Entry by Mollie Wasserman

Interesting Post on AR: Buyer Asked for 50% of my Commission

Interesting post today from an agent saying that a buyer asked her to rebate back 50% of her commission and how she said no. Tons of comments about how she did the right thing.

But there was one comment from an agent saying that "we get paid enough on the deals that do close to compensate us for the ones that don't."

But am I the only one who wonders how does the public feels about this??? Do you think they feel good about subsidizing the deals that don't go together?

The commission system is broken: the public knows it and deep down so do we only we don't want to admit it. The time has come to start charging a fair fee for the services we provide instead of a percentage of the sale. If done properly, the consumer pays fairly and we get paid well without all the commission shopping.

Am I crazy? Am I the only one who thinks that the reason we're hit up to reduce our commissions is because they're not fair. Any thoughts?


I don't think the typical buyer or seller understands how we are paid, let alone that their transaction is subsidizing the failed transactions.

I can't tell you how many times I've had to clarify that, no, it's not a company car and no, I don't get a gas allowance and no, I'm not getting paid for the time we are together. They don't understand marketing their home, whether print, online or whatever, is my dime and my time - not the company's.

I think a lot of people ask for reduced commission for the same reason they go to a yard sale and want to buy an already cheap item for 1/2 price.

I'm in a networking group with others in home related services and we all face consumers that want "it" for less. It doesn't matter whether it's the plumber, electrician, home inspector, the lender or me... we've all had similar experiences.

I totally agree the real estate compensation model is broken - if it was ever whole. But consumers resenting subsidizing "failed" transactions, "sellers" who are testing the market or "buyers" who are just tire-kickers - I don't think they have a clue.

Just my quarter's worth!

You're probably right Betty - the vast majority don't get it.

But I do wonder if they feel that our commissions have a lot of "give" in them. What with referral fees and those that are willing to cut commissions if pressed, or maybe I'm just projecting what I know to the consumer.

I'm not a registered user on ActiveRain so I can't read the post and comments. But ...

The commission system simply does not correlate in any manner whatsoever to being paid for work performed. Period.

As the creator of the SmartPlan for SmartSellers and SmartBuyers, I can easily justify my compensation for the work performed. For a buyer, after accounting for my time if there is anything left I automatically rebate the difference. They know my philosophy and business approach UP FRONT. No guessing or silly questions later on.

Let me add another qualifying thought ...

I justify my compensation with a combination of hours of work performed times my hourly rate plus any out of pocket direct expenses. The hard part to justify is the hourly rate. For example, if a client doesn't think you are worth $400/hour, they won't want to use you. No different if you are a plumber, electrician or general contractor. So, the real question is: How did you set your rate and is it competitive in the market place and does it match up with your experience, approach and documented results? There is a "value proposition" equation here somewhere. What makes you better than anyone else and why?

This is a timely discussion.

Another thought ...

Until the industry comes to terms with disconnecting the buyer agent compensation from the seller's offer of compensation, we will continue to struggle with the whole questions of being paid properly for our services.

There are some interesting posts that I would like to see other ACRE's comments. Go to ActiveRain and take a look at Gail Harris' posts. BTW, I think Gail would make a superb ACRE. Pretty sure she will be taking the course but would like more of us to encourage her.

Take a look 'Charging Advance or Retainer Fees Up Front-Is Anyone Doing This as a Regular Business Practice?'

'Retainer Fee of $100'

This page contains a single entry by Mollie Wasserman published on July 19, 2010 1:11 PM.

The Buy side commission if prepaid by the task prior to closing was the previous entry in this blog.

Real life consulting incident is the next entry in this blog.

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