Fear vs. Confidence.
It has occurred to me over the past few months, that I as read through social media and all the emails that I get on a daily basis from various coaching sites, that these changes that have been made in our industry have created a lot of fear, and the fear mongering continues.
I want to shift the perspective on this for a moment. One thing that has happened, and is happening, is that this shift is actually creating a more powerful position for both listing and buyers agents.
If you take the perspective that you are now not necessarily bound to the agreement that is in MLS, but the fact that you are setting your own rates and commission directly with a buyer puts you back in control and is forcing us to prove our worth. We get lazy when it comes to commissions. It’s easier to lean on the “industry” and the automatic publishing of commissions within MLS. You take a buyer, you look at a home and you put in a “range” of commission on your buyer agency agreement, meaning you take what you get.
Instead, we are now in control. The fear is that the buyer will balk and say no. That is realistically the fear. We were lazy in the fact that we knew the seller would be paying the commission and we took that for granted. What if we didn’t take this for granted (and now we really can’t) What if every buyer you worked with you charged what you felt was fair. We separate the home sale from our bill. Exactly why we cannot include commissions in the offer to purchase (the buyer can, but that is a different discussion).
If you look at the buyer agency agreement, there is verbiage to collecting retainers, to charge flat fees, to charge flat fees and commissions. Our fee is actually deemed earned once we have performed. Not necessarily at closing. We just allow for that to be the process, because that is what we have learned and accepted - as “industry standard.” Exactly what part of this lawsuit was about. Then we wait for closing, and hope that it closes.
We are terrified that MLS published commissions went away, but now we are actually coming from a position of strength. And this may not be the end of the world as most of social media is screaming at us. We are now not tied to a transaction. Freedom.
If you think back to your hardest buyer that you have worked with. 50 showings to get to a contract, repair requests, inspections, renegotiations, finance issues, 50 more trips to the house, then booking more appointments to look at other potentials because the buyer is getting cold feet, and the list goes on. We even discount our commissions to “make a deal work" You have spent approximately 100 hours on the transaction by the time of closing, and the average deal is making you about 10K. That works out to $100 an hour. My hair stylist makes more than that.
Our industry complains ad nauseam about how much work goes into a transaction and we wear it on our sleeves. We are doing this to ourselves because we have poor boundaries around what we will and will not tolerate and what we are actually getting paid. We make excuses as to why we are killing ourselves to compete.
How do we compete? We get really freaking good at our jobs. We learn to communicate effectively. We follow up and we know our business. We know the forms, we educate ourselves and we show up at our best - EVERY SINGLE TIME. We keep a consistent schedule. We raise the bar. All the time. We stop at nothing less than excellence.
Then we can charge what we know we are worth. And the fear of the commission becomes less important. The knowledge of our own credibility and worth takes the place of the fear.
Change the perspective - own your business. Earn your business. Charge your clients. They do not expect you to work for free, and will respect the boundaries that you put into place. If they don’t, then find the client that will.