Need Help Defending Your Commission?

In this world of discounted and/or flat fee brokerages, some buyers and sellers may quibble about agent commission fees.

Worry and apologize not. Your knowledge about and experience in the process of buying and selling homes, local markets, negotiation strategies, etc. stand you in good stead. In fact, 86% of all buyers and sellers rely on real estate agents for those two immeasurable commodities, knowledge and experience.

Make a Standard Transaction Checklist to give to your buyers and sellers. With such a checklist, they’ll be able to better understand all the various steps required to actually close a deal. Here are some suggestions of items to include:

1. Federal, state and local disclosures and requirements
   1. Sellers are required to provide buyers with all federally mandated disclosures such as flood zones, lead based paint, FIRPTA, etc.
   2. Some states such as California require “emergency hazards “ disclosures, “special studies zones,” active earthquake disclosures, etc.
   3. In high risk fire areas and/or flood areas where standard insurance is not available, agents must coordinate the buyer’s application to transfer the current owner’s “Fair Plan” insurance policy or help the client get a new policy.
   4. Some cities, Los Angeles for one, requires the agent to provide a “City Report” that outlines required installations of automatic gas turn-offs, low flow toilets and low flow shower heads.
2. Financing contingencies – agents earn their commissions at the negotiating table
   1. Agent helps with a buyer being unable to obtain a fixed-rate loan as stipulated in the contract.
   2. Agent helps if/when an appraisal comes in less than sales price.
   3. Agent helps if/when buyer gets cold feet and walks.
   4. Agent helps when buyer doesn’t qualify for mortgage loan.
   5. If/when interest rates increase during the deal and the seller’s agent fails to counter back on the original offer, buyer’s agent help if/when buyer would accept a loan for up to .5% higher than the amount written in the financing contingency.
   6. NONE of this can be solved by technology, a bot, an inexperienced agent!
3. Inspection contingencies
   1. Agent helps in negotiating contingencies and repairs
   2. Agent helps in getting additional inspections
   3. Agent helps in talking with HOA
4. Coordination of real estate affiliated management services
   1. Agent must coordinate title services, escrow services, attorneys, repair people, movers, etc.
   2. Agent must negotiate and resolve any disputes among parties involved.

Make sure to include all the questions and answers that may arise, such as boundaries, etc. and all the steps required to resolve questions and answers when closing a deal.

Once you’re completed your checklist, share it with your client when you begin working with her/him/them and continue sharing it with them. Make sure to track your progress and check off items as you go so your client has a visual record of what it is you’re doing on their behalf.