Honesty. Trust. A sincere commitment to see the other person as deserving of your consideration are clearly part of the strategy presented. Here’s how well the book impressed this firm.

A dozen or so agents around the table, including the owners and leaders, were confident to the point of enthusiastic as they shared their prepared responses to the question, Is your fee negotiable? The quick quips were right out of 1970 sales training. “NO. Nope. Can’t do it. Company policy.” To a person, everyone knows there is no such company policy. Based on every agent’s past history any version of NO is not the truth. And yet the seasoned agents were proud of their answer and the unseasoned agents were impressed. I was not.

I asked this next question and their silence told me the answer I just heard was bullshit. The decisive question was simply, “Have you or your firm ever charged less?”

This conversation turned out to be a defining moment in my career. When deception is encouraged by the owners the culture is poisoned and the future is determined. Building something better is easier when the status quo can’t honestly answer a simple question about their fees. So I did.

There is no question, broker commission fees have not been reduced by the presence of the internet even though the buying habits and methods of consumers has changed substantially. Apparently the broker fee is immune to market pressures or the market pressures are to not pressures at all.

It’s not collusion that keeps fees as they are. I believe inflexible fees are the norm because real estate business owners are committed to doing today what worked in the past. Few leaders get to the top when most members want to be followers of leaders who are taking them right where they are and no where near their discomfort zone. The obvious choice in this environment is to be the change. As I see the world, it’s not important to be a leader. It is essential to see wrong and try to right it. Leadership is overrated. Look around. There are effective leaders behind every crime against humanity. The bigger challenge is to be a wise follower and a committed instrument of change.

I started looking at the broker fee problem from the point of view of the home owner. This is what I saw: The conversation about commission tends to be related to a percentage of the purchase price. It occurred to me that this focus on purchase price minimizes the problem and distracts attention from the real problem, which is, real estate fees are paid by the seller from their home equity, not from the purchase price. As a percentage of purchase price the cost is a single digit. As a percentage of the only real money in the transaction, the equity, this cost becomes a double digit problem. A typical American with $70,000 in home equity is probably going to pay 20, 30, 40, and even 50% of their equity in real estate commissions.

Go ahead, ask Essential Real Estate the questions you want to ask. “What’s your fee.” Answer. $499.00 at the time we sign the contract, plus one percent of the purchase price as our Success Fee at the time of closing. We suggest you offer at least another one percent to cooperating broker who procures the buyer. More than that is up to you. ”

Be sure to ask us the second question. Have you or your firm ever charged less? The answer is, Of course. Our clients set the fee they’re prepared to pay within the range of fees we’re offering.

When starting a business relationship on honesty and keeping more of your home equity in your hands is your thing call me. 608-332-8331.

.

Learning v Training

Congratulations to the nine Realtor learners. You’re in the top of your company because you did the work to learn. Keep growing.

How does one become a top real estate agent? Let me count the ways. One, two, three, Two Hundred and ninety eight million. In .71 seconds Google found 298,000,000 results pertaining to my question. In .47 seconds Google gave me 366,000,000 results for real estate training. Certainly there appears to be interest in. (1.86 million results for train me to be a top real estate agent.)

I just saw a social media post recognizing the top real estate agents in an established local firm. Of the 60 agents who achieved the recognition level nine began their careers since the Great Recession. They did it without training. They committed to learning, and did the work. Going from zero to multiple millions is the carrot real estate trainers dangle, and who wouldn’t want that? As long as it’s fast, and easy, there will always be a rush to pay the fee, to be trained to be a star. We won’t see 15% of them in the top performer list of their firms. Rather than a quick road to success, the training programs launch most of their customers on a short career.

That’s not the same for learners. Learners like the nine I mentioned are in a hurry to be effective. They are in a hurry to do things right. They want to learn. They don’t have an interest in being trained. What’s the difference? Training is remembering which boxes to check and which lines to fill in. Training is the passing along of memorized scripts. Learning is knowing how to interpret and explain contract terms. Learning is knowing why the contract has this or that provision and knowing implications of those provisions. Not just well enough to draft an Offer, but well enough to also explain the document in terms their client can comprehend.

Congratulations to you all. I remember you when you didn’t know anything. You learned well. Keep growing. Keep sharing what you learn. Enjoy your careers. You learned it.