A Lesson Learned in my Real Estate Career
I am thankful to have been in this business for over a decade, and I still truly enjoy what I do for a living. Although I don't really consider myself a graduate of the School of Hard Knocks, many of the lessons that I have come away with during my career have been difficult to swallow. Thankfully, I try to take these tough times and use them going forward, both in my own transactions and as I train other agents who work with me.
I have come to realize that any client who asks for part of my commission in the beginning of the process is bound to cause problems later. In fact, I have rarely seen a client ask for money who hasn't been among the more difficult people to work with.
This is a good barometer for me - maybe it will work for you, too. Here is but one example:
Once, about six years ago, I had a couple who spent a good deal of time looking at homes with me. The husband once called me during a very rare excursion of mine to the golf course, and wanted me to meet him to write up a contract with a builder. Since I was honestly getting a bit tired of working with them, I met him as soon as I was finished, and we spent the evening getting the details worked out. About three days later, he decided to cancel the contract, and the builder gave him back his deposit.
We continued to look at various builders and their spec homes, and they soon found another to-be-built home in Round Rock that looked to be perfect. My business partner had to meet them since I was working on this deal at the time. He called me as I was headed home, "Jason, you probably want to come over here. They are asking for some of the commission." WHAT? I showed up and the client was sitting in the back bedroom of the model home. He said, "I want to know what you have done to earn your commission." The first thing out of my mouth was, "You must be joking."
Since I don't want to lump this particular buyer in with a particular group, I won't tell you where he was from, but suffice it to say that he was from another country. Perhaps he was taught that this was a good negotiating tactic (since this was actually what he told me later), but all that he succeeded in doing was ticking me off. I explained to him that I was already giving part of the commission to his company to help with his closing costs (this was part of a relocation account, and we had to pay 30% to the relo company). Thankfully, the builder was offering a bonus of 1% in this case, so I let him have that in order to get the deal done. The sales rep explained that he would need a $500 non-refundable deposit, and we were good to go.
Well....I got a call about a week later from the salesperson, who explained that my buyer wanted to cancel (again) and he asked me if I wanted him to fight and try to get their money back. I told him that I honestly thought that everything was very clear when they signed, and that I would certainly understand if they lost the $500, which they did.
Shortly after that, the buyers decided to dramatically drop their price range, from around $250k to about $130k. I told them that I would not be willing to give them any commission breaks once they walked away from the other deal, since that was a special situation.
They eventually found a home and they closed, but not without a ridiculous amount of tooth pulling. I won't bore you with more details, but this is one example of a client who wanted something for nothing and I should have run the other way.
I have given discounts to friends, past clients, and even to buyers who are obtaining several properties at once. The difference is who is offering this money. If it is being requested of me, I find that things will be rocky and difficult. This is like a canary in a coalmine now. If a client starts out by asking if I will discount my commission, I will likely not work with them, as I have been burned repeatedly. I hope this helps someone else reading this post to put things in perspective.
Thanks for reading!