In an extremely competitive market, it's not a smart move to say, I'll never cut a comission.  Well, it's not smart if you intend to get certain business.  Let's face it, there is some business out there that we are better off NOT having regardless of the comission!  

I read the REALTOR® magazine and some of it was good and some of it was pretty much hogwash scare tactics.

For example, I just don't buy the "If I accept a lower commission, I'll have fewer marketing dollars to promote your home--not a good plan when days on the market are longer now than in past years".  The public could give a flying leap about our marketing costs.  They are OUR costs of doing business.  So to use that line is like walmart telling you about their shipping costs going up due to fuel prices...

One of the things I am reminded of over and over is that consumers may ask us to cut commissions because they really are not aware of all of the value added services we provide.

I think that one of our main responsibilities is to educate the consumer as to what is involved in a real estate transaction from A-Z.

I have found that consumers respond differently when they are presented with a written breakdown of what we do - both the functionary and fiduciary.

Just my .02.

Try this.  It works WONDERS for me.

"I could take a lower commission, and there are some agents would.  They need signs in yards so bad they will tell you than can sell for top dollar while charging bottom dollar.  But then, the truth is that they would not have the marketing dollars to do a good job, and they could not pay the buyer agent enough to attract business.  So your house will be just thrown on the MLS and will look like all the other houses.  With my 8% listing, we pay the buyer agent 4%. So think of it this way.  The extra percent helps pay for better marketing, to make the needle come up out of the haystack and be more visible.  Then the 4% buyer agent fee puts a NEON Spotlight on your house.  With more marketing, and a neon spotlight program, we can charge 2-3% more for your house, making my fee actually less than the other guy's fee because you get more money in your pocket".  So, which would you rather your house to be? A Needle buried in a haystack, or a Needle with a NEON SPOTLIGHT on it and a few extra dollars in your pocket? When they choose spotlight and dollars, then I say.. Good, I thought you were smart enough to see it that way!  

Then I say, (as Brian Buffini says) - "Press hard... there's four copies"  :)

I was going to post a link to a post in my blog that deals with this issue, but the link keeps disappearing. So instead a brief explanation, my broker passed out an article that essentially said "seller beware - if your agent is not able to sell you on his commission, you have to question his ability to negotiate top dollar for your home?"

Certainly its something that would get me thinking if I was the seller and the agent tossed it out there.

Right on Lonn!!!!  Great script and is one I use most of the time.  I don't always get the listing because I won't cut, but then that's ok.  I would rather walk away than take a cut.  Press hard, there are four copies.....

The key to me is to "Negotiate."  When I am ask to reduce my comission I say sure. I then add here are the services I provide what would like me to leave out.  Most Seller's smile and agree to my originally stated comission. I have had a few who took me up on the offer and lined out items they did not want me to do.

I am okay with providing the service the client wants to pay for as long as it meets the minimum standards required by Texas Real Estate Commission who I am licensed under.  I do tell the Seller that any reduction in comission is coming out of my pocket and that is why I have to reduce the services I provide for them.

If they would like for me to add a service that is negotiable too...Up from my original commission!

All of you, some more than others, have excellent points.  I agree with detailing what we do, Laurie, and Lonn and James... the commission arguments are also the ones I use, basically.  I have demonstrated in my marketing plan exactly what I do and why.  I have a seller right now looking for someone who wants to pay 5%.  I bet that I get her up to 8%.  One of the reasons is that I show the seller what their competition is doing to sell in Atlanta... offering 4% to 5% to the selling agent.  A 3% to selling agent is nothing now if you want the agent's attention.  AND, then there are new homes offering up to 5%.  I take printouts of these listings to show the sellers, and pretty soon, it is "me, too, I want to sell."  I'll let you know about my 'low-ball commission payer.'

I agree with all of you that say it is best not to cut a commission however, in Michigan we have so many homes on the market, and our general economy is the worst in the U.S.  The client knows it is a buyers market, and as mentioned, they don't care how much it costs you to advertise, they want it sold for the least amount of commission possible.  That is an interesting thought though, to look up properties that have sold and see what the commissions were; I am thinking you are right, that the higher the co-op the better chance it will sell, even here in Michigan.

Carol

Carol:

The higher commission actually works better and is easier to get in a Buyer Market.

Ask any builder... In a hot seller market builders think they don't need Realtors.

In a buyers market, the first thing a builder does, besides throw in appliances, is up the realtor commission....  

Take some printouts showing builders offering Buyer Agent Bonuses.  Your sellers are competing against this.  The need to "DRESS" their listing for the party....  or not go at all...

Thanks Lonn, I needed that! So many times I have sellers ask me to give them a break on the commission. We have a discount broker doing business nearby and they say 'he told me that he would list it for__, maybe I should go to him'.  I usually remind them that I am a full time, full service realtor®, and getting their home sold is a full time job, they wouldn't expect to be paid at a bargain rate for the hard work they put into their work and neither do I'.  I've only had one person turn me down so far.  I have only been in the business since Oct 05, so I am soaking up as much as possible!

Carol