If you think you can dismiss this article and go on to other things, read this short article at Realtor.org about commissions and sellers. In a survey of more than 9000 home sellers, here's a partial quote of the results: "...the survey shows that sellers who paid the full commission were more likely to express regrets about the transaction process, with approximately 33 percent believing they should have aggressively negotiated the fee."
The problem lies in our desire to keep things the way they are, forcing our customers to negotiate if they want a better deal. Most will not do this, as it is uncomfortable to them. They, as in the survey, will indicate later that they are not happy, and that they should have negotiated. However, they don't choose to do it at the time. We take advantage of their dislike of the negotiation process to continue to charge "full service" commissions.
This needs to stop, but most real estate professionals will not agree. So, why don't you get out far ahead of the pack, and begin to offer something that bridges the gap between the full service-full price commission and haggling at the flea market. Seeing the survey results, it's only logical to assume that the 33% who felt that they should have negotiated will be searching for an alternative the next time they want to sell their home. Be there with the answer...tiered services.
If you want to argue that print, TV and radio advertising together are NOT a huge budget item for most brokerages, then I'm wasting my time writing this for you. The fact is that they are gigantic budget items. Every client absorbs their share of those costs, even if they price their home aggressively, and it goes under contract weeks before it is actually displayed in any of this high dollar marketing.
Wouldn't it be a logical alternative to offer Internet-only marketing, with no print, TV or radio at a reduced commission rate? If you truly believe that the Internet and the MLS sell most of the homes out there today, then offering a reduced commission just for those services is not only logical, it's the only ethical thing to do!
You can probably come up with other services that you include in a listing agreement that might be categorized as top-level and full service. These can be offered for full service rates, while we can tailor offerings for those who would like to spend less and still get effective marketing and representation.
Think about it.
