We all face situations in commercial/industrial real estate brokerage where the owner of a property wants us to reduce our commission. Let me offer the following to you on this subject:

"Don't reduce your real estate commission unless you are certain that the owner will walk away from the deal if you don't agree to the reduction."

If you are certain that the owner will walk away from the deal unless you reduce your commission then make sure you stand firm for what is still a fair commission.

So many agents cave in immediately when asked to reduce their real estate commission from a full commission to a lower amount. They put up very little or no resistance whatsoever when asked by an owner to reduce their commission. The truth is that any time you spend negotiating for your full commission may be the highest-paid time you ever spend working as a commercial/industrial agent.

Let me illustrate:

Suppose you are in an appointment for a $500,000.00 listing and you have requested a 6% commission as part of the agreement with the owner. Just before signing the listing agreement the owner asks you if you will reduce your commission to 5%. If you hold firm on the 6% figure and have previously rehearsed your presentation on why this amount is appropriate, the owner will most likely move forward and sign the agreement including the 6% commission within about 3 minutes. Assuming this is true and that you have listed the property at a price that will enable you to sell it within the listing period, you just earned an additional $2,500.00-$5,000.00 in gross commission for only 3 minutes of work! Depending on your commission split with your company and whether or not you sell the listing yourself, this equates to an hourly rate of between $25,000.00 and $100,000.00 an hour!

If you have previously rehearsed all the reasons why you should receive a 6% commission on the transaction including how you will handle any possible objections and counter-arguments by the owner, you will walk out of the appointment almost every time with your full commission intact.

Having spent 20 years as an agent in commercial/industrial real estate it took me several years to begin to fully apply this approach. After I began to apply it I rarely encountered a situation that required me to reduce my commission in order to obtain a listing or complete a transaction.

Remember--despite the fact that the owner is asking you to reduce your commission he is in a position where he desires to move forward and make a transaction. Utilize this momentum to your benefit.