Sep. 3, 2006 - Negotiating Commissions

There's an overwhelming feeling of satisfaction when everyone moves away from the negotiating table, shaking hands and saying, "That sounds fair enough."

I was reading an article written by Greg Swann over at Bloodhound Blog the other day, in which he relates a recent experience where the builder offered him an 8% commission.  He took it, kept 2% of it for the "fair value of his client services" and gave the remaining 6% to his buyer client.

Contrary to popular belief that there is no way to determine what is "fair" and what is not "fair",  I find the point of fair to be "fairly obvious".  For many years the concept of "win-win" has been touted as the primary goal of negotiations.  However, many will turn that thinking into "throwing someone a bone" to make them "feel like they won something". 

There's a huge difference between striking a fair bargain and creating a win-win scenario.  Quite some time ago, my partner Kim and I tried to establish an entire company based on the concept of no carved in stone ideas of what we, or any of our agents, would charge our clients.  We wanted everyone to do as we did, and as Greg did above, and know the fair point for each case.  But apparently it is not very easy for most people to be offered 8% and only keep a quarter of that, because it is the fair and right thing to do.

That is why I fight against the word "discount".  Agents could only understand that they might have to "discount" to get someone's business.  But they couldn't get their brain around the concept of determining a fair value for their services. 

They would say, "You mean I am supposed to give something back if the amount offered is more than I think it should be, without being asked to do that?"  We would talk and talk, but most could not understand the concept, of not taking all they could possibly get.

Some think I am as crazy as Diogenes to be holding out for both clients and agents, who understand the point of fairness.  To be wandering in the dark with a lamp looking for not one, but many, honest men.  Stories like Greg's give me hope.  Every day, as I strike one fair bargain after another with clients, I prove the point that "fair enough" is an achievable concept.

Now if I could just find a dozen or so agents, close enough geographically to be my peers in this quest, the battle will not have been "won", but at least started, and moving in the right direction.  Those I find like me; have companies like ours.  Setting up shop as a "Mom and Pop" or a one man show. 

It is time for us to set up a company together, where all involved are of like mindedness.  To break away from the status quo that says "Take as much as you can possibly get, for as long as it lasts". 

There may be "a sucker born every minute", but all it will take to turn a "sucker"  into a man who gets a fair shake, is the rest of the world being willing to give him a fair shake.

Sep. 3, 2006 - re: Negotiating Commissions

Sep. 3, 2006 - re: Negotiating Commissions