Defend Your Commercial Real Estate Commission – Don’t Reduce It

Have you ever had a client come to you and ask for a reduction in commission?  It’s a common problem, particularly with clients that want to ‘open list’ instead of ‘exclusively list’.

If the client is looking for discounts from the very start of your relationship, you should ask yourself whether you really want the listing on your books.  Think about this:

• Reducing your commission overlooks or discards the high value of your services and relevance in a specialised property market segment
• A reduction in your fees shows little respect and understanding on the part of the client as to what you are really doing or will do in promoting their property to the target audience

As soon as you accept a discounted fee, you are cheapening the services and the skills that you offer.

Does the client really want to sell or lease their property?  If they do, then the small difference in fee adjustment they are seeking in fees is more than offset in faster results from the sustained efforts that you apply to the property at a normal commission.  Top efforts in property marketing and agent focus allow the highest and best result achieved from your property promotion.  That means the best price in the timeliest way.  That is really what a client requires and not a ‘fee adjustment’.

This fact below may upset a few of my agent friends but I will say it anyway:

‘If an agent accepts a fee or commission discount, they are not a top agent. They have probably not sold their skills sufficiently in the property listing presentation.’

The client can ask you for a reduction, but you don’t have to accept.  Remember the skills that you offer; they should be special and unique.   If you are really the best agent in a market segment and a property type, then fee reduction is not an option to be considered.

Now there is only one exception to this rule.  If the client can or does give you multiple types of property business over time, then a fee package can be sensible.  Only you can assess that situation based on the client’s commitment to working with you.

If you offer the most comprehensive property marketing package and specialised real estate service locally, pitch and sell your skills comprehensively in the listing presentation.  Make sure that your differences are well understood by the client.  Stand out as the best agent with the best ideas and the maximum amount of effort.  Don’t discount your commissions or fees.  Walk away from a client that asks for such.  Your professional services demand a fair and reasonable return for all the time and effort you will be applying to the property.