This January marks Inman’s fifth annual Agent Appreciation Month, which culminates at Inman Connect New York in a celebration of agents at the end of January. Plus, we’re rolling out the coveted Inman Power Player Awards, as well as the New York Power Brokers and MLS Innovators awards.
As the industry reels from the Sitzer | Burnett verdict and all the subsequent copycat lawsuits, New York City agent, attorney, coach and yoga instructor Renee Fishman makes a powerful argument for why the current commission model is unfair to agents as well as sharing the tactics and strategies that have helped her regularly earn a 7 percent commission.
What business are you really in?
How would you answer this question? Would you say that you’re a real estate agent or that you’re in the real estate business?
Fishman had an entirely different realization when she was attending a Tony Robbins business mastery seminar over a decade ago. When Robbins asked, “What business are you in?” her response was, “I’m a coach for people in transition who need to move.”
At that time, Fishman had been working with a coaching client when she realized that what she does with her coaching clients is very similar to what she does with her real estate clients.
Specifically, she asks about their values, their needs and their big vision. In that process, she discovered that the question that mattered most was about her client’s big vision. This approach helps her to identify what gets in the way, especially when the apartment or co-op checks all the boxes that the buyer said they wanted, but they’re now backing off for some unknown reason.
When Fishman realized that what was getting in the way was not about the property, but about what else was happening in clients’ lives, she asked herself, “How can I serve them on a bigger level?”
The current commission model is unfair to agents
According to Fishman, the industry commission model as it currently exists is unfair to agents.
“There’s this expectation that we should give it away for free, that we should consult and answer all their questions. Most people don’t see the work that goes on. They think we owe them a comps report, but appraisers get paid for appraisal work and it’s just seen as something that we do and aren’t charging for that,” Fishman said.
“How many agents have spent hours putting together a day’s worth of showings for a client, only to have the client cancel at the last minute because ‘Something came up’? In other industries, if you cancel at the last minute, there’s a penalty for it,” she said.
Fishman went on to explain how, when one of her private yoga clients canceled the night before his session, he paid her in full. She said that he expected to have to write a check. But in real estate, there aren’t those built-in expectations. She believes real estate agents have a lot of areas where they’re not claiming their value.
The client who paid Fishman $1,800 for 3 hours of her time
Fishman successfully closed a transaction with a client. After it closed, she had the “obligatory consult” with him about whether he should rent it out or sell it. After this conversation went on two more times, she told him he would have to pay for her time.
The client then asked how much. She decided to put a price on it, much like she would do if he were a private coaching client. She told him “$1,800 for three calls.”
He agreed to pay it because he understood the value of her time and her expertise.
Commissions are negotiable
Back in 2007 when Fishman first started in the real estate business, she had a client who was renovating his co-op and signed an exclusive listing agreement. The property wasn’t ready to be marketed at the date the exclusive was supposed to begin, so they had to extend that date.
At that point, the sellers’ friends were telling them, “You’re crazy for paying 6 percent in this market.” That was at the beginning of the Great Recession, and Fishman explained that in a down market like that one, they should be paying 7 percent.
“That was a great thing to happen early on in my business because anytime someone has asked me [since then] if I was willing to negotiate the commission, my answer was, ‘I’m happy to negotiate the commission. I’ve had clients pay me 7 percent,'” she said.
How to discover what is driving the client to transaction
Fishman believes that it’s important for her clients to understand that she is there to help them. To do that, the agent must listen between the lines and dig under the surface to uncover what’s really driving the client’s actions.
“When someone is selling an apartment [or any other home], there’s this surface grief of letting go of a home that you’ve had for however many years. That’s true for anyone, but some people feel it more acutely,” she said.
“Part of that letting go is not just this apartment that’s been their home, but the life they envisioned for themselves when they bought it. That’s a level many people don’t realize, but it’s there. It can really stop a transaction in its tracks when someone is not ready to let go of that emotional piece under the surface. By holding that space for them, that’s the value my clients have told me that’s really worked so much for them.”
Fishman said she’s saved many deals because she understood what was really going on with the client and could bring them forward so that they were aware of it.
