Negotiating on your own behalf

When Shad Bogany meets with a seller for the first time, he has a frank discussion about commissions. He acknowledges that some brokers and agents are quick to reduce their commission in exchange for the listing. Others set their commission and stick with it, confident that the service they provide is worth the compensation they receive. He says ERA Bogany Properties in Houston is the latter and has stuck to its guns even as competition from non-traditional brokers has heated up around it.

Wilona Dyson, a broker-associate with Keller Williams The Woodlands, explains to sellers that, generally, agents work with no compensation until the transaction is closed in a satisfactory manner. "As listing agents we’re banking on the fact that the home will indeed sell during the listing period," says Dyson, "and that if it doesn’t sell, we don’t even get compensated for our time and expense."

To combat the perception that real estate agents are fat cats living off of big commission checks, Dyson also breaks down how commission splits work and how her status as an independent contractor requires her to pay her own expenses.

"By far the most valuable time agents will spend on an hourly basis is negotiating their commissions," says Jim Gillespie, owner of RealEstateSalesCoach.com in Temecula, California. To ensure that the negotiating process works in their favor, Gillespie advises agents to differentiate themselves in the marketplace on their knowledge, quality of service, and support offered to the seller. And remember that the agent who is quick to take a lower cut isn’t always going to be favorable in the clients’ eyes.

"It’s typical for a top attorney to charge $200 to $500 an hour, but if someone ran up to you and offered to handle your litigation for $50 an hour, you’d assume he or she was a pretty bad attorney," says Gillespie. "It works the same way in real estate."

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.