to encourage dialogue. One common reason I used to get was: “I really need


to save that money because I’m not going to have enough to close.” Right there, that would open the door for us to have a very honest discussion about whether or not they should even sell their home right now. Perhaps this is not the right moment for them to embark on such a fi- nancial venture. It’s better to get the truth on the table now instead of finding it out later. I would ask more questions such as, “What happens if


the market doesn’t respond to your home at this price?” This takes the conversation away from the commission and toward the bigger reality that maybe they cannot afford to sell right now. Once you encourage discussion about commission-


cutting and find out the reason behind the seller’s re- quest, you are in a much better position. With the information you’ve learned, you can calmly and clearly articulate why you don’t cut your commission. I used to say, “I don’t cut commission, but let me explain


to you why I don’t and how you save money when I don’t.” This is when I would pull out my “secret weapon”. Ac- tually, my “secret weapon” isn’t much of a secret. It’s just something that most agents don’t keep track of, but should. It’s a “List-to-Sale Price Ratio”. This number came in handy many times when I was a working agent, and it is a crucial tool for your toolbox.


HOW I WOULD USE MY LIST-TO-


HERE’S


SALE PRICE RATIO:


1


his or her List-to-Sale Price Ratio. I can guarantee you that the agents who track their List-to-Sale Price Ratios are the ones who beat the market every day of the week. These agents are constantly measuring their effective- ness, so that they have a “secret weapon” of their own to use when asked if they will cut their commission. I do want you to know when I was an active agent, I


did cut my commission on three occasions. But in each of these cases, it was because I wanted to. My rule was I never cut commission unless it’s something I want to do. One case was a family whose home had been de-


stroyed in a fire. They truly had a financial crisis on their hands, so I offered to cut my commission — without them asking. The power is in your hands. If you truly believe that the people you are serving are in such dire need that a commission cut is the best move to make, then go ahead and do it. But if you feel pressured to cut your commission just because the seller wants you to, then don’t. You are a valuable contributor to your com- munity and you deserve to get paid for your hard work. But whatever you do, don’t get mad or stunned when


someone asks you to cut your commission. It’s a normal part of the negotiation process. If you have a strong List- to-Sale Price Ratio on your side, though, then you are in a great position when the question comes up.The best action you can take today is to start tracking your num bers — and practice using them to articulate your value


I would show the seller that if an agent like me had a


List-to-Sale Price Ratio of 98 percent on a $500,000 home, then that home would likely sell for $490,000.


Let’s say they asked me for a one percent commission cut. That’s a supposed savings of $5,000.


2 3


Of all the competing agents, the best has a List-to-Sale Price


Ratio of 95 percent . On a $500,000 home, that’s a sale price of $475,000. Even though that agent would be willing to gift them $5,000 in commission, the seller is still only netting $480,000.


The numbers become starkly clear. By working with


a strong agent with a proven track record-me-the seller nets $10,000 more. And that’s without a dime cut from my commission. This example shows that it’s not about how much of


a commission cut an agent can give a seller. It’s really about how effective the agent is — which is proven by


14  Georgia REALTOR® when a seller asks you to cut your commission.


Denise Lones is President ofTheLonesGroup Team based in Bellingham, Wash. The Lones Group specializes in helping Real Estate Agents, Brokers and Business Owners implement new systems and effective marketing techniques to give them a com- petitive edge. Visit their Web site at www.thelonesgroup.com.


JULY/AUGUST 2010


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46