As a listing broker….how do you justify your high commission?

Can I have some more coffee?OK, here I go again, jumping into the Lion’s Den. In today’s post I want to take another shot at answering the question “As a listing broker, how do you justify your high commission?” My goal is to answer this question in a way that will satisfy, “the Sultan’s of Short Sales, the Crusaders of Capitalism, and the Prophet’s of Profit…Barry Cunningham and Barry Johnson” over at Real Estate Radio USA . I know, your probably thinking, “Broker Bryant, why are you wasting you’re time with these guys?” Well…..it could be because I’m stubborn or…..maybe I’m just an idiot!! 

But, the real reason, is that I feel it’s an important question and it deserves an answer. I had written a post on this topic back in November of ‘06 titled, “So what do you do to justify your high commission?” and in March of this year I went on Real Estate Radio USA to attempt to answer the question again. I wrote about it here, “Real Estate Radio USA and Broker Bryant Solve World Peace! Or Not!!”  I, also wrote, “Compensation or performance. Which one will it be?”  back in December of 2006.

Yesterday, Jennifer Allan of “Sell with Soul” fame went on the show to try and answer the same question. You can listen to her interview here. Jennifer had the same problem I did, trying to explain to the Barries how we justify our commission, without placing a dollar amount on every little thing that we do. 

In this day, of disintermediation and transparency, I truly believe that it is the intangibles that will make or break us. There is no doubt that Sellers can find everything they need, to sell their property on their own, online. Heck, they can even get their property placed in the MLS for just a few hundred bucks. And the reality is MOST properties, by far, sell through the MLS. I think the figure is about 85%. 

They do not need me to “market” their property and that’s a fact. So why pay me x% to market their property? They shouldn’t. If all they needed me for was marketing their property then I agree completely they are wasting their money. Hire a marketing company like “For Sale by Owner” and have at it. Just….. 

  • Be prepared to pay them upfront. 
  • Be prepared to arrive at your own pricing.
  • Be prepared to arrange all of you own showings. 
  • Be prepared to screen potential Buyers. 
  • Be prepared to negotiate your own deal. 
  • Be prepared to complete all contracts and disclosures required by law. 
  • Be prepared to deal with inspection issues. 
  • Be prepared to deal with unscrupulous REALTORS®, lenders and Buyers. 
  • Be prepared to deal with your own emotional issues with no one to turn to for advice and comfort. 
  • Be prepared to dispute a bad appraisal. 
  • Be prepared to find another Buyer when yours decides to walk at the last minute because you lost your temper with them over a $100 washing machine. 

All of these things sound very simple. However, anyone who has been in the business long enough knows that it’s the small things that can blow a deal out of the water. Especially when emotions are involved. 

Of course, all of this assumes that you priced the property right from the beginning and that it was market ready. If not…then none of this other stuff even matters. A property is sold at time of listing. 

BUT….there are Sellers that are prepared to handle these things and if they are able….then they should. They do not need a REALTOR®. And they may very well be successful. I truly hope they are and wish them well. These folks are not my “market” and justifying my commission to them, is a waste of my time. And without a doubt….this group includes the Barries.

Now, if you are not in this group….give me a call and let’s get together. We can then sit down, look at your situation and arrive at the best plan for you and your individual situation. I will then justify my commission to you. Fair enough?

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