You Never Have to Cut Your Commissions Again
Summary
Here are 3 keys to never having to cut your commission…again:
- Greater Expertise. Commit to having a level of expertise greater than other real estate agents. People don’t need any more information than what’s already out there. They need an agent that’s going to get them the BEST result.
- A Better Experience. Give your clients a higher level of service. Treat them like a VIP (e.g., Go beyond just a custom closing gift and give them a pre-listing gift too). You become more valuable to them when you treat them special.
- Having an “Opportunity Excess“. Generate enough business, so you don’t have to give in to cutting your commission out of fear of losing a listing.
If you want to never cut your commission, it starts with your mindset. Believe in your own value and in the quality of the service that you provide.
Full Transcript
All right, this video is going to ruffle some feathers.
Hi there, my name is Kevin Ward, the founder of YesMasters Real Estate Success Training, helping you get more yeses and more successes in your business and in your life. And, today we’re going to talk about how to never cut your commission again. That’s right. You can build a business where you don’t ever have to cut your commission.
Now, this is not a right conversation of right or wrong, or is one better for somebody that cuts their commission is willing to negotiate their commission. Are they inferior to the person who always charges full service commission?
These are all different business models. That’s kind of saying, “Is Walmart less worthy of being successful than Nordstrom, because they sell stuff for cheaper?” No, it’s just a different business model. So, this conversation is really about choosing what kind of a business model do you want to build as a real estate agent? And, if you believe that real estate agents is a noble profession and that you are worthy of your value, please give this video a thumbs up because that helps me. And, it helps you understand the value that you can deliver as a real estate agent.
It all starts with your BELIEF
So, there are three keys to being able to never cut your commission again. But before I even get to those three things, I want to talk about first, a preliminary key. And that is if you want to never cut your commission, it starts right here with your mindset. And, that is that you have to believe in your own value. That you have to believe in the quality of the service that you provide. You’ve got to believe in yourself, you’ve got to believe in your own expertise, your own quality and you’ve got to believe in the value of paying for, shall we say high, end stuff.
Okay because see, I was raised with this idea, look, that when you shop, we were taught to clip coupons, to buy everything on sale. And if it was ever anything that was negotiable, haggle on everything. And, so that’s how I came into real estate. I was kind of the broke shopper. I’m the one that’s always looking for the best deal, looking for the discount. Will you cut your commission? All that kind of… That’s how I would do it, so guess what? I attracted that. And, then I started meeting some people that didn’t think that way and I would get listings, and especially in the nicer homes and the nicer areas. I would get these listings and they wouldn’t even ask about the commission. They just like, “Where do I sign?” They’d sign them like, “You didn’t object to about the 6% commission. I mean, this is an expensive house. That’s a lot of money.”
And I remember one guy in particular, his name was Roy Thomas and he was my first over a million dollar listing. He was a millionaire, he was a business owner and entrepreneur. And, I can remember after I sold his house that helped him buy another house. After less than a year, he had remodeled it. And he’s like, “I just never liked the house, come sell it.” And, we came back and sold it again and I’m literally debating, should I discount the commission, because I mean, they just bought it less than a year ago? And I never said anything about it, and after I’d sold that house for them and they bought another house, we went to lunch. He invited me to lunch at the country club.
So, I went and I remember having this conversation, I’m like, “So, I got a question.” I’m like, “Even after we did all these transactions, you never asked me to discount the commission. Why not?” He said, “Because, I expect you to deliver great service and get me the best results. And, I think you’re worth the money when you do that.” And he said something I’ll never forget, he said, “I make a lot of money so I can pay for the best services and always get the best.” And that stuck with me like, “Okay, here’s a guy, he makes more money than I’ve ever seen before. He owns nicer houses than I ever lived in before, he drives luxury vehicles, his wife is decked out with nice jewelry. Just obviously, they have a great lifestyle, they have a great marriage, you have a great business. They make a lot of money.”
