“𝑰𝒏 𝒕𝒉𝒆 𝒂𝒃𝒔𝒆𝒏𝒄𝒆 𝒐𝒇 𝒗𝒂𝒍𝒖𝒆, 𝒎𝒐𝒏𝒆𝒚 𝒃𝒆𝒄𝒐𝒎𝒆𝒔 𝒕𝒉𝒆 𝒏𝒆𝒈𝒐𝒕𝒊𝒂𝒃𝒍𝒆.” – 𝑼𝒏𝒌𝒏𝒐𝒘𝒏
“𝑰𝒇 𝒚𝒐𝒖 𝒌𝒏𝒐𝒘 𝒕𝒉𝒆 𝒆𝒏𝒆𝒎𝒚 𝒂𝒏𝒅 𝒌𝒏𝒐𝒘 𝒚𝒐𝒖𝒓𝒔𝒆𝒍𝒇, 𝒚𝒐𝒖 𝒏𝒆𝒆𝒅 𝒏𝒐𝒕 𝒇𝒆𝒂𝒓 𝒕𝒉𝒆 𝒓𝒆𝒔𝒖𝒍𝒕 𝒐𝒇 𝒂 𝒉𝒖𝒏𝒅𝒓𝒆𝒅 𝒃𝒂𝒕𝒕𝒍𝒆𝒔.” – 𝑺𝒖𝒏 𝑻𝒛𝒖
“𝒀𝒐𝒖 𝒄𝒂𝒏 𝒆𝒊𝒕𝒉𝒆𝒓 𝒃𝒆 𝒓𝒊𝒈𝒉𝒕 𝒐𝒓 𝒈𝒆𝒕 𝒘𝒉𝒂𝒕 𝒚𝒐𝒖 𝒘𝒂𝒏𝒕, 𝒓𝒂𝒓𝒆𝒍𝒚 𝒃𝒐𝒕𝒉.” – 𝑰𝒔𝒂𝒂𝒄 𝑮𝒖𝒛𝒎𝒂𝒏
If you’re reading this article, chances are you’re not seeing the worth from your current brokerage, or you are seeing that others have more to offer. Deep down, your real estate broker likely knows he/she is not up to par. Let’s look at that first quote. Use this phrase and mindset to take control of the conversation. In other words, there is an absence of value, or you wouldn’t even consider renegotiating your split.
Taking a look at the second quote, you can now start to prepare for the conversation. You have to know that you are dealing with someone who is more of a business owner or manager than a typical real estate agent. You need to shift your thinking to how they think. That is to say, stop thinking in percentages, and start thinking in dollars! As real estate pros, we live and die by the almighty “%”. We’ve been conditioned to trip over percentages when most other people, including your broker, think in dollars. So when you are asking for a better split, have a proposition based on real money, not percentages.
Chances are, if you plan growth (more on that later) and hit those numbers, you’ll end up making your broker more money, even with a better split. So focus on the money, not the percentage. Position your growth as a positive for the broker. Remember, EVERYONE is tuned into the same radio station, called WIFM (What’s In it For Me), and you have to appeal to what motivates them to consider your proposal. No one likes the agent who starts with “I need…”
Next, is disarmament. Disarmament isn’t just a political or military term. It is a real term of a way to engage in negotiation and confrontations of any type. When in any type of negotiation or confrontation, having a way of disarming the other party is required. The type of disarmament I am referring to in this case, however, is with regard to what holes and weaknesses you may bring to the table as an agent. Sure, you could always benefit from some leverage, but you also want to make sure to up your armor. Not just poking out their holes, but knowing how to cover your back. It starts with knowing your numbers. Have a business plan with growth projections and evidence of success.
Have a secret weapon. Something like a quality lead source that you can count on to generate X more sales over the next 12 months. If you know that number, you are much more equipped to go in and have this negotiation go your way. This will give you evidence supporting your argument of making the broker more money, even with a better/different split. Also, a high quality CRM that is built for your business which will increase transparency and productivity. That’s a great thing to have because you can point to that, and clearly see that you’re set up for success to see growth. Knowing your broker will ask questions about how you plan to justify your shiny new split, and being prepared will make all the difference. Real Estate Brokers are not in the business of losing money. You need to prove to them that they’re not going to lose any money by giving you a bigger split; they are either going to break even, or make even more money.
A few other things to consider having written up and ready to present: business and marketing plan, a clear projection of how many homes you will close this year, and the corresponding closing ratios, to name a few things.
Lastly, I just want to talk about “You can either be right, or get what you want.” It’s not about equity, don’t say, “So-and-so has another split, and I deserve that too!”. Guess what; your broker doesn’t care, and does not have to play by those rules. Equality inside the private industry doesn’t exist, get over it! And stop asking for equality and fairness, and start working toward getting your unfair advantage. There’s no reason you shouldn’t be part of inequality, just be on the right side of the equation. And if you can’t handle that, you should get out of real estate. You’re going to see that message come through quite consistently.
Wrapping up, one of the best things you can do is to position it like you’re on their side of the table. No one likes to negotiate against somebody, they like problem solving with somebody on their side. Whether it’s commission split with your brokerage, or even helping your spouse get a raise at their job, or if you have another job, or whatever it is; the best way to approach it is this, “What would need to happen in the next thirty days for my split to end up going from 60/40 to 70/30? What would you need to see?”. That’s a great way of saying, “Let’s solve this problem together.”
Now the other thing is this, this is just negotiation: “Can you do any better?”. When they say “Oh, well, I can do this..”, if you don’t ask “Can you do any better?” at least three times minimum in a conversation of negotiation, then you’re leaving something on the table. “Can you do any better? Can you do any better? Can you do any better?” Just push it, and if they say no, then ok, “Are you sure you can’t do any better?”, “OK, let’s take a step back, I’m being sincere, can you do any better?”. What that does is: one, you just want to see if they can do better, and two, it kind of puts them in a state of wondering if you got an offer from somebody else, and you’re hoping they will match it. It gets them thinking.
If you end up in that negotiation, use these tactics correctly, come with the right mindset, ask the right questions, do the disarming exercises, and you’re still not getting what you want, then there are two outcomes. You need to start leaning more heavily on your broker, and get that value out of them. Go to every training, take ownership of your own life and business, and ask them every question. Get everything you can for that amount of money that you’re paying – you’re paying them! You are paying the broker, work them like an employee, ask them every question, call them , and text them and call them again, and when they’re like “Why are you bugging me so much?”, the answer is “Because I pay you. You work for me, I pay you every time I close a deal. Otherwise, I’m going to go to the next shop in town.” And that’s the other alternative, go find another broker. If you want to do that, check out this website. It can help you find a new broker.
When brokers compete, agents win.
“What would need to happen in the next 30 days for my split to be XX/XX?”
“Can you do any better” (X3)
Not getting what you want? Lean more heavily on your broker. Or go find another broker.