.

Commission rates are under fire and on both sides of the transaction.

And you need to be prepared with strategies to defeat that effort., this one, by Jay Thompson, one of Inman’s top writers. His weekly Inman column publishes every Wednesday.

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Editor’s Note: The settlement Jay alludes to (below), is going to really hurt the “big box” brokerages, whose business/commission model is “OFTEN” bloated by large franchise fees and management salaries.

If you are considering making a brokerage change, the 1st quarter of the year (when pipelines are typically depleted and listing agreements are expiring) and is the best time to begin the interviewing process; and before the NAR settlement is finalized.

Inman: 7 things NOT to say
when defending your commission

Commission objections have been around forever, and they’re likely to increase in today’s consumer knowledge and behavior world.

There’s “commission compression”.

There’s the DOJ/NAR lawsuit and proposed settlement.

Then, there are the “discount brokerages.”

Throw in the sometimes dreaded and often maligned tech companies and “disrupters,” it seems like someone is always out to carve a slice of the real estate commission pie. 

Last week, Carl Medford penned a great piece, Defend your commission! 3 steps for showing sellers you’re worth it.

You need to get busy if you don’t understand and can’t effectively communicate your unique value proposition.

Search Inman News for “commission objection,” and you will find a lifetime of reading. You can learn from how others handle objections.  You can also learn from what NOT TO DO.

As I’ve perused the conversations about dealing with commission objections over the years, the same things tend to pop up repeatedly.

Agents tend to say the easy things to say. On the surface, they feel like solid arguments.

Upon deeper consideration, they are best left unsaid.

1. ‘My services to buyers are free!’

Let’s not ignore that both the buyer and the seller feel like they are paying (because they are).

One thing you best not ignore, whether you like it or not, is that the proclamation that “buyer services are free” is going away as soon as the DOJ/NAR lawsuit settlement is finalized in early 2021.

2. ‘My broker and the IRS get much of that money!’

This is probably the phrase that’s repeated most often. Guess what?

The consumer doesn’t care. Do you know who else pays taxes? The person you’re talking to, trying to justify your commission.

While they can relate to the pain, you’ll get no sympathy from your fellow taxpayer.

3. ‘Sure, if you put me on the title.’

Not only is it absurd, but it also shows you have terrible math skills. Stop saying it.

4. Blame your broker

Take the easy way out — blame your broker. “It’s my broker’s commission (truth), and they won’t let me discount it.” (Maybe true. Maybe not.)

When I ran a brokerage, I encouraged my agents to “blame me” if they got into a sticky situation, and of course, I had their back.

Hopefully, your broker has yours, too. Most do, and some do not. Before tossing this line out, you best know where your broker stands on commission rebates.

5. ‘It’s the MLS’s fault. Or Zillow’s. Or Redfin’s. Or NAR’s

More excuses, more passing the blame. Your commission rate is set by yourself, with the possible exception of your broker.

Specious arguments don’t sit well with buyers, sellers, or anyone. Today’s consumer is way more knowledgeable than many like to admit.

If you’re entering a commission battle with a well-armed consumer, leave the blame behind and focus on the value proposition.

6. ‘No one asks their doctor or lawyer for a discount’.

This one seems to be surfacing more and more often in commission-cutting discussions.

First, you’re not performing brain surgery, saving lives, or keeping people out of jail.

Yes, your job is essential. Yes, you’re helping someone through what is likely one of the largest financial transactions they will make.

But you shouldn’t be comparing yourself to doctors, lawyers, or any other profession. You’ve got a pretty unique role; use that to your advantage.

7. ‘Commission rebates are illegal, so I can’t.”

The point was made by an agent in California — where real estate commission rebates are perfectly legal.  Using Google, it took me five seconds to verify that, straight from the CAR.

You don’t think the consumer requesting a rebate can verify it just as easily? Really? This argument comes up all the time. Although commission rebates are legal in 40 of the 50 states.

Copywrite © August, 2018 Daniel Dobbs MHM Mortgage /// All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Daniel Dobbs, Author- VP-Broker Mutual Home Mortgage 265 S. Randolph #120 Brea, Ca. 92821 Cell: 949 250-3981 Dandobbs6@gmail.com NMLS #307631 BRE #00986886