Negotiating Realtor Fees With New Clients
Often new clients want to talk you down when it comes to your commission for assisting them. This is largely due to our wonderful internet hacks telling everyone that Realtors are not worth paying.
There are so many articles pitching to both Sellers and Buyers the myth that it is easy to find, sell, buy or rent great properties without a Realtor's help. Is it any wonder people get angry when Realtors tell them their fee?
"Can't you do it for a little less?"
"Other Realtors do not charge that much!"
When lots of dollars are at stake, reputations are often on the line too. A Top Realtor's Fee is not something a wise investor haggles over.
Set a price and stick to it!
Clients do not respect a Realtor that lets them talk them into working for less than you and the other Top Realtors are asking for.
When you concede too quickly, to lower your fee, you leave clients wondering if you will cave that easily when it comes to negotiating prices for them (your clients) when facing off against other tough negotiating Realtors?
Realtors who drop their commission fee percentage at the first signs of pushback are seen as being desperate to take on any new business.
First impressions mean a lot. You are setting the stage for a long and hectic, stressful project when you allow the Client/Realtor Relationship to begin by you being undervalued.
Remember your ultimate goal is to gain clients who will hire you again and again into the future. You want repeat business but at the start of your relationship with this new client you are telling your client that they can talk you down in price. Now they will always try to talk your price down.
Do you see how you are undermining the future relationship that you can develop with this new client by being wishy-washy on your fee you charge?
Communities are small and tight knit. Once it gets around that you can be talked into lowering your fee, you will never collect your full Realtor fee again.
Be Prepared for the Realtor Fee Complainer
Know who your bread and butter clients are and why they hire you.
When you specialize in a very particular client type and their needs then that client is not going to worry about how much you charge. They need you. You do all the precise things they want done.
When clients realize that other Realtors are not so suited for them and their situations, they know they want you and only you, regardless of what your fee is.
You are the best. Doesn't everyone want the best working for them?
Still you cannot get upset when a client seems to want to talk you down in price. This is the nature of the business lately. Some clients actually think you, as a Realtor, won't respect them if they do not at least try to get you to lower your fee.
It is sort of like when you go to buy a used car. No one gives a used car sales person the asking price on the windshield. You are expected to haggle the price down. Dickering over price is part of the used car buying process.
Keep your cool Realtors. The haggler is not insulting you. They are just doing what all the internet stooges are telling them they should do...ask for a slightly lower commission rate.
Do not be mad at the game and do not get mad at the players. A Realtor's day is full of negotiations. You negotiate with contractors, the bug guy, plumbers, the landscaper... You negotiate when you place your ads.
Yep, now, once again, you have to defend your consulting price. But if you are ready for this uncomfortable moment and have practiced, it should just be a routine sales pitch for you by now, just a formality you have to go thru, a walk thru the park.
Allow your fee bargaining client to talk themselves out of breath as you listen intently. You are hoping to be working for this client soon so they deserve your respect and full focus. You've heard all the lame reasons before as to why you should work for less. Know they will soon run out of points to make. Now it is your turn to state your case.
Blurting out, "If you want the best Realtor, you have to pay!" will not cut it.
Have structured, well thought out, lower fee rate, options or packages ready to offer your potential new client for their consideration.
"Here is what I do for the lessor fee you are asking about but I strongly recommend you stick with my deluxe service at the original fee I quoted you. It is the best option for your situation and will get you the best, successful, fastest results in today's kind of market. You do want to get the most money you can for your property right? And you want it to sell as quick as possible?"
Do you see how you are making it clear that you are not dropping your price but if they wish to purchase a cheaper version of what you do that is their choice. You have a discount version available at a lower fee but you feel your primo service would best serve their purposes.
Usually just rehashing why you are the best Realtor around will not be enough to get a potential new client who has gone into fee haggling mode to sign at the original fee you are asking for. They just stare at you, not really listening to your counter points because they know that the longer the negotiations go the better chance they have of you eventually caving and agreeing to cut your price.
Things are going to get testy before they get better.
You have to act as if you do not have to defend your fee. Your fee is your fee and you do a great job for that price. Your client will be getting their money's worth, the top of the line, full package, Best Real Estate Service around.
"I feel your circumstances require my full attention but if you insist, I can cut back on my services to meet your lower fee requirements. I'm always open to exploring different ways of working together with a new client."
You are making it clear that they will get less work out of you if they insist on paying you less. But if they want to get the best job from the most qualified Local Realtor for accomplishing the job they need done then this is your price.
Some clients have a competitive personality. They have to wheel and deal.
Telling the haggler, this is my price take it or leave it, will just make them angry and they will probably walk away in a huff.
You need to defuse the situation without either you or them losing face.
"I'm very excited to be working with you. We have already gone over a lot of the value I will be bringing to your project. I look forward to working very hard on your behalf. I believe my advice and counsel will pay for my fee and much more."
The problem for the Realtor is that the fee negotiation comes at the very last stage of the new client signing process. You have spent all the time leading up to this moment tooting your resume and bragging about your skills and accomplishments and telling the prospect what you are going to do for them. Now you have to close and get their signature on your contract.
"I like what you say you are going to do for me but... Is there any wiggle room on your commission fee? It seems a little steep."
Yep, they have you at a disadvantage. They know you want their business. You have put time in, sales pitching to them. If you walk away now you go empty handed.
"Think of my Fee as an investment in your future."
You are a Licensed Real Estate Agent that means all potential clients you talk to already know that you are competent and that you know about the Local Real Estate Issues and laws. So when they question your fee, they want to know what you are going to give them that is more, over and above what the Realtor down the street, who charges 1/2 a percent less than you, is giving.
A half of a percentage point may equal a few thousand dollars saved by your client, so bargaining down your fee is a big deal to them.
You need to give a custom answer tailored to satisfy the exact individual who is asking.
You only know how to craft that answer by researching your potential new Real Estate Clients and asking them lots of questions to find out what matters most to each of them. Pop onto their social media accounts and see what they really are passionate about.
When you know what is important to a client, you can assure them that they are getting their money's worth and more from hiring you.
Hey, you know that at some point during your sales pitch every Real Estate Agent will have to broach the subject of how much their fee is. You have to eventually tell the new potential client how much you charge.
It may get awkward when they challenge you but don't bark, "NO! I won't lower my fee! I don't lower my fee for anyone and I ain't about to start now!"
Don't you think it would be wise to have a strategy you have rehearsed for discussing your Realtor's fee?
Yes, practice your fee discussions with another Realtor at your firm the day before you have a scheduled presentation to make to a potential new client.
Switch roles when you rehearse so you get a full understanding of where each player is coming from when it comes to talking about how much your services cost.
Getting what you deserve to be paid requires preparing to talk about your Realtor Fee in a way that clearly shows you are worth receiving that much money.
Researching your client allows you to tweak your usual Realtor Presentation so it is more personal and compelling for the individual you are meeting.
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