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Last week, I talked about Defending Your Commission by presenting yourself as a rare pink diamond instead of a crusty old rock from the pawnshop.

If you’re a highly skilled and experienced agent, who consistently delivers outstanding results, shouldn’t you get paid more than the ‘average’ agent?

Certainly, but it should be through increased demand for your services and improved efficiencies—not by charging more, one deal at a time. I mean, you could charge more, but is it really worth it? 

Big picture thinking is how much you make in a year. Small picture thinking is how much you make on an individual transaction. 

Let’s say you charge a little more to ten different clients, enough to make up one full extra commission. You do a great job for all ten clients, and they all still recommend you to their friends, but now it’s with a caveat, “He’s great, but he charges a bit more,”

You’ll never know it, but that caveat was enough to prevent two potential clients from calling. You think you’re one commission ahead, but actually, you’re two behind. And the missed opportunities snowball from there.

Besides, the public should expect a high level of service to warrant a five-figure expense for a single transaction, don’t you think? I want my clients to say I was worth every penny, and then some. I want to confidently tell my clients that I charge only the average rate, but I deliver results miles above average.

This is a hot topic for me right now because I’ve recently heard about a Mega Team where the new agents have to sign a contract (I’ve seen it) agreeing to a commission split of 30/70 (30% for them and 70% for the team leader) if they charge “only” the typical prevailing rate in their market.

To “earn” the “full” 50% split on a $500,000 property, the commission earned on the seller’s agent portion is over 84% higher than the prevailing rate!  

This percentage goes higher and higher on more expensive properties, crossing the 100% higher threshold at $800,000.

Essentially, this means that the seller is now paying three full commissions—one to the buyer’s agent, one to the seller’s agent, and one to the seller’s agent’s boss—the greedy Mega Agent who is doing absolutely nothing. If only the sellers knew that the famous Mega Agent cares so little about their listing, he’s probably not even aware of its existence.

All commissions are negotiable, but in my opinion, charging this much is an obscene abuse of the public’s trust. Do you think these Mega Team agents tell their clients the “standard” rates charged by the majority of their competitors? I think not.

And by the way, who do you think is willing to pay these outrageous fees? I’ll tell you who:

Honest, trusting people who don’t know any better, including the elderly and immigrants. 

The sad irony is that the folks paying these ridiculously high commissions probably actually believe they’re getting more for their money. But despite the flashy advertising and misleading promises, the listing agent they’re dealing with is most likely inexperienced, unskilled, and poorly trained. 

The Mega Team is charging more money for an inferior level of service compared to any high-integrity, highly-skilled, individual agent (or small customer-service-focused team). 

Think about how you would feel if your parents or grandparents were taken advantage of in this way.

I’ll tell you how it makes me feel. My blood is boiling as I write this, and if you know me, you know it’s not going to end here in this little blog post. Stay tuned…

Hold onto your integrity. It’s worth a thousand times more than charging even a tiny bit more on a single commission.

During my full-time career, I was rarely ever asked for a reduction of my commission. There’s a good reason for this, which I will explain within this post.

Early on, when I was a relative newbie, I’ll admit that I caved and negotiated a reduced rate on a few occasions.

I regretted it every single time.

Turns out, it’s the people who respect your value the least who are the most demanding of your time and also the biggest pains in the butt.

If I could do it all over again, I would never give a discount, even if it meant losing a deal now and then. I’ve learned that if you turn away one pain-in-the-butt client, somehow you gain two super-nice ones!

If you keep this in mind, it’s hugely liberating when you can muster the courage to decline a marginal listing – one that you know is going to be a pain-in-the-butt.

Think about it. You always know, don’t you?

The biggest reason I hardly ever got asked to reduce my commission is because I’d already sold them on hiring me long before the topic of commissions came up.

Not to blast my own trombone, but purchasing a rare one-of-a-kind diamond is not the same as shopping for the cheapest rock at the pawnshop. Try asking for a discount on the perfect one-carat pink at Tiffany’s. 

The trick is to cast yourself as the rare pink diamond, not the ugly pawnshop rock.

Within my listing presentation, I don’t even mention the commission. I wait until we’re reviewing the contract, at which point I tell them the rate and then move on to the next clause. At this point, they’ve already decided to hire me, and it’s a moot point.

The worst thing you can do is to make the commission a point of discussion.

If they ask, I just tell them I charge the exact same rate to everyone because I don’t feel it’s fair to run my business any other way. My rates are consistent, and so is the extremely high level of service that I offer to each and every client. I can say this with absolute confidence because it’s true.

Their response 99% of the time is, “Okay, that’s fine. Thank you.”

If they persist, my spidey senses kick in, and I will politely suggest that there are plenty of discount agents they could hire, but of course, you get what you pay for, just like everything in life. Then I’ll explain how the commission works and how they need to ensure that the discount agent reduces their rate from their side only, not the buyer’s agent side.

Then I’ll ask them if a discount agent can’t defend their own value, do they really believe they’re going to stand up and defend the value of their property? Do they really think they’re going to get the equivalent level of skill, experience, and dedication that they’re getting from me? Do they really think that a discount agent will deliver anywhere close to the same sale price that I can?! 