“I know about the grief of letting go from selling my own home. I know what it’s like to feel the nervousness of a first-time buyer because I was one. I know the doubts that I had as a single woman buying my own home and that no one would want to date me because they would think I’m too successful because I already own my home,” she said.
‘I don’t have listings’
While Fishman asks many of the typical questions you would expect such as “Why do you want to buy or sell?” or “Where are you going next?” she’s listening for how her clients are talking about their lives. Her clients are people she makes an effort to get to know. Because she focuses on them as people, she says, “I don’t have listings. I have clients who are selling their homes.”
Coping with naysayers who can sabotage your deal
One of the most important questions Fishman asks when she first starts working with a buyer is:
“Is there someone whose opinion they want to get before they buy, because it’s not only the parents. It could be their best friend, a boyfriend, a spouse,” she said.
When you’re bringing that person in at the last minute, they’re only going to see the best of the best because the buyer has ruled out everything else, which means that they’re going to have doubts, speculation and cynicism about what the buyers are getting for their money, she said.
“This is Manhattan, so studio apartments can be over half a million dollars without blinking an eye.”
One of the ways Fishman combats this issue is to inform her buyers that this is going to happen when she first starts working with them. When it does occur, it’s a great way to build trust because she predicted it could happen. That in turn reinforces her value and normalizes something that could have torpedoed the transaction.
How your listing photos can enhance or detract from client trust
Fishman loves talking to her clients about virtual staging, especially because of her legal background in false advertising law. Based on her experience, she explains to her sellers how virtually staging a vacant apartment can cause a disconnect with the buyer. This in turn can erode trust in both the agent and the seller.
“People are looking online, they see the photos, and then they walk into the home. When it’s vacant or doesn’t look anything like the staged photos, they’re met with an experience that’s different from what they expect. Even though it’s disclosed that the property was virtually staged, there’s a sense that you’re trying to pull a fast one,” she said.
“One of the reasons I figured this out was because people would walk into my sellers’ home and say, ‘It looks like the picture’ like it was such a surprise and delight. I also saw how much more open they were to conversation, whether they were with their agent or not.”
Consequently, here’s what she tells her clients who want to use virtual staging:
“Yes, we can do virtual staging, but it’s so much better to actually have furniture in the home. I want people to come in and sit down and be in it, not just walk through it. That’s what creates the emotional connection to the space that encourages people to write offers.”
Why it’s important to be ‘trauma-informed’
Based on her coaching background, Fishman argues that it’s important for agents to be “trauma-informed,” i.e., understand how the psychological effects of stress can negatively impact the transaction and hijack your client’s mental state and decision-making processes.
Fishman also explained that when agents say, “Buyers are liars, and sellers are yellers,” what’s really happening is that there’s usually some form of unexpressed trauma tied to the stress of moving or other outside events. It’s important for agents to recognize this and then help their clients gain clarity so they’re not making decisions they’re going to regret.
When it comes to being trauma-informed, it really goes to what this person is experiencing in their life right now. Has there been a death in the family? Is there grief? It’s important for agents to remember that and be attuned to it, she said.
A really ‘good deal’ is not about price
If you were to ask most agents or consumers about what a “good deal” in real estate means, most people would say that it’s getting a great price. Fishman has a different opinion.
“At the end of the day, I want my client to feel good about the whole process. If they feel they were forced to overpay, they’re going to feel resentful,” she said. “On the other hand, if they feel they had a really great experience and that I talked them out of three or four other apartments that weren’t right for them, they will be talking about the connection. Everyone wants the same thing — to be seen and heard and understood. That’s when the transaction is a great deal for them.”
The real estate industry needs to level up our services
Fishman’s final takeaway was that the commission model has been the dominant model for a long time. Part of this is agent education and helping the public understand the value agents add, she said.
“But it’s also up-leveling our service and thinking of real estate as a service industry, not just about sales, but holistically serving our clients. And if we can up-level our service, we can have more success in moving to a different business model, like a consultative model, where we can really charge for our value and not be taken advantage of or have to give away our work for free,” Fishman continued.
“Other industries work that way. I think real estate can also work that way. I also think for it to work that way, agents have to step up their game.”
Bernice Ross, president and CEO of BrokerageUP and RealEstateC
