“Because it’s a sellers’ market and things tend to slow down in the summer, there are a lot of agents out there just taking what they can get and it’s bad news for the industry,” Domenic Spina, a real estate agent with Royal LePage, told REP. “There are a lot of agents out there taking one per cent commissions when the standard is five per cent, which just helps to diminish the work we do as a whole.”
His comments are indicative of a growing concern among some agents who feel their commissions are being undercut by sellers and by agents who agree to take lower commissions, which Spina believes is undervaluing agents and their services on an industry-wide scale.
They're also backed by Jamie Winkler, a real estate agent in Chatham, who said that commission-free sites as well as the Competition Act has created challenges for agents as they're forced to step up their level of services, advertising and social media activity to prove value and worth.
One thing becoming important for agents is power of negotiation especially in markets such as Toronto and Vancouver, where sellers are looking to take advantage of strong buying demand.
According to a recent study from Inman.com, proving your worth and marketing are common themes, but there is one clear tip agents can learn when negotiating with clients who play hardball: Never limit yourself to one negotiation issue.
The concept is for both the client and the agent to win, rather than creating a winner vs. loser situation. Most likely, you, the agent, will lose most of the time if you don’t temper a buyer’s expectations.
“The success of this negotiating tactic is to allow the buyer to get one or two of his requests through. If the buyer feels they are not moving forward in any way, this tactic will truly sabotage the deal,” the Inman study reads.
“However, done correctly, the buyer will feel as though someone is on his or her side, that he or she is making progress, and giving up will not be an option when they have come so far.”
Agents are having to fine tune their skills for negotiation as sellers get more fiscally conscious about the amount of commissions they’re paying out with a hot housing market.