What’s more important? Saving a few pennies on the commission or a much higher net result?

I explain these things with a look of incredulous indignation. Then they apologize profusely, and I forgive them and move on.

It’s all about presenting yourself with confidence and authority and knowing in your heart that you actually are a rare pink diamond and not a cubic zirconia. Otherwise, it’s all fake, and I don’t do fake. 

If you’re not currently a pink diamond, it’s easy to learn to be one.

How often have you heard this?

“My clients like the property, but they don’t want to participate in multiple offers.”

I roll my eyes and have the overwhelming urge to respond in my snarkiest voice, “So your clients would prefer to have ZERO chance rather than SOME chance? They’d rather wait until there’s an inferior listing that nobody else wants?”

I have to restrain myself, every time.

Of course, I’ve had my own clients who suffered from FoMO Syndrome. They heard some obscure story about “bidding wars” and didn’t want to get suckered into paying more than they wanted to, somehow.

“I sure don’t want to get into a bidding war!”

So I educated them. Starting with this:

There’s no such thing as a bidding war!

It’s your job to explain how our system actually works and how your clients could still “win” in a multiple offer scenario without paying a dime more than they want to. 

I mean, if there are 14 offers on the property, and they want to write $25K under, forget it.

But I’ve written offers under list and won in multiple-offer situations numerous times in my career. It just depends on the circumstances. The bottom line is if you don’t try, you definitely don’t win.

It seems appropriate to quote the Great One on this topic.

“You miss 100% of the shots you don’t take.” – Wayne Gretzky

What’s the worst thing that can happen? You don’t score. But sometimes, you get a fluky one, even if you’re shooting from outside the blue line.

Here’s what I’ve found from experience: Once you’ve convinced your clients that there are zero risks and nothing to lose by giving it an honest try, their mindset shifts. 

Before, they were adamant, “No possible way are we competing!” 

But after you educate them, “If we’re going to compete, what is the highest price we’re willing to pay?”

Next, they’re asking what you think it will take to “win.”

I usually give my clients a range of probabilities based on my experience. For example, “At this price, I’d guess you’ve got a 50/50 shot. At this price, maybe it’s 75%, or at this price, 10%. 

But 10% is still better than 0%!”

Of course, I underscore all this with the standard, “there’s no way to know for sure” speech. Then let them decide. Your job is to provide guidance. It’s up to them to determine how much they want it.

This is not about manipulating your client and talking them into doing something they don’t want to do. It’s the opposite of that! It’s about educating them so they won’t miss out on a golden opportunity for no good reason.

I can’t even count how many times my clients started with a severe case of FoMO Syndrome and ended up winning a multiple-offer scenario, just because I took a few minutes to cure them. ‍⚕️ 

Even if they weren’t successful, the experience of writing and submitting an offer was great “practice” for them, and they were far less hesitant—downright enthusiastic in fact—the next time around. 

Education is the best path towards overcoming an irrational fear.

Just remember, if your clients are suffering from FoMO Syndrome, it’s your fault – not theirs.

Most REALTORS®: “If only I had more leads, I’d be wildly successful.”

Me: “Leads schmeads.”

I never chased a cold lead once in my life, but somehow still earned yearly commissions in the upper $800,000’s as an individual agent.

I did it by consistently and thoroughly impressing my clients and building a business that generated a never-ending stream of incoming referrals. Of course, referrals are leads too, but they’re blazing red-hot leads like the surface of Venus, not stone frigid blue like Pluto. 

There’s a world of difference.

One of the ways I impressed my clients was keeping the tough deals together, sometimes with duct tape and Krazy glue, or whatever was needed. After all, we are problem solvers; the better we are at finding solutions, the more successful deals we complete, and the more referrals we get.

Last week, in The Dreaded Question Every Agent Gets Asked, I talked about how the public tends to put so much importance on your “marketing plan,” but marketing is only one of many important components of your work. For example, your communication strategy with your clients is even more important than your marketing plan. 

You’ve got an unmotivated buyer or seller. What do you do?

You’ve just had a bad home inspection. What do you do?

You’re dealing with an inexperienced, unskilled agent. What do you do?

You’ve got to be tenacious, creative, and skilled to keep the tough deals together, and reduce the time you spend dealing with bad situations.

Most agents give up way too easily. They explain to me what happened and why their deal blew up as if it was inevitable, So I ask them: Did you try this? Did you explain this to your clients? Did you try bridging the gap this way?

“No, I never thought of any of those things….”

The skills needed to keep more deals together and make more money are entirely learnable and almost always revolve around better communication.

But rather than me trying to explain how to deal with a thousand different scenarios, if you’re experiencing a difficult situation right now, please give me a call, and maybe I can help you put a different spin on things.

If it’s too late, perhaps at least I can suggest a way to avoid a similar situation in the future. Almost certainly it’s got something to do with having better communication before the problem comes up.

I’m dead serious about calling me. Do you know why I started Agent Skills? It’s because I love helping agents from all over North America, and I’d love to brainstorm a solution with you.

Quite honestly, even if I can’t help you in your current situation, understanding your challenges may help me to improve my program, so it’s a win-win.

Here’s my phone number 403-973-9730. Call me now!