5 Tips for Negotiating Your Fee

Laurie Moore-Moore, Founder of the Institute for Luxury Home Marketing, offers these great strategies for showing your value and earning the fees you deserve for providing full service:

1. Drop the word “commission” – Instead of talking about your commission, talk about your “professional fee.” It may seem like a small thing, but terminology matters. The change in terminology puts you in the category of others who charge professional fees, from CPAs and lawyers to financial consultants.

2. Be simple but firm – When asked to negotiate a lower fee, there are a number of ways to respond. If a simple, but firmly said, “No. Next question?” doesn’t work (many agents say it does for them), you might respond with, “Why do you ask?” We assume a seller asks because he or she wants a lower fee. Maybe not. I once had a corporate executive tell me he always asked real estate professionals he was considering for a reduction in fee. “I was looking for the agent who looked me in the eye and said, ‘No. I am worth full fee because of the service I deliver.’” The key factor is the value you deliver. As some real estate pros say, “If I can’t negotiate my own fee, how could you expect me to negotiate best price and terms for you?”

3. Discuss your services first – This gives you the opportunity to demonstrate the value you will bring to the transaction before any fee negotiation. If asked about reducing your fee before you have discussed your services, you might simply say, “Let’s defer the discussion about my professional fee until after we’ve reviewed the marketing plan for your property.”

4. Use a “take away” strategy – Once you’ve concluded your marketing plan presentation and reviewed your services, the fee may not even come up. If it does, some agents use the question, “What aspects of the marketing plan we have just reviewed would you like me to eliminate because if we are talking about a different fee, we are talking about a different marketing plan.

5. Counter the competition – The seller may add some pressure by telling you that your competitor will list for less. If so, try this approach: “That’s interesting. Let me make sure I understand. You are telling me that you just out-negotiated the other agent. When you think that you might be depending upon that agent to negotiate the price and terms for your sale, how does that make you feel?” Probably not very confident!

Consider the two-day Certified Luxury Home Marketing Specialist (CLHMS) certification course, where you’ll learn about these approaches and much more.

Read more about these strategies here.

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