Thinking Outside the Box
I love hearing stories like this one and enjoy working with real estate professionals who can think outside the box. It’s pretty common knowledge that real estate sales commissions are negotiable, but most consumers don’t realize that many top performing real estate agents are quick to reduce their commissions when it comes to making a deal happen. There are listing and selling agents who will agree to reduce their commission to resolve a repair issue or to make up the difference if a buyer or seller is short on funds.
Recently we participated in a closing where the listing agent wasn’t paid a commission at all. Being curious, I asked her if she was related to the seller and if that was the reason she wasn’t charging a commission.
She was not related to the sellers. She explained that if she would have charged a commission, her sellers would not have had enough cash available to sell their house and purchase a new one. So she suggested that the sellers offer a 2.5% commission to the agent that brought them a qualified buyer and she would forego a commission on the sale of their house, but earn a commission when she helped them find a new house.
These particular sellers had interviewed three other real estate agents, who told them that they’d either need to wait for the value of the house they needed to sell to increase or save more money to complete the transaction. The agent that they ultimately hired figured out a way to make it happen where it was a win-win situation for everyone.
The house sold for $293,000 and the sellers needed to bring a little more than $6,000 to closing to cover the shortfall between the sale price and their mortgage payoff plus closing costs. The listing agent, by waiving the commission, gave the sellers the flexibility to sell their house and in turn buy a new house for $475,000 where she earned a 3% commission.
I’m always amazed by those in our industry who walk away from an opportunity to earn a paycheck because they refuse to “leave money on the table.” My philosophy has always been that a slice of the pie is always better than no pie at all.
This was not only a smart business decision, but the agent told me that the sellers had already referred three other clients as a result of her flexibility. By placing her clients best interests above her own, she not only earned a commission of $14,250, but she has a client for life who will continue referring her business that will earn her commissions that will far surpass what she supposedly “left on the table.”
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