A couple of days ago Starbucks announced a new deal: coffee and breakfast for under $4. On the newscast I watched a company official state that the new breakfast deal is designed to stimulate sales and give consumers something affordable.

Starbucks gets the recession. In the real estate industry we have an ongoing discussion about compensation. Honestly, I don’t think the consumer is nearly as interested in how much we make as they are in their bottom line when they sell their home.

A couple of days ago Starbucks announced a new deal: coffee and breakfast for under $4. On the newscast I watched a company official state that the new breakfast deal is designed to stimulate sales and give consumers something affordable.

Starbucks gets the recession. In the real estate industry we have an ongoing discussion about compensation. Honestly, I don’t think the consumer is nearly as interested in how much we make as they are in their bottom line when they sell their home.

I don’t care how much my clients make either. It isn’t any of my business. We need to divorce compensation from commission. The two are closely related, but they are also two separate issues. Consumers care about the commission part, and we care about the compensation part.

As a consumer, I am more interested in how much I pay for breakfast than I am in what kind of a profit Starbucks makes. I go for the highest quality at the lowest price and for the most convenience. If I have to wait in line it doesn’t matter how low the price of the breakfast is — I won’t buy. I’ll either skip breakfast or go some place else.

We need to look at our services from the customers’ point of view and forget about the "I am worth ‘X’ percent." We are not worth anything more than consumers will pay us. It is their money, after all.

I am not worth as much this year as I was last year. The quality of my services has not changed. I still offer speed, experience and convenience, and I have even added some extra ingredients to help sell houses more quickly. …CONTINUED

The reason I am not worth as much as I was worth last year is because there are many in my market who provide an almost identical service, but there are fewer people in need of those services, and housing prices have dropped. Starbucks is competing with McDonald’s; McDonald’s is now selling gourmet coffee; and McDonald’s always had breakfasts for less than $4 dollars.

I got my last two listings by discounting my commission. I can almost hear the gasp as people read this. To me it is just business. Starbucks knows that there is a recession and expensive coffee-shop coffee is one of the first places people cut back, so they are offering more at a lower price to drum up business.

The company is not going around telling everyone that they are worth more and expecting to get it. Starbucks is not fighting to keep the price of coffee as high as it can. The company understands that it has competition and is giving consumers something a little different.

The listings I discounted are strategic, and lowering my rates was a business decision that I am not afraid to make. Neither seller has much equity, and both may end up bringing money to the closing.

I used to be associated with a company that required special permission to charge below a certain amount. We were always advised that we were worth "X" amount. Honestly, to some I am priceless, but that doesn’t mean they will give me all of their money or that they have any to give me. The agents who are with that company are the agents who I need to beat. If I beat them then I win.

When the economy and the housing market turn around I will still be in business. A few years ago I would not have considered reducing my commission to get a listing. Today, I will do whatever it takes to keep going, and so will some of my competitors.

Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.

***

What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

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