Are your agents cutting their commissions and leaving money on the table? It’s a pretty common scenario in today’s competitive real estate market for agents to make concessions in their commission amounts to get a deal at any cost. But what is the real cost to the agent, the brokerage and everyone’s pocket book?
In today’s ultra competitive market, every agent is trying to stand out and differentiate themselves. But cutting commissions doesn’t necessarily show anything other than a willingness to give away your value as an agent. Instead of offering to cut commissions to win a deal, it’s important for agents to understand how to demonstrate their value in the services they provide to their clients.
As a broker, it’s important to know which agents are successful at selling their value and which ones struggle and then leverage those successful agents and share that knowledge with struggling agents to teach them how to sell their value to a client and get a full commission on a deal. When you have agents who are cutting commissions, word can spread, and while everyone likes a deal, it can also be construed that your brokerage doesn’t provide a high level of service and isn’t suitable for consumers who need an experienced agent or team to guide them through the buying or selling process.
The first step in righting the ship is to know your numbers. Brokerages who use a system like BrokerSumo, can easily track their average agents commission for listing and selling deals compared to what their expectation is. Once you have this data it’s easy to see which agents are having issues and which agents are excelling. Check out this example taken from BrokerSumo below. The expectation for listings is 3.25%. I can easily see that most of the agents are getting less than 3.25% on their listings and I can see how much in lost gross commission dollars they left on the table by not getting a 3.25% listing commission.
So what can you do as a broker to right the ship for your struggling agents? Putting a mentoring program in place can add thousands of dollars to your bottom line and it can also help the value of your brand by boosting the level of service among all your agents. It’s also a great recruiting tool for new agents looking the learn the business from successful agents. These simple steps create a culture of success and partnership within your brokerage giving you and your agents more opportunities for success.
Sign up today to start your free 14-day trial. BrokerSumo was designed for real estate brokerages that need an easier way to manage their office and their financials.