And I’m like, “I like this guy, but I also liked the way he thought.” he was like, “I like to make money so that I can not have to think about how much something costs, and trying to be cheap, and trying to haggle and negotiate.” And I’m like, “Okay, I like this thinking, but I also decided I liked this kind of client.” And, what I discovered was that it wasn’t just the high-end clients. It was just people that there were people out there who simply had no problem paying a quality price for a quality service. They looked at it as an investment. And this is one of the things you got to believe as a real estate agent, that when you are better than everybody else, when you know how to be the best at something, when you’ve developed the skills of how to get a better result, that you are actually worth more. You’re not just a doormat in a warehouse full of doormats which is the way a lot of people look at real estate agents, right.
3 Keys to Never Cut Your Commission Again
So, how do you actually get yourself to a point in your business where you never have to cut your commission again? And, I’m going to give you three things, three steps.
1. Greater expertise. You’ve got to establish, and create and learn to have a greater level of expertise than other real estate agents. How good are you at getting a better quality result for your clients? If you’re working with buyers, are you better than the other agents out there of getting that buyer, the house that they want for the price in terms they want. And especially in this crazy market, when you’re dealing with multiple offer situations all the time. Do you know how to win for your client, and you’re better at it than others? That is expertise, that is actually learning a skill set to help make that happen.
And for listings, do you know how to position them in the market? How to market, how to do elite marketing that actually increases the demand that helps you get better offers. And then once you get those offers, do you know how to negotiate on behalf of your seller to get better terms and a better price without having to give away their equity during inspection contingencies, and appraisal contingencies and all of that? And, those are skills that you can learn to become an expert. Because look, here’s the thing a lot of real estate agents don’t understand is that back in the day, your value as a real estate agent more than anything else was simply that you had access to information that nobody else had access to.
As a real estate agent, you had access to how much homes were actually selling for, got the entire inventory. And if a buyer wanted to see the houses that were for sale, they either could drive every street in town, look for sale signs, or they could call a realtor. And, a realtor was the one who had access to all the data, all the stuff on the market. The stuff that was advertised in the newspaper, and the stuff that wasn’t advertised in the newspaper. The new listings, the old… They had access to information, to market data. To be able to do a market analysis, you needed to have access to the MLS and you didn’t have instant valuations online. Nobody had that, so they needed a realtor for information.
I guess today, information is… There’s an abundance of free, ready information online that almost any buyer or seller can have more information today for free than a skilled real estate agent could have 30 years ago. So, they don’t need you for information anymore. What they need you for is elite marketing skills that can help you increase the demand for a house to get better offers. And, elite negotiating skills that you can use to help get better terms and a better price for your sellers and eliminate contingencies. In other words, you’re better at helping your clients win. Greater expertise and getting greater results. That’s the number one key. Can you actually be worth more than the average real estate agent? And the answer is absolutely, you can. The question is, have you made that commitment?
2. A better experience. It’s creating and delivering a better experience for your clients, so what level of service, what level of experience do you deliver for your clients? Do you deliver a level of service and treat your clients like they’re going to the Four Seasons or like they’re going to Motel 6? Now, just think about it for a minute. If you go to a Four Seasons, you get treated different than if you go to the Motel 6. I know, I’ve been to both. I’ve stayed at Motel 6s back in the day, and I’ve stayed at Four Seasons.
And I know at Four Seasons, not only am I going to get a nicer room, and nicer pillows and nicer everything, but I’m also going to get a better level of experience. I’m going to be treated different. I’m going to be treated different by the staff, I’m going to be treated a bit different with different amenities there. Somebody else is going to carry my bags and guess what? I’m going to pay more for a higher level of experience. So when you create a higher level of experience, a VIP treatment for your clients, you have more value. And, the people that are attracted to that are the people who are more likely to be like Roy Thomas that don’t mind paying for that kind of stuff, okay.
So, just think about it this way, how do I deliver a higher level experience? Better communication, more direct communication. I go above and beyond. Instead of just giving them a closing gift, we also give them a pre-listing gift.
One of my top coaching members, Eva Lin from Pasadena, she has what she calls the WOW! Coordinator. And, the WOW! Coordinator, she’s the one that says, “How do we wow our clients?” So, they make their gifts custom gifts. So they find out, they go into their client’s social media profiles and they research. They like, “What do they like? What are they passionate about?” And, they find out they’re passionate about something. They’re like, “We’re going to get them one of those for a closing gift.” Or, they’re getting them one of those as an anniversary gift for them as a past client.
