Hi, I’m Travis Thom. A few years back I became a top finalist for Realtor Magazine’s Top 30 Under 30. I was considered a top listing broker in my market, with over 250 personal listings, and a sales team closing millions of dollars in sales.
I’ll be frank, it wasn’t all sunshine and success at first. I had my fair share of struggles and made plenty of mistakes but those challenges helped me become a top producer and today I’m going to share those mistakes with you, how you can avoid them, and what can be learned from my personal experience so that you can reach success faster without the pitfalls and pain.
Sound good? All right, let’s get started.
I’ve been in the Real Estate business well over a decade now. I started when I was just 18 and I have managed over 50 Real Estate agents as a Qualifying Broker and Owner of my own brokerage so I’ve earned my stripes by successfully navigating myself, and my team, through two major recessions and one major boom.
Here is the first of the Top 3 mistakes that I made, experienced, and witnessed first hand.
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
We’ve all been there. We get the call, and then the appointment, only to have the seller ask “Will you take a 2% commission?…” Ugh… It’s the best way to ruin your afternoon and even though you may “NEED” the business, saying “Yes” to this proposition just to get the listing is a surefire way to keep your income low and depreciate your professional worth. Remember: You are ALWAYS worth your full commission.
Usually the sellers that ask you to discount your fees are the ones that are going to suck up all of your time. Let me repeat that – they will suck up not just some of your time but all of your time. By saying “Yes” to discounting your commission you have now set the standard that you will roll over, sit , stay and fetch when asked, not to mention the pain of doubling your work, for half the fee you deserve.
Start by asking the seller why they want an agent that would offer a discounted fee. By asking the seller this question you immediately assert your professional authority while seeking to understand why they would want this.
They may answer back with “Because I want to save money” or “This should be easy to sell and you’re not going to have to work that hard.” These are the top two answers I have encountered, by far.
“Mr. or Ms. Seller, I understand your desire for a discounted commission. However it would be erroneous for me to discount my fee because, as a result, I would be discounting my service to you. I provide exceptional marketing and service, which are never discounted or diminished. I work hard as a professional to protect your interests, ensure a profitable sale and a smooth transaction. Therefor, I cannot discount my fee or my service.”
Did you see how I wrapped up the service with the fee? The two are now entwined with each other so that they can’t be separated and the seller is forced to recognized the dilemma. A discounted commission means a discounted service and, as professionals, that is not how we conduct business or make an income.
If you’re still having a hard time justifying saying “No”, try thinking of it like this: you get what you pay for. For instance, a $500 website vs. a $1,000 website will still result in a website, but the quality between the two will be drastically different. OR, a $500 car vs. a $1,000 car. Both have 4 wheels and the ability to get you from point A to point B, but you’re probably much better off spending $1,000 in the long run for a better car. The same idea applies to Real Estate commissions. You are worth your fee.
Once, several years ago, a developer client of mine asked me to drastically discount my commission because I was, ultimately, representing numerous units and stood to make a substantial commission over time by selling each of them off. The problem with this scenario had multiple layers but I came up with a bold counteroffer that proved to him I was confident in my abilities and my worth, but also motivated me to work as hard as I could to sell the units as fast as possible: Instead of discounting my commission on day 1, list the property with me for a 7% commission (higher than a standard listing) for 60 days. If I can’t sell the remaining units in these 60 days then we will drop the commission amount by 1% every 60 days thereafter until we hit the original discounted commission he originally requested. He went for it and I ended up selling nearly half of the units in those first 60 days for a 7% commission and the remaining units in the following 60 days for the standard 6% commission. By being bold and asserting yourself it proves to your client you are confident and up for any challenge, but also proves you are worth the fee.
Tomorrow I will go over Top Mistake Number 2 so look out for that email.