It's not what we do that creates's how we do it!

Real Estate Broker Owner with Bryant Tutas-Tutas Towne Realty, Inc BK607690

 Hi folks. This post is an edited version of an article I wrote back in November of 2006. The comment thread on the original post is, in my opinion, one of the best in ActiveRain history. The comment thread involves consumers and members of AR heavily debating "What do you do to justify your high commission?" ActiveRain members were up to the challenge and made me very proud to be a part of this community. It was awesome!!! If you haven't read it before take the time to do so. You'll get to meet the infamous Candybags!!!

Anyway, I feel this article and the question asked is even more relevant today.

So let me ask it What do you do, to sell a property, that justifies receiving a x% commission? Why would the consumer want to hire you and pay your fee, when they can find all the information they need on the Internet (disintermediation)? What can you do to justify your commission?

Well folks I am here to tell you, you best be prepared to answer this question. And you best have a better answer prepared than your 25 step marketing plan and access to the MLS. This will not cut it in this day of disintermediation and discount, web based Real Estate agencies. If all you can bring to the table is your marketing plan you will find yourself either out of business or drastically reducing your commission to be able to compete in this market.

So, what do we do? Well, here's what I do. I build value in something that the consumer cannot access over the Internet. "Broker Bryant, that's pretty vague, can you expand upon that?" Of course. I thought you would never ask.

First, all people want to feel good about themselves and their decisions. You can provide that. You can help people decipher all the information that they have available. You can help them apply this information to their situation. Together, you and the consumer can come up with a game plan that will help solve their problem. You can listen to what their concerns and needs are and then fill them. Quit selling and just listen. You can be a trusted advisor.

Secondly, you can be a calming force. Selling or purchasing a home can be one of the most stressful things a person ever goes through. You can remain calm and help them through this. This can be achieved by constant communication and by constantly being there for them when they need to be reminded of why they are selling or buying. When the going gets tough, you can be there for them. You can let them vent their frustrations, on you, without taking offense. When they are all done, you can get them to return their focus, on the end result. Leave your emotions at home. It's not about's about them.

Thirdly, you can be their friend. You can have honest and sincere, care and concern about their situation. You can lead them down the right path without placing your commission in first position. You can make them and their situation feel important to you. This cannot be faked. It must be genuine care and concern. Folks can tell the difference. Again, listen. Be receptive to what they are telling you. Then respond honestly and with conviction.

My point here, is to get you to understand that folks' emotional needs cannot be satisfied over the Internet. As Realtors, we need to position ourselves, to be the one person, that will take the time to make sure that their emotional needs are met. If you can achieve this, I can assure you, that your business will take off and your services will be in high demand. And the consumer will be more than willing to pay the price for this kind of service. Quit trying to sell them something they can get over the Internet for less money.

The Internet CAN provide the data and tools needed to buy and sell real estate but it CAN'T provide the emotional support that people need. It's not what we do that creates value, it's how we do it.

So that's it. Broker Bryant's crash course on overcoming disintermediation. Did I make you feel good? Did I give you a solution to the problem? Did I present it in a calm and informative manner?

So, what do you do to justify your high commission?

Sell Poinciana Real Estate Poinciana Real Estate Poinciana Real Estate Poinciana Real Estate Agent

Copyright © 2008 | All Rights Reserved

Bryant Tutas
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
***The content of this blog is solely my opinion*** 


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Comments 67 New Comment

Anonymous #64

"make sure you and the agent know what your expectations our for each other.  And ask your agent to give you a list of what he/she plans on doing to sell your home.  That way you know up front you can make sure that your agent does what he/she promises"

I don't think this is very helpful in choosing an agent. I've spoken to lots of agents and they basically all say the same thing about how they expect to move a property.

I'm looking for an agent to add value to my side of a deal. A chimp could sell my house today for $350k,  but what I want is $400k. What I'm paying the agent for is that extra $50k.... the problem with the system is that the chimp would earn a commission of $17,500 and the agent would earn $20,000. It's not a good business model to be paid $2500 more than a chimp on a real estate deal.

A better system for a house like is to have an agent get 0% on the first $350,000 of the sale, but 50% of every dollar over $350,000. More complicated, but at least the difference would be chimp get s$0 and a good agent gets $25,000 on $400k sale.

March 17, 2008 10:29 AM
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc

RRsafety, I have to agree with you that it's not what they say, it's how they perform, that matters. If it were me I would want to see a list of their recent sales in my area. Not only do they have to be able to sell houses but they have to be able to do it in your area. Check their sales stats and compare listing prices to sold prices and also see how the sold prices compare to other homes that have been selling in your area.

