Holding The Line On The Commission Dollars You Deserve 

the Institute All, Become a Luxury Professional, Luxury Home Marketing Tips, Luxury Home Selling Tips 1 Comment

Most sellers know more than one real estate agent, and most will interview multiple agents before making a selection. It also goes without saying that most will, at some point, ask for some type of commission discount. 

We all know that commission is negotiable by law, and that we cannot price fix. However, this does not mean you don’t have the right to make a business decision on what rate of commission makes sense for your business. After all, when you list a property you absorb a lot of risk. You agree to spend money, time, and energy without a guarantee of payment, and you risk legal liability and responsibilities that go along with a complex real estate transaction. Therefore, you deserve to be well compensated well rewarded for your services, experience, expertise and the results you deliver, don’t you? 

The First Step… 

The top agents I coach all agree that an outstanding listing presentation can be the first step to holding the line on a reasonable rate of commission. This is due to the fact that the listing presentation gives you a chance to demonstrate the services you will provide, as well as to showcase your success stories as proof that you are worth every penny of what you are charging. 

I would strongly suggest that even if you think it’s a lay-down-listing because it’s a friend or past client, you should still do your full presentation to ensure they see the value in paying you a fair percentage. 

Next Steps… 

The next step to earn what you deserve is to find two or three outstanding ways to handle the commission objection. You will want to drill, practice, and rehearse so you are incredibly smooth and confident fearless. 

The third, and perhaps easiest, of all steps to earn what you deserve is this: Simply stop volunteering to take a cut. In fact, never again volunteer. At least make them ask you, and then do your best to overcome the objection. At this point, you will then make a business decision as to the amount you can accept and still be able to provide all of the valuable services they need. 

Cut-Rate Companies 

We all know that there are a lot of cut-rate and flat rate options out there for them, and yet a very small percentage of sellers list with these cut-rate companies. Why? Because they know they need more. 

The beauty of the higher-end price point is that it may be less impacted by commission disruption. The savvy sellers in these higher price points may be more likely to understand the value of quality marketing and experience, and therefore be willing to pay more for five-star service. 

Out of 100 consumers, 70 will pay more for perceived value, which of course means 30 will not. This means that you may have to turn down some listings because it just will not make good financial sense to take those if they do not see the value in what you bring to the table. 

Know Your Value 

I would also suggest that you calculate your exact cost of time, money, and staff time per listing. Once you have your number, you will know you must earn at least that much in commission in order to break even. Of course, you don’t just want to break even; you need to make a profit. 

Sellers don’t care that we would like to earn more, or need more to pay our marketing bills and expenses., or that “our broker won’t let us cut.” All they care about is how the commission will impact them. 

Remind them that you need to be able to spend what needs to be spent to market the home, and also that putting the right commission on the listing is, in a sense, a marketing carrot. Additionally, you can remind them that no commission is paid until an offer that they find acceptable is presented and the transaction closes. So at the listing table, no money is exchanging hands at all, and it can still be negotiated at the time of an offer if there is a breakdown in the negotiations. 

Remind them too, that if you cannot demonstrate that you are strong in defending your own commission, then how could you be strong in protecting their money? Any desperate agent that will volunteer and do it for a small fee will not likely be the strong negotiator they need. 

Most importantly, you must be confident in your ability and strong in your conviction that you are worth the fee you are asking. Use your reviews and testimonials to prove you deliver value and worth to your sellers and therefore are worth the investment  

If you want more guidance on how to grow your luxury real estate practice, you can learn more about the Institute’s training options here.


  1. This is a great article. I’d like to see an article when working for the buyer and the sellers or listing agent on a luxury home post a 1/2% less commission than I am willing to take. I do a lot of preparation when looking for that right beach home and I was shocked when the buyers I have represented for the 2nd time did not see the need to pay me the difference at closing. They always tell me how awesome I am and what a great job I do in sourcing information on the area, home and inspections. When I told them the sellers is only paying 2.5 % and I have a policy to not work for less than 3% they did not feel obligated to pay the difference. I had a signed buyer agency agreement with 3% in the agreement, which I could exercise, but I value their friendship and repeat business. I am in my 30th year of my Real Estate career and never until recently in the higher price ranges, ran into this. Can you make a suggestion? Thank you I enjoy reading these articles. Pat

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