I have a friend who is a cosmetic surgeon—a very successful one. I ran into him the day after I had seen a very well-known celebrity on television with a SERIOUSLY botched facelift. I asked him why it was that people with so much money would end up with such poor results. I mean… you would think that they could pay for the best surgery in the world, right?
His response was something to the effect of.. “Here’s what they do. They go to the best surgeon and he tells the person that a good result is not possible. So the celeb goes to the next best surgeon who says the same thing. The celeb finally finds someone who till take their money and do the job. Hence, the bad result.”
Interestingly, the same thing happens with attorneys. There will always be an attorney willing to take a case, whether or not they have a reasonable possibility of a positive outcome for the client.
Well… the same happens in real estate. There will always be a listing agent or a buyer’s agent that will lower their commission or offer a credit in order to get the job done. There will always be someone willing to do it for less. Whether or not the client will have a positive result is unknown.
The question is: are you willing to offer discounted services or work with people that want a discount?
And, what should you say to people who ask you to discount your services?
Here are three quick and easy ways to deal with people who want you to discount your services:
- Explain what while they may think that you are earning a lot, the truth is that you are not. Explain how you earn your money, how much you do without any compensation, outline the broker split arrangement, the independent contractor additional tax owed the IRS, and also the cost of insurance, memberships, and all of the things that you pay on your own (photography, advertising fees, etc). A reasonable person will then understand that they have a misconception about your income.
- Set up a situation online which makes clear that you do not need to pander and lower your prices in order to get business. Build up your reviews to at least 50 5-star reviews. Make sure to create blog posts, social media posts, and videos that demonstrate your knowledge and your success. Provide value through the internet. In doing so, you’ll find that people have often already decided to hire you before they even meet you in person. They know that you are “the one” for them.
- If people are still asking for a discount, you can use these three approaches: a) offer to make a charitable donation to the charity of their choice at closing (this is good because it is a tax deductible donation), b) pay for a small item in their transaction, such as a compliance fee or a home warranty, or c) tell them to move on.
Nobody asks doctors and lawyers to discount their prices, and they never do. The next time you are asked for a discount, try these easy techniques above and also think about that big name celeb and why she had a terrible result from her cosmetic surgery!