Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business Marketing

Let’s Talk About How Much We Charge

Money with Sign

Let’s talk about commissions.  Realtor to Realtor.  We do it everyday with potential customers.  Reporters can ask us how much we charge and then print our answers for other agents to read.  You can call any real estate office and simply ask them or just look on their website (if they are willing to put their fees there as most discount companies are – and I am, as well).  Would it be okay if you read how much another agent or company charges but not okay if you heard them physically say it? 

A few years ago when I was speaking at Sell-A-Bration, in front of a few hundred people – which I will be again in a few days – I mentioned commissions and several people started openly protesting that I could not keep talking about it or they would have to leave the room.  I patiently explained that I was not breaking any law, violating the spirit of any law or doing anything wrong.  In fact, I was doing something very right: I was helping fellow agents to see that they didn’t need to "match commissions" with the limited service companies (the we-do-nothing-for-less-crowd), that there were services they provided and skills that every single person in the room possessed that factually mattered; that the running dog press had "their story" prior to "researching the article" and that ingesting a steady diet of poison would make anybody sick.

A few morons continued to loudly bray that if I did not stop talking about commissions they would leave the room.  Fortunately for me the main entrance to that room was to my immediate left and was a very large opening.  So it was quite easy for me to gesture towards that doorway so someone that unobservant wouldn’t have any difficulty finding their way out.  Two or three people got up and left.  Several of the CRS instructors in the audience had also tried to explain that there was nothing I was saying (including how much my fees were) that violated any law.

What is against the law (as it should be) is PRICE FIXING.  Agreeing to all "charge a certain price".

Advertisement. Scroll to continue reading.

Is it possible that someone honestly believes that I could make an announcement via a blog post (or speaking to an audience of a few hundred people) and "fix commission amounts"?  "I charge ‘X’ amount because Russell Shaw told me to"; "Once the order from Russell arrived, we couldn’t charge any less"; "All of us now charge this amount, it’s the way Russell wants it now".  Really?  If I was truly that powerful I wouldn’t waste my power on something that stupid.  And if I was going "fix commissions", I would have everyone in the country charging a lot more than me so I could get all of the business without having to try very hard.

Truth is, I am not in competition with any agents outside of my area (yes, yes, I know we really need a national MLS so all companies and agents will be free to prove they have no real knowledge or value) and I go way out of my way to help and train the agents who are here.  Customers aren’t scarce.  Regardless of what is currently happening (this day, this month, this year) I will continue to survive.  I am not afraid of any competitor, in fact, I can now see that it is because of them I have arrived at my level of competence.  Their ability to win what I wanted forced me to get better.

It does not matter to me what you charge.  Charge the amount that seems right to you (based on your area, your price range, your competition, market conditions and your ability to effectively communicate your level of value.  If you feel you must charge less because of the internet, the existence of discount companies, articles in the media, "ethical explanations" from other agents who are hell-bent on having less (for themselves and everyone else), or any other important reason to work on reduced prosperity for yourself and your fellows – I understand that nothing I am going to say or write is going to change your mind.  This is strictly for those who haven’t already gone too far down the rabbit hole.

Advertisement. Scroll to continue reading.
Written By

Russell has been an Associate Broker with John Hall & Associates since 1978 and ranks in the top 1% of all agents in the U.S. Most recently The Wall Street Journal recognized the Top 200 Agents in America, awarding Russell # 25 for number of units sold. Russell has been featured in many books such as, "The Billion Dollar Agent" by Steve Kantor and "The Millionaire Real Estate Agent" by Gary Keller and has often been a featured speaker for national conventions and routinely speaks at various state and local association conventions. Visit him also at nohasslelisting.com and number1homeagent.com.

15 Comments

15 Comments

  1. Jonathan Dalton

    February 4, 2009 at 3:29 pm

    Sounds like a comment I made on my own post, except I wasn’t invited to speak at the CRS Sell-a-Bration.

    It’s not price fixing, it’s advertising. I don’t see Southwest Airlines in trouble for advertising their fares. And I don’t see the brokers and agents who advertise their fees (generally because they believe them to be lower than others) in trouble either.

  2. fred

    February 4, 2009 at 6:05 pm

    Just ridiculous! how can any agent justify thousands of dollars in commissions for a few hours of work. I used to play that game until I realized I didn’t “need” to. I am now able to help my clients, offer more marketing effective services, and eliminate the overhead without charging the outrageous commissions.

  3. Russell Shaw

    February 4, 2009 at 6:52 pm

    I’m happy for you, Fred. Get back to me in 20 – 30 years and let me know how it worked for you.

  4. fred

    February 4, 2009 at 8:32 pm

    wow I have been reading your pompous posts… this comment of yours proves my point. good thing for you that home depot is always hiring.

  5. Elaine Reese

    February 4, 2009 at 8:48 pm

    Fred, we’re all free to charge whatever amount we believe our services are worth. Many of us spend a lot more than a few hours taking good care of our clients.

    Given your attitude and treatment of others (Russell), you may come to regret your last statement. That was totally uncalled for.

  6. fred

    February 4, 2009 at 9:23 pm

    Sorry for being rude… I read this blog daily but the attitude of many articles on here towards alternative business models or flat fee brokers makes me angry.

  7. Missy Caulk

    February 4, 2009 at 9:52 pm

    Russell, this came up in a board meeting once and some folks got the same idea. They were going to leave the room.

    Now it had nothing to do with price fixing, some agents are so weird when the subject of commissions comes up.

  8. Russell Shaw

    February 4, 2009 at 11:16 pm

    Fred,

    I am very opposed to a national MLS. I am not – in any way – opposed to discount or limited service companies. I believe there is room for many different business models and types of agents – not a “one size fits all”. Perhaps most importantly, I am not opposed to you. 🙂

  9. fred

    February 5, 2009 at 8:01 am

    I agree a national MLS is not good. However I do think there should be just ONE for each state. Our license is good for the entire state, why should we have multiple and overlapping MLS’s!

  10. Matthew Hardy

    February 5, 2009 at 11:29 pm

    > I would have everyone in the country charging a lot more than me so I could get all of the business without having to try very hard.

    Priceless.

  11. John Wake

    February 6, 2009 at 2:09 am

    My theory is that “Realtor commission-discussion paranoia” is a psychological coping mechanism used to dismiss discount brokerages as being somehow unethical.

  12. Russell Shaw

    February 6, 2009 at 2:18 am

    Both of your comments (here and in Jonathan’s post regarding Inman and commissions)are pure genius, John.

  13. Jay Thompson

    February 6, 2009 at 9:52 am

    Fred wrote: “I read this blog daily but the attitude of many articles on here towards alternative business models or flat fee brokers makes me angry.”

    Got a link to one of those articles? If there are “many” of them, surely you can provide a link to one.

    As for Russ Shaw working at Home Depot, you obviously don’t know Russ, nor the market he works in. Russell Shaw is a champion among men. He gives SO MUCH to local agents it borders on the absurd.

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.