In fact, I heard her recently talking about how her WOW! Coordinator saw online on Instagram that one of her clients was saying, “I need some bubble wrap, where do I buy bubble wrap?” And so within an hour, Eva’s team, she had sent one of their team members to the store, bought bubble wrap and showed up at the client’s house with a box of bubble wrap. And the client was like, “Wow, how did you know? Can’t believe you guys did that.” It was just a higher level of service and expertise, and they call that their WOW! Coordinator.
So, on move in day when you’ve got a client and they’re moving into their new house, are you going to send them a pizza? Or, are you going to send them a full catered meal? Now, they’re both great and it’s not like one is right and one is wrong. It’s just one is going to be a different level of service. And, whenever you deliver that different higher level of service, people think different about you. They think different about your value, and they like the way you treat them and the way they feel as your client. By the way, they’re probably going to give you more referrals.
And because of that higher level of experience, and this is something that we’ve seen happening with our top coaching members who have taken this approach. Is that literally they now have the video testimonials from past clients who not only say, “This was the best experience, and I have the best results with my agent.” And some tasters are even saying, “And, they actually were more expensive than the previous agent we had, or their commission was higher, but it was absolutely worth it.”
So, now what’s happening is commission can be higher because the value is actually higher. Now, those are the two things that I do to become more valuable. Number one, greater expertise. And, number two is create a better experience.
3. Having an opportunity excess. I need more, I need an excess of business opportunities. I need to be able to generate more leads than I need, because not everybody’s going to stay at the Four Seasons. Not everybody’s going to want to go out and buy the expensive stuff. Some people aren’t going to want to do that. Some people are going to only pay 4%, they’re going to only do discount. I need to have enough business. You want to generate enough business, and have enough people that are wanting to hire you and use you that I’m not put in a position where I have to say, “Oh, I know. Okay, I’ll do it.” And, where you have to give in on the basis of a fear of loss. I’m afraid I’m going to lose the listing. I’m afraid I’m not going to get the deal. I’m afraid I’m going to lose the client.
What you want to do is you want to generate a business that I can stay true to my value, and when somebody says, “Well, somebody else said they’d do it for this, will you do it for this?” You say, “I don’t discount my commission, can I tell you why? Because I don’t have to, because I deliver better results, so I don’t deliver discount results which I’m assuming you don’t want discount results, right? And the reason that people pay me more, and I don’t ever have to discount my commissions is because I always deliver a better result for my clients. Now, if you’re looking for the cheapest guy, if you’re looking for the cheapest agent, I’m probably not your guy. But, if you’re looking for the best results and the best experience, then that’s why people hire me.”
And I can say that knowing that there’s some people going to go like, “Okay, well, I’m not going to do it.” And I can be like, “Okay, that’s fine.” You see, there’s some people that are never going to pay $400,000 for a car. Yes, there are people that pay $400,000, $500,000 to buy a Rolls Royce. But, Rolls Royce knows that not everybody’s going to go out and buy four and $500,000 cars. They have enough business, they don’t need to create a $80,000 or a $40,000 car for somebody. Why? Because, this is what we have. We deliver the best car. We create a high-end product and we charge a high-end price.
And when you have set that value of yourself and you’ve developed the skills, the expertise, and deliver the experience that justifies that level of commission. That’s how you win and have enough business coming in that you generate in our business that I can say no to people that don’t want to pay my price.
Now, here’s the biggest mistake and here’s the thing that I want you to understand, is it’s not just a matter of going like, “Well, I’m going to only charge a full service commission. I’m never going to reduce my commission.” The problem is if you’re trying to charge a Rolls Royce commission, but deliver a used Honda level of service and expertise, don’t do that. Don’t be that person. But when you deliver the best, you can charge the best.
So, what do you think? Let me know your comments, let me know your thoughts. I know I’m probably going to get some haters on this one, but I want to hear what you have to say. Put the comments below, and I will see you on the next video.