Discounting can affect real estate brand
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By Inman News, Wednesday, September 10, 2008.For as long as people have been selling things, they have been discounting them. Real estate is by no means immune to this practice. Agents and brokers often offer discounts, either temporarily or permanently, for all kinds of services. Rob Hahn explores what effects discounting can have on both your business and your brand.
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Submitted by Marlow Harris on September 10, 2008 - 1:25pm.
If you discount your regular fee and hope that you can make it up in volume, you're just making more work for yourself and not doing as good a job for your clients because you're so darn busy.
Better to have 10 listings at 3% than 30 listings at 1%.
Submitted by Gail Bucker on September 10, 2008 - 3:46pm.
If there was ever a time we should not be discounting our commissions...it is now. The market is tough and listings are a dime a dozen. The buyers are GOLD! If we manage to find the buyer or work with other agents to bring the buyer why on earth should we discount our commissions???
When I was making a listing presentation recently the client was shocked at how much he had paid in 2005 and how low he would have to price it today in order to be competitive in the market with other recent comps. He asked me if I would discount my commissions because after the sale he would be "losing money." Now, his idea of losing money is that he wouldn't recoup all his investment but he still wouldn't pay out money at closing. I said, "Why should I discount my commissions? I did not assist you with this purchase. You were the one who prognosticated that this would be a profitable investment. I was not responsible for that. In fact, with as much as it takes in internet and newspaper advertising and organizing showings and working with other agents, perhaps we should raise the commission to 7 percent. This is typically what agents charge for difficult to sell properties." He was glad to sign for the 6 percent now that he looked at it this way.
The commercial real estate industry has typically charged 10% commission. No one has ever told the commercial real estate industry that they need to discount their commissions. Just because it's not commercial real estate why should we take less than our average 6 percent commission? Especially now that the market is so slow and it takes to much to move them?
When it comes to selling homes...agents...they need us more than ever...so be FIRM on your commmissions.
Another reason you should be firm on your 6 percent is because the buyer may ask for cosmetic items on the home inspection or pop up with a request for closing cost assistance. If you have already discounted up front it leaves you no where to go to make the sale work. Save your thunder because you may need it!
Gail Bucker
Associate Broker
Sandbridge Realty
Virginia Beach, Virginia 23456
www.thebeachpros.com
757-469-8746
Submitted by Tony Lewis on September 18, 2008 - 1:33pm.
There will always be a choice of fees in a free society. In Hair, you have the Barber's College with Autos you have Back Alley Garages with Shopping you have Club Stores. As a professional Realtor we choose the clientele we choose to work with. I personally want to work with clients that want to be represented by a professional that earns his wages by working hard and is knowledgeable, well educated and understands the meaning of a Fiduciary! I am proud to be a true professional and leave the discounting to those that are too lazy to earn business on the merit of their skills!