No one can predict the future of real estate, but you can prepare. Find out what to prepare for and pick up the tools you’ll need at Virtual Inman Connect on Nov. 1-2, 2023. And don’t miss Inman Connect New York on Jan. 23-25, 2024, where AI, capital and more will be center stage. Bet big on the future and join us at Connect.
The story of the commission trial thus far has been, in part, the role coaching and training have played in fixing the rate of commissions, at least according to the plaintiffs’ attorneys in Sitzer | Burnett. They’ve shown slides and training videos as part of their argument that agents are being trained to nail down and insist upon a 6 percent commission standard.
In addition, a new study claims that agents are steering buyers to homes with better commissions, explaining, in part, the persistence of commissions at a more or less steady rate, even in markets where discounted commission brokerages are common.
READ LIVE UPDATES FROM THE SITZER | BURNETT TRIAL
For those who think about, write about and talk about objection handlers — not to mention agents who go into client appointments every day and defend their commissions — the upshot seems to be that it’s important to create a dialog with homeowners that’s less about how much the commission must be and more about why the agent’s service is worth the price.
Out of curiosity, I reached out to ChatGPT to see whether it would come back with information that was problematic or even downright incorrect. The prompt? If a seller asks for a lower commission, what can a listing agent say to overcome that objection?
I was rather pleasantly surprised to see that the bot’s list of ideas was pretty solid, suggesting that most of what real estate professionals know and say about objection handling, both online and, presumably, in person, would be as well.
1. Highlight your expertise
As always, the expertise and experience you have is one of the most important ways to differentiate yourself for clients. Information and talking points that reflect your years in the industry, specialty certifications and more can go a long way toward justifying your commission.
Action item: If it’s been a while since you revised your bio, updated your website or got a new certification or designation, this is a great time to do so. If you’re fairly new to the industry but have worked in a related field like law or finance, incorporate that experience to add depth to your bona fides.
2. Showcase marketing strategies
Outline the types of marketing strategies you use to help your homeowner’s listing stand out from the crowd. Professional photography, copywriting, videography and content creation are all value-added services that you probably provide and pay for out of your own pocket. Make sure you communicate their value.
Action item: I recently had a property description client reach out to me for a brief bio highlighting my experience and expertise so that she could communicate the value I add to the marketing plan for her listings. If you work with local or national experts on your marketing, share their information with your clients so that they can better appreciate the team you’re bringing to the table.
3. Provide a comparative analysis
Data can be incredibly convincing, so crunch the numbers and find out how to quantify your value. Do your listings sell for more? Sell more quickly? Does your brokerage enjoy a game-changing advantage? Does your marketing get results? The more you can show the nuts-and-bolts value you bring to the table, the better your chances of defending those commission dollars.
Action item: If you don’t have time or skill to put those stats together, reach out to a service that can help you do so or dig into the research provided by your local real estate association. Add this type of analysis to your lead-gen plan, as well, so that you’re cultivating warm leads who are eager to work with you even before your first conversation.
4. Offer a flexible approach
The more you are willing to think outside the box and prove your value, the more likely you will be to convince the seller as well. Be confident enough to negotiate and consider different commission structures, such as tiered commissions or performance-based incentives, to meet the seller’s needs.
Action item: Sit down with your broker and work through the way an alternative commission structure could be developed and communicated. At the same time, talk to them about their plans for adapting to any changes that may follow the outcome of the current commission trials.
5. Stress the importance of representation
There’s a lot that goes into prepping and pricing a listing, marketing it and talking it through the escrow process and all the way to the closing table. If you’ve never outlined what that process looks like, and how you can help during every step of the process, this is the time. Don’t hide your light; make sure you’re selling yourself and the service you provide.
Action item: If you’ve been reluctant to toot your own horn because it might come across as braggadocious, this is the time to get over it. You must be able to talk about the importance of the service you provide from a variety of perspectives so that the client knows exactly what the commission is paying for.
6. Demonstrate a strong track record
Success stories and testimonials from past clients build trust and show that you consistently deliver results. Repeat clients and referrals are even more convincing, demonstrating that you are a trusted resource for buyers and sellers not just once, but time after time.
Action item: If you haven’t focused on gathering and using testimonials and reviews as part of your marketing plan, the time has come. Expanding the reach of your word-of-mouth marketing is one of the most convincing and effective ways of demonstrating the value you bring to a real estate transaction.
7. Reiterate your commitment
Clients may not fully realize the role of their real estate agent in providing skilled and dedicated services. They may not even understand what fiduciary duties entail. That’s where you come in. Make sure that they understand that you are on their side and that your commitment is to them and their best interests. If you don’t do dual agency, make sure they understand why as you explain their options.
Action item: Consider adding language around fiduciary responsibilities, along with a glossary of real estate-related terms, to your listing presentation. Education is an important part of the service you provide and there are some things clients may not fully understand, even if they’ve bought and sold a home in years past.
Make sure your messaging is always up-to-date and stick with Inman for the latest on those bombshell lawsuits. Staying informed about what’s going on in the commission trials — and knowing how to apply that information to your business — will help you continue to grow without missing a beat.
Email Christy Murdock
