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Protect Your Commission this way.

13 May

How to Protect Your Commission
Published on Friday, May 7, 2010, 12:24 PM Last Update: 2 day(s) ago by Joe Stumpf
Category: All Articles » Negotiating
How many times have you been asked to cut your commission or lower your fees?

Have you heard…

“I’ve talked to a couple of other agents, and they both offered to cut their commission.”

“I went online and found a lender with lower fees than yours.”

“So – will you cut your commission? Will you lower your fees?”

If you’ve been in the real estate or lending business for more than – say, a couple of weeks? Chances are you’ve been asked you to cut your commission or lower your fees. What’s interesting about that is, this same person who asked probably wouldn’t dream of asking their lawyer to lower their fee, or their dentist to discount the price of getting a filling, or call around asking doctors if they’re offering knock-downs on knee surgery.

They already know that lawyers, dentists and doctors set their fees and – end of conversation.

So what do you say when that prospective client asks you to cut your commission? One option is to say “NO!” loudly and clearly. They’ll get the message, but they probably won’t choose you to be their real estate or lender.

Here’s a better option: my Magic Words That Remove Resistance dialogues, a series of scripts I created to help agents and lenders overcome, handle or remove any objection or resistance people may throw at you.

This dialogue gives you the language to respond to the question, “Will you cut your commission?” Your ultimate answer is still “No,” but my Magic Words will help your client understand why your “No” is actually a big win for them.

For A Lender:

I know a lender who said they would lower their fees.

“That’s a little bit like saying that a doctor is offering you a cut rate on surgery because his business is slow. I imagine you, like me, would be suspicious, wouldn’t you? Maybe they’re offering to cut their pay because they might be in survival mode right now, and experience shows that may hurt your chances of getting your loan closed so you have the money when you need it. Based on what you told me about your goals and dreams, your next best step is to select a lender like me, who is skilled enough to protect his own money, because then I will be equally skilled at negotiating for your money.”

For A Realtor:

I know an agent who said they would cut their commission.

“That’s a little bit like saying that a doctor is offering you a cut rate on surgery because his business is slow. I imagine you, like me, would be suspicious, wouldn’t you? Maybe they’re offering to cut their pay because they might be in survival mode right now, and experience shows that may hurt your chances of selling your home. Based on what you told me about your goals and dreams, your next best step is to select an agent like me, who is skilled enough to protect his own money, because then I will be equally skilled at negotiating for your money.”

This dialogue is subtly saying, “Anyone who says they’ll cut their commission is desperate and the wrong person to look after your best interests.” Without, of course, ever saying it!

And truly? Do you want to work with a client who expects you to do all the work – for half the money?

Practice the dialogue, master these Magic Words – and never, never cut your commission again.

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1 Comment

Posted by on May 13, 2010 in Published Articles

 

One response to “Protect Your Commission this way.

  1. Teresa Collins

    May 21, 2010 at 11:13 am

    Thanks for the words on cut commissions. Amen!

     

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