Guest article from David Willis – Cutting Commissions

Guest article writer David Willis gives his take on the discounting of commissions……

So who cuts commissions?

The harsh truth is; agents who don’t know any better, agents who haven’t been trained, agents who are financially desperate and agents who simply cannot compete on an even playing field based on skills and experience.

These salespeople CAN learn to sell and increase their incomes to the level they deserve, or they can stay in their own reality that they don’t deserve the full commission therefore, offer a fee discount before the client even asks for it. “Our fee is $xxx, but we’re negotiable” is the catch cry of a desperate, scared salesperson.

So who wins when commissions are cut?

The truth is that nobody wins. Why? Picture this; you’re a highly skilled salesperson and you have a qualified, motivated buyer who you’re showing properties to. The buyer is going to buy something TODAY!

Whose properties are you going to show? Now you need to be honest here; are you really going to get excited about the properties that have reduced commissions, or will you throw your all into the full commission properties? I think we all know the answer there.

So who are the losers when commissions are cut?

First and foremost are the property owners…. the sellers. They mistakenly think that they’re winning by saving a few hundred dollars – probably egged on by ill informed friends and family “if they want your business badly enough, they’ll cut their fees”!

In reality, these sellers lose because the highly professional salesperson (the one who has the skills and ability to get the sellers the highest price) is reluctant to show properties that are at lower rates.

In case you’re wondering; this is not called greed – it’s simply called good business…..

The skilful agents attitude is “well, if I have to work “x” number of hours to put a deal together, I might as well get paid a fair fee for the time spent.

The seller loses because the agent who took the Listing was weak in the first place. The agent has gone down the path of least resistance, so the seller who thinks they had an initial win, actually loses twice; they’re getting very few showings AND a less competent agent to negotiate for them.

Here’s something else to ponder; if an agent has twenty Listings and four of those have commission cuts, is it fair for the other sixteen to pay a higher fee?

What if a couple of these sellers meet up at a barbeque and get talking (as they do)! One finds out that you’re charging him more than his mate down the road?

You’d better have your asbestos suit on when they get hold of you, cos you’re going on the fire!!!!!

Who else loses?

The buyers lose – because they may not even get to see the home that could be right for them. As you can see, there are too many professional agents who simply won’t show homes at less than what is considered to be a fair commission rate.

The showing agent loses because if they eliminate Listings with lower commissions, they have less stock to show their buyers and therefore, are reducing their chances of a sale.

On the flipside to that, if they do have to end up (reluctantly) showing the property, do you think they’re going to be excited about being there? Passion is transferable and passion sells!! If an agent gets excited, buyers pick up on that energy. Anyone care to challenge me on that???

Kind of makes you wonder why anyone would EVER cut commissions, doesn’t it??

If you’re having trouble obtaining full fee Listings or you need some guidance on going into a Listing presentation with confidence, let’s get together for a chat to address that as soon as possible.

I’m expecting plenty of feedback on this topic, so please, don’t hold back with your thoughts or opinions. I welcome feedback with open arms!

Hope to speak with you real soon.


David Willis

Real Estate Sales Coach

Comments 1

  1. paul wilcox

    Perhaps we should go back to a regulated society so everyone starts at the same level then its up the best salesperson to get the listing based on experence, results , knowledge etc.

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