Will you lower your commission?

June 01, 2022

Before You Negotiate Your Commission

Remember: Commission negotiations should only occur with your broker’s knowledge and consent. If a commission negotiation comes up between a sales agent and client, the agent should tell the client that all negotiations are subject to the broker’s approval.

It can be tricky when a client or prospective client asks you to lower your commission. You may feel upset and want to start and end the conversation with a firm no. But a longer discussion may be required. Here are some tips to consider:

Ask Why and Listen

When clients or prospects ask about lowering your commission, it may feel like they’re undervaluing your worth as an agent, but they may be uneducated about the process. They might be interested in paying you a lower commission for reasons completely unrelated to the amount and quality of your work in the transaction. Before getting worked up, really listen to what the person is saying. Anyone with questions or apprehensions wants to feel heard in order to make the best decision possible. If you keep your composure and listen with an open mind, you may be surprised at the success of the conversation.

Address Concerns

After you’ve listened to the person’s thoughts, address what you heard—any concerns or questions. You may want to detail the monetary side of transaction or explain your role and the full list of services you provide. (You can find many resources to share at competition.realtor, a website from NAR that explains the value REALTORS® bring to clients, how commissions work, how consumers benefit from different business models, the value of the MLS, and more.) The person may still want you to lower your commission but will appreciate your effort to really listen and answer questions.

Show Your Worth

If the seller is still apprehensive about paying your full commission, show the proof of your success. Provide testimonials and statistics that demonstrate how you achieve results for your clients, especially any that exceed averages in your area.

Negotiate or Say No

If you have a strong desire to work with this client, you can negotiate. For example, you and your client may agree that you will provide fewer services than you usually do. However, be sure to keep in mind that the minimum-services provisions of The Real Estate License Act impose certain requirements on all brokers representing a party regarding client communications and negotiations. At a minimum, brokers must inform their clients if they receive material information related to the transaction, answer their clients’ questions, and present any offer to or from their clients. Just remember, when a client or prospect asks if you will take less compensation, you can always say no.

Sellers and commission negotiations

44% Real estate agent-initiated discussion of compensation

16% Client brought up the topic and the real estate agent was able and willing to negotiate commission or fee

3% Client brought up the topic and the real estate agent was unwilling or unable to negotiate the commission or fee

22% Client did know commissions and fees could be negotiated but did not bring up the topic

16% Client did not know commissions and fees could be negotiated

Source: 2021 Profile of Texas Homebuyers and Sellers

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