Fee Differential

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Anthony Lamacchia: What’s up, guys? I want to talk to you about getting the commission that you want when representing a buyer. Too often our agent’s just accepting what the listing agent is offering, even if it’s less than the norm or less than you want and not getting the difference. I’m going to teach you in this video how to get the difference, how to get more. Well, I’m, at least, going to teach you an idea of how to get more. It’s a two-hour training, at least. We did it just last week here at our company. I said, “I should be sharing this with all of you. All of you are so good to me.”

Here’s the deal, what do you do to get your commission? Number one, when you’re representing a buyer, that is an agreement between you and buyer, especially if you get a buyer agency agreement, which you should. It helps. It sets you up better for a better relationship with the buyer and gets everybody on the same page, creates more loyalty from them. You wouldn’t work with a seller if they weren’t signed up. Why would you work with a buyer if they weren’t signed up with you. That’s step one, getting the buyer signed to a buyer agency agreement.

Step two, you identify a property. You realize that the property’s paying less commission than you want, than you require, than your company requires, whatever it may be. Nothing wrong with discussing this with the buyer, nothing wrong with possibly talking to the listing agent about if there is an opportunity to get more. You have to be a little careful there, but nothing wrong with a discussion. What I want you to be thinking about is how do you make up that difference? Oftentimes, they’re offering a half point or a full point less than an agent wants, especially when the market’s hotter.

When is the listing agent or a seller going to be willing to pay more? If the home is not selling. Guys, 20, 30 plus days in the market, the home is not selling, perfect opportunity to talk to the listing agent, “Hey, look, on all my deals, I like to be paid five apples,” whatever it is. “I like to get paid this, I want to get paid that. Do you think there’s an opportunity for that to happen with your seller? I could write it into the offer.” Or you could just write it in. Those things are allowed. That is okay. It’s all part of a negotiation.

If the property is just listed or they have multiple offers, I wouldn’t even touch it. Don’t even get into it with them. You will lose the battle, you’ll lose the property on behalf of your buyer. You don’t want to do that. Nobody should want their commission to come between them and the buyer. Number one, buyer agency agreement, number two, conversation with the buyer, number three, possibly conversation with the listing agent, possibly. Again, multiple offers are just listed, don’t do that.

Number four, this is what this video is really about, fee differential. This is what we call it here in our company, obtaining a fee differential. That is the difference between what you require, what you want and what they are offering and obtaining that from the buyer. You can do that in a closing cost credit from seller at the closing. It’s complicated. It’s not something that I can explain. I shouldn’t say it’s complicated, it’s not that complicated, but it’s not something that I can give– What I meant is I can’t explain the whole thing in this video, but we did this training two weeks ago. We touched on it. Last week we went deep on how to do it, how to discuss it with the buyer, the contract addendum that you should get signed, how and who to distribute that addendum to and how to get it in closing.

In our company here, we have agents probably collecting anywhere between 5 and 10. Yes, not that many. Probably, 3 and 8 fee differentials a month. That’s an extra half a point here or an extra point there, because agents deserve to get paid what they want to get paid. Remember, this is free enterprise. You are in a service business. You are allowed to charge what you want. If you want to charge way more than everybody else, you can, doesn’t mean you’ll get it. It doesn’t mean you’ll get the business, but you can.

Too often, a realtor is selling themselves short, accepting what someone else tells them that they have to get paid. You do not have to do that. You are your own boss, you are in business and you are allowed to go for whatever you want to go for and whatever the market will give you. If you’re providing good value, if you’re doing a good job on behalf of your clients, which you should be, if you’re caring about your clients like they’re family, like you should be, then you should get paid. You will be shocked how many buyers don’t care.

When we first learned this about six or seven years ago in how to obtain a fee differential and how to talk to the buyer about it around a negotiation time and how to get it through the closing cost credit, it was a little foreign to us. Then we started using it and it became easy and we realized, “Wait, there’s nothing wrong with this.” At the time, we vetted it with various lawyers in a lot of the real estate associations, our own corporate council.

We did all different types of things to make sure it was okay, and it is okay. I want to extend this training to you guys. Like I said, we just did training on it. Maybe I should have did this video first and invited in 10 guests. Maybe I’ll do that next time, but I want people to be thinking about this. I’m thinking we’re probably going to do more training on it. Maybe we could provide you guys with some additional tips on it.

For now, I just want your mindset to change. Take out of your mind thinking that you can’t obtain more commission or that it’s somehow wrong if you obtain the commission that you want or you require. That’s step one to me talking to you guys about this. That’s our fee differential. It works like a charm. We had a few training guests in last week that were like, “I never even heard there’s such a thing. I’ve been doing it 20 years. I’ve been doing it 30 years.” You can do it, okay? That’s all, my friends. Have a good day.