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What to Say When An Owner Wants You to Reduce Your Commercial Real Estate Commission

By Jim Gillespie | September 25, 2013

See if you’ve ever experienced this one…You’re getting closer to successfully negotiating a sale transaction, the buyer and the seller are getting closer together on the price, but then they begin to reach an impasse…and they’re still thousands of dollars apart on the price. Then your seller turns to you and asks you to reduce your commission so that everyone can now move forward and close the deal.

There are, unfortunately, a lot of brokers out there who will just cave-in in these situations, feeling a sense of panic in wanting to do whatever it takes to just close the transaction, and get paid a commission.

Don’t be one of those brokers!

Here’s something you can say to your owners in these situations:

"I’m willing to reduce my commission in the exact same percentage that you’ll be doing when accepting the buyer’s price. The buyer is offering you just 5% less than your asking price, which is the best price that any buyer has been willing to pay in this market. When you accept this price you’re receiving just 5% less than the asking price, and as a result, my commission has already been reduced by a full five per cent, too. Therefore, we’re both reducing the amount of money we’ll be receiving by 5%…which is fair and reasonable to both of us."

If your owner then persists in still trying to get you to reduce your commission, here is a reframe that you can then utilize:

"When you agreed to have me begin marketing your property for you, we agreed that a 5% commission would be fair and reasonable. Now we’ve procured a buyer who is offering you the highest price that we’ve seen, and you’re offering to reduce your asking price by 5%. But you want me to reduce my commission by a full 40%. Please explain to me why this is fair and reasonable."

What you want to accomplish with this reframe is getting the owner to recognize that they’re just being greedy in what they’re asking you to do. Many people in this situation, even though they may definitely be greedy, won’t want it to become so obvious to you. Then again, there will be owners who don’t care if it’s obvious to you that they’re being greedy…they just want your money.

If they still insist on you reducing your commission further, continue to focus on the vast difference between the 5% reduction they’ll be receiving from their asking price, and the 40% reduction that they want you to take in your commission. In doing so, because of the huge disparity between these two percentages, you’ll maximize the probability that you’ll be successfully closing the transaction, and walking away with a greater amount of commission in your pocket.

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