Feb 16, 2023 11 min to read
When transaction numbers drop, fees must go up. It’s that simple. With your fees being so fundamental to both success and survival, here are seven key ways to negotiate a higher commission with your clients:
- Understand your client’s needs
To negotiate a higher fee, you first need to understand your client’s needs and preferences. It’s incredibly difficult to justify even a small percent more than your competitors if you just jump straight into the same spiel as they do.Try focusing on the move first, rather than the sale. Ask them about the type of property they are looking for, their budget, and their desired location (and then use Homesearch to show them what you can help them find and buy that may not yet be on Rightmove).Example: If you’re at a valuation pitching to a potential seller, you can ask them about their onward purchase before you talk about asking price, comparables or even you and your agency (and your fees). Go deep on what they see as their preferred neighbourhoods, the number of bedrooms and bathrooms they need, and any other features that are important to them. This will help you narrow down the search and find properties that meet their needs using Homesearch and will show you care more about their overall experience and move than just winning their instruction and chalking it up as a number on your sales board.
- Emphasise the value you bring
As an estate agent, you can emphasise the value you bring to your clients by explaining how you can help them buy or sell a property more quickly and at a better price. Sounds simple, but so few agents take the time (or lack the skill) to really (and simply) explain this to their potential clients.For example, you can highlight your experience and network of branches or key contacts, which can help you find the perfect property for a buyer or the right buyer for a property.Another example, if you’re selling a property, you can emphasise how you can help the seller stage the home to make it more attractive to buyers.And, you can also explain how you can market the property outside of just Rightmove, Zoopla and On The Market to reach a wider, more emotional, audience to attract a greater number of enquiries and viewings which will then help you negotiate the best possible price.
- Use data to back up your claims:
Using data to support your negotiation is so powerful. You can use market reports and statistics from Homesearch to show your clients how your expertise and knowledge of the market can help them achieve their goals.Example: If you’re working with a seller, you can use market reports to show them how properties in their area are selling and at what price point. You can also share data on how long properties are staying on the market and explain how you can help them sell their property more quickly.
- Highlight your experience:
Highlighting your experience and expertise can help build trust with your clients*. You can explain your background, credentials, and any awards or recognition you have received.Example: You can explain how many years you have been working in estate agency, how many properties you have sold, and any specialised training or certifications you have received and what industry groups you are a part of.This will show your clients that you are an expert in your field and can help them achieve their goals.
*just don’t only rely on a PIE chart 😉
- Be confident:
Being confident in your negotiation can help build trust with your clients. Show your clients that you believe in your ability to help them buy or sell a property.Example: Walk your next clients through previous negotiations. Explain to them how the negotiations started between each party, how you were able to help them find common ground which then built enough trust for you to get more from the buyers over and over again until their offer was past the point that was deemed acceptable by your sellers.Telling stories of many offers well above asking price may come across as arrogant rather than confident, but showing them your process for helping both parties compromise (but in the seller’s favour) will leave them confident you have the skills needed to navigate a tougher market.
- Be flexible:
It’s always better to win the instruction than not. And it’s always better to get paid any fee than none.That said, only under a few conditions. Before you consider being flexible on your set fees, make sure you can answer most, if not all of, these questions with a resounding (and we mean resounding) yes.Do they have to sell?
Have they found a home to move to?
Do they have reasonable price expectations?
Will they contribute to the wider marketing campaigns?
Do they have a circle of friends they could refer you to?If you can tick these boxes, then there’s a better chance of them moving on soon, meaning you could be more inclined to offer fee flexibility.
- Don’t be afraid to walk away:
Sellers can be unreasonable, that’s a fact. If most of the answers to the questions above are ‘no’s’ and the fee they want you to charge is not acceptable, don’t be afraid to walk away. Chances are the other agent won’t sell it either.It’s better to protect your business than to accept unfavourable terms. And it’s better to let another agent work for free and condition that seller to the reality of the market so that you have more of a chance of picking them back up second time around.
To bring it all together, by demonstrating your expertise, understanding your client’s needs, and being willing to adjust your services or payment structure, you can build trust and reach a mutually beneficial agreement. However, if a client is unwilling to agree to a fair commission rate, it may be better to walk away and focus on clients who value your expertise.