Most sellers see commission as a fee they must pay to get their home sold, and they strive to keep that fee as low as possible. Here’s how to defend your commission by showcasing your value from the get-go at the listing appointment.

Somewhere along the line, our society has transitioned from being service-based to commodity-based. With service no longer anticipated in most areas of our lives, we focus on securing commodities in its place. 

If we can reduce anything we want to a basic commodity, then regardless of what it is (an appliance, a phone or even a car), the natural progression focuses on getting it at the lowest possible price.

For example, we now call the service stations of yesteryear gas stations. Instead of going for service, we search for the station with the lowest fuel prices and pump our own gas.

Rather than going to one location for a full-service experience, including auto repairs, we have segmented repairs into basic components (commodities), such as oil changing stations, brake replacement companies and so on. Once again, we search for the company that will provide the commodity we want for the lowest possible price.

In a commodity-based world, sellers now search for real estate agents who will sell their house for the lowest possible commission. I frequently hear, during listing presentations, “You guys are all the same. You provide the same things as everyone else I’ve talked to — why should I choose you?”

In short, everything we do as agents to sell a home has become a commodity rather than a service. If sellers cannot discern the difference between us, they will naturally search for the lowest possible price.

Ironically, most agents counter this argument by insisting that their level of “service” is better than the others — all the while missing the fact that sellers don’t see the “services provided” as service at all. They are seeing the overall package provided by a listing agent as a commodity.

Although the standard “package of services” provided by any specific agent might vary from market to market across the country (property prep, staging, professional pictures, 3D tours, brochures, open houses, social media advertising and so on), at the end of the day, sellers still see the package as a commodity.

If this is true, if you wish to preserve your commission, the goal in a listing appointment is to demonstrate to the seller how you provide much more than a basic commodity. Here are our three recommendations:

1. Start with your value proposition 


A value proposition is a concise statement that: 

  1. Clearly defines the differences between you and everyone else
  2. Definitively states why they should do business with you

Many agents have a value proposition that states they provide the best service. The fundamental problem with “service” is it is largely intangible. Although a commodity is concrete — you can see it, touch it, measure it — service is difficult to measure. You know excellent service when you receive it, but how is it qualified or quantified?

Rather than focus on service, identify the typical pain points in transactions in your market, and state how you can uniquely alleviate the stress

For example, have you ever tried waving down a New York City cab, only to feel frustrated while trying to communicate where you want to go and annoyed when the cab driver only takes cash?

Then Uber’s value proposition makes total sense: “Tap the app, get a ride. Uber is the smartest way to get around.” 

Uber further clarifies how it diminishes typical taxi pain points, “One tap and a car comes directly to you. Your driver knows exactly where to go. And payment is completely cashless.” Regardless of how you view Uber, its value proposition is brilliant.

2. Follow up with stories

Everyone loves a great story. It is one reason online reviews are so valuable — they are past clients explaining, in short stories, why working with you was so awesome. That alone is the No. 1 reason you should be actively working to build as large a review base as possible. The larger the number of positive reviews you have, the greater the pool of stories available to tout your value proposition.

When a seller asks me why they shouldn’t just go with a discount broker, one of the stories I share is about a vacant listing targeted by our local homeless population. The seller, an elderly lady, had already relocated to a distant retirement home and could not be a meaningful part of the solution. Also, we were upgrading her functionally obsolescent house so it would sell for top dollar. If we were going to put the home on the market, we would have to resolve the issues.

Directly behind the property was a right-of-way that housed a homeless encampment whose occupants kept breaking in, stealing our improvements (including 20 existing solar panels), knocking holes in walls and so on. Our team developed a comprehensive strategy that included: 

  • Working with the local police to have the encampment removed
  • Repeatedly repairing holes made in the back fence
  • Installing an alarm system
  • Moving a temporary occupant into the home
  • Negotiating an insurance payout to recoup damages
  • Overseeing cancellation of the solar lease because the roof-top equipment was stolen 
  • Fronting the funds to facilitate our plan and to pay for the upgrades

It was not an easy process, but we prevailed. The first evening we had our temporary occupant in place, a local community member climbed the back fence and headed toward the house.

He beat a hasty retreat when he discovered our occupant standing on the back porch with a wooden sporting implement in his hands.

We finished the upgrades, professionally staged it at our expense, took a full range of pictures, including drone footage and a Matterport 3D tour — and sold it within a week for substantially over asking price, setting a new high for the neighborhood.

After completing my story, I ask the seller a simple question: “Do you know of any discount agent who would do what we did?” Then I stop talking, sit still and look at the sellers until they respond. 

3. Finish with distinctions that set you apart

With everyone purportedly providing the same service level, and with consumers seeing that service as a commodity, there must be something else separating you from the pack. In my case, I leverage experience.

Most sellers see commissions as the penalty they must pay to get their home sold, and therefore, they strive to keep that penalty as low as possible. 

In contrast, we help sellers understand that the commission is the investment they make in securing the most experienced team in the region. With that experience comes access to an entire bench of professionals, including our in-house Transformations Team, Staging Crew, Listing Team and more. Additionally, we have more experience negotiating than almost anyone else in the region because of our volume.

I ask sellers a simple question: “If you are going to have Lasik surgery, are you more interested in getting a rock-bottom price from someone offering discounts to get business, or do you want someone with extensive experience? Would you be willing to trust your eyes to someone with limited experience, or do you really want someone with extensive proven results?” 

In most cases, sellers tell me they want the experience. At that point, I ask them, “If that is true, are you willing to trust your largest financial transaction to an agent with less experience?”

Although not everyone can use their experience to distinguish, newbies can claim their office’s or mentor’s overall experience. In reality, every agent has their own unique superpower they can leverage — some careful strategic thinking can help you identify your distinctions.

In our new commodity-based world, the choice is simple: Remain a commodity and face continued downward pressure on your commissions, or learn to effectively separate yourself from the rest of the pack by developing and sharing an engaging value proposition, telling stories that demonstrate your value, and effectively communicating your superpower.

Carl Medford is the CEO of The Medford Team.

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