The Problem with Commissions

When closing time arrives, sellers basically receive, right there on the closing papers, a bill for the agent’s services. By the time they see that big 1-2 percent figure staring them in the face, chances are they’ve already forgotten the risk you took with your time and money to market their home. When they see how much the commission slices into their home proceeds, they’ve likely forgotten about many of the services you provided. Not to mention they never even knew about the other countless efforts you provided — calls to lawyers, builders, other agents, appraisers, and all the other partners involved to achieve the sale, or purchase, of the clients’ home. Since most agents do little after the sale, the clients’ parting memory is how much you got paid, which isn’t exactly a great way to launch a long-term relationship.

So be aware of the inherent challenges in commission structure and to make doubly sure that your last contact with your clients isn’t on the day you get paid.