We’re concluding this week’s series on how to respond when you get the dreaded “We need to think about it” comment. Be sure to check back on the previous four days if you haven’t yet read them all so it can put this last portion into full perspective.
We’re re-stating the last main point from yesterday’s blog to provide a better frame of reference for you. Here we go —
4. Your Promise to Increase the Net: You now have the sellers on the same page, because they will give you the listing if the net is increased by the $5,000 we previously discussed. You can then say, “Well, I hope that you have felt that my presentation has exceeded your expectations. I would like to exceed your expectations one more time. I would like to show you a number of ways in which I can increase your net by the amount we have discussed.” You will need to have a number of ways to increase their net, none of which includes a commission reduction.
E. Our Low Litigation Rate: “The litigation rate of a real estate transaction as reported by the National Association of REALTORS® (or your real estate board) is X% of 1,000 transactions. The litigation rate at our office (or yours personally) is .X% of 1,000 transactions. As you can see, because of our training, systems, and checklists, our litigation rate is substantially below the normal. What this means to you is litigation during or after a transaction is the most costly aspect to a seller. Because of our systems, we have virtually eliminated that risk. Can you see where that would more than make up for the commission reduction you have asked for?”
Only use this if you can obtain litigation rates from your area or the National Association of REALTORS® since they change yearly. Also, make sure your litigation rates are clearly lower!
F. Business Checklists: Pull out a copy of your checklists or your own edition of Stellar Checklists (another system we publish) and show them the systems that are in play before, during, and after the listing is taken. Express that you are concerned about customer service consistency, and also you want to make certain that every detail is addressed ensuring that the items you have talked about actually do happen on a consistent basis.
G. Team Concept #2: Explain that because you use your team members almost exclusively and you need to negotiate a lower price, they are more than willing to maintain a good business relationship. Sometimes your affiliates are willing to negotiate their prices to make a better net and get you the listing. Since you cannot control this aspect of the business, it is difficult to guarantee, but it has happened in the past.
H. Add Your Own Method of How You Increased a Seller’s Net in the Past
As you can see, we can now go for the final close, which is simply, “I hope that you can appreciate that I have presented more than one way to increase your net to compensate you regarding your request for a lower commission. May I have the honor of representing your home?”
You have now made a great listing presentation and offered numerous ways to mitigate the request for a lower commission. Occasionally, on a listing that you really want, it could just be owned by a cement-headed seller. They might say that they want all of the above – a great listing presentation, you, and the net-increasing ideas – but they are still not willing to pay your full commission.
You will need to do some soul-searching as to whether or not you want this listing. I have some coaching clients who would have already walked away! I believe that because you have already paid the money to produce the lead, to counsel them on the phone, to prepare the presentation, and to personally meet with them — the cost is greater than just not obtaining the listing. Rather than getting upset and vowing you will never discount your commissions, try to see if you can get the listing and give up the bare minimum. This concept is referred to as “Give to Get.”
Giving to get means there might be some compromises, prior to giving up your commission or the listing. For example, the seller has agreed to buy from you after you sell their home. I would much rather push any commission reduction request to the second transaction rather than the first. The benefits are immense! The first benefit is the time value of money. You do not have to give them value until a later time period. It also locks them into the second business promise!
“You mentioned if we do work this out that I will have your business. Is this correct? (Wait for the affirmative answer!) I will do this for you. Since you are asking for a one percent decrease in my commissions but you have also agreed to use my services on your new home purchase, I will take the (dollar value) commission reduction from the sale of your home and put it toward your down payment on the purchase of your new property.” (You had better have your buyer-brokerage agreement at this point!).
This allows you to have a listing at full commission and not pay the sellers the one percent commission reduction until they are ready to close on the property they purchase from you.
Another compromise is “Let’s work it out this way. Since I am very successful in selling properties because of my marketing, I will represent both sides of the transaction at the lower commission rate.” There are compromises that will cost you money but in a more agreeable way.
At this point, you are left with the final decision whether or not you want this listing for the return offered by the client. If I felt there was motivation and the property was salable, I would usually take the listing at a lower commission. I do not want you to start at this position!
Please start with step one and show how you earn the full commission. Don’t cut your commission without following the subsequent steps, or you will continue to sell yourself short! Sometimes, listings are just too valuable to let your ego get in the way; however, do everything you can to get your full commission.
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