I do want to mention though that no matter how good they are, a REALTOR(R) will not be able to sell a house for more than it's worth. Pricing is what sells a property no matter how extensive the marketing is. That's fact. Especially in this market where the buyer has many homes to choose from.

The reality is that "what you want" has nothing to do with the value.

Look at this way. If you have a visa card with a $20,000 limit and you "want" to buy something on it for $25,000, you out of luck. The card isn't just going to miraculously be "worth" $25,000. It is what it is. Your want will not affect the value of the card in anyway. Make sense?

March 17, 2008 02:02 PM
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bob Mitchell (NMLS#1046286)
Bank of England (NMLS#418481)

Being a "discounter" I thought you guys would appreciate my take on these things!  Frankly, I think that commissions got out of hand.  The basic idea of charging "X" percent across the board on homes just didn't make sense to me.  Why should it cost a home seller 3 times as much to sell a $300,000 home as it does a $100,000 home?  Is there 3 times as much work involved?  Is there anything that you do to sell the more expensive home that you don't do for the lessor expensive home and if so, how much value does that add to the transaction.

The truth of the matter is that it's generally easier to sell the more expensive home because the buyers tend to be better qualified and in reality there is only so much that we as agents can do to sell a home.  If the home is priced right (rrsafety, a listed home DOES generally bring more money than a home that isn't listed because it's exposed to a much broader market and the agent does bring value to the transaction for all of the other services that they perform - as Bryant pointed out in his post) and is properly exposed to the market it will sell.

The funny thing about being in my position is that I have to "sell" my program against what I refer to as "no-service" companies (MLS Only companies) all the time.  In order to do so, I have the seller do a Ben Franklin test where they draw a line down the middle of a piece of paper and list out the advantages of each possibility on one side or the other.

The "no-service" company gets the nod on cost...I can't argue with only paying $299.00 to get put on my local MLS...that's a hell of a deal at first glance....but from that point on it's all me....

On an average transaction I'm usually a couple of grand more expensive than the MLS only companies, but I field the telephone that worth the $2,000 by itself?  Nah, probably not, but it is worth something for most consumers who have jobs and other responsibilities.

I show the that worth the extra $2,000?  Again, by itself, maybe not...but I'm a somewhat disinterested third party who, through years of sales and communication training, can ask the hard questions and get real answers as to what the customer's objections really are.  I've had people willing to walk on a house that met all of their criteria because the dining room was painted a weird color!  In short, I as a professional real estate agent am better able to ascertain what the customer's objections are and to over-come them whereas on their own, a seller might have more difficulty doing this.

I help in contract negotiations....who hasn't had a seller dig their heels in over $500.00 on a $400,000 or more purchase?  Part of my job is to sometimes hold your sometimes pat you on the back...or to sometimes give you a little bit of a shove...Is this worth the extra $2,000?  You better believe it is!  If you don't believe me, talk to a FSBO that walked from a deal over something trivial like $500.00 only to sit on the house for an extra 3 or 4 months!

My list goes on, but I hope that you see my point.  If you're a traditional agent and you have to compete against me, it might come down to your sales ability to be able to convince the seller that you're worth the additional money that you charge over me.  It happens all the time.

Bryant, excellent post!


Bob Mitchell

ValueList Real Estate Services, Inc.   

March 18, 2008 11:52 AM
Bryant Tutas
Broker/REALTOR, Tutas Towne Realty, Inc
Bryant Tutas-Tutas Towne Realty, Inc
Great comment Bob. Wouldn't it be interesting if we did have the opportunity to compete for a listing? I think I could take you out :) But hey I think that about everybody. It would be interesting though.
March 18, 2008 05:24 PM
Ben Myers
Broker, GRI, SRES, Boise, Idaho
Rocky Mountain Real Estate
I read a great quote somewhere the other day that is perfect for this debate.  "Only in the absence of value does price become an issue."  I've heard it from a few others in this thread.  If you are consistently being asked to justify your commission (value), you might take a look at how you are doing your business, and what you can do to qwell the concerns of the clients asking you to justify your commission.  The best agents don't have to justify commissions, just like the best restaurants don't need to offer buy one get one free, and the best doctors and lawyers don't have empty offices.
March 27, 2008 07:11 PM

Bryant Tutas

Broker/REALTOR, Tutas Towne Realty, Inc
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