When sellers overprice their property and receive an offer that is exactly where the agent predicted, many will then insist that you cut your commission to make the deal. What can you do to counter their demand?

In a recent Facebook post, a listing agent asked for advice on how to handle a difficult seller. The seller’s house was 30 years old and had never been updated. The seller insisted that his house was worth what the completely updated houses were worth. During the first month, they had only one showing. In contrast, the updated properties were selling right away at or close to full price.

The seller finally received an offer that was 10 percent less than list price. The seller told his agent: “I will accept the buyers’ offer provided that you cut your commission.”

The reason? “It’s the principle of it – I’m doing all the giving and shouldn’t have to give any more.”

How would you have handled this objection?

Dealing With A Difficult Seller

First, to minimize requests to cut your commission, make it clear to your sellers: “It is your house and it is your decision.” Avoid making statements such as, “When we list your property” or “When we sell your property.” Instead, “It’s your house, it’s your mortgage and it’s your decision.”

Wally Drake of Drake Properties in Temecula, California, recommended a different approach:

“Mr. Seller, a lot of agents representing buyers have told me that their buyers have asked them this question. ‘Why do you (the seller) believe that your home is worth more than similar homes around you when those other homeowners spent money to update those homes and you haven’t?’ Now comes the hard part. You have to sit there with all the uncomfortableness that is hanging in the air and shut up. I’ve done it and you can cut the tension with a knife. Sometimes it works.”

A variation of this approach is to just say, “No.” The key is that once you say, “No,” avoid justifying. Remember the old adage – the first one who speaks loses.

The best strategy, however, for handling pricing and commission issues is to address them during your listing presentation.

Handling Pricing And Commission Issues

Dan Head of Nothnagle Realty in Rochester, New York, handles this situation by asking his sellers to choose their own comparable sales. The first step is to show the sellers exterior and interior pictures of the most recent comparable sales. Next, he asks them to select the home that most resembles their home.

Once they make their selection, he shares the price per square foot at which the property sold. He then multiplies that number by the square footage of the seller’s property. This gives the seller what to expect for their selling price. It’s tough for them to argue about the price when they’re the ones who selected it.

A variation of this approach is to create a pricing line and to post the comparable sales on the line. The comparable sales typically fall into three separate groupings.

To close the sellers on the correct price, here’s what to say.

“Mr. and Mrs. Seller, as you can see from this chart, the homes in this area sell from $124 to $176 per square foot. The homes that are selling at over $160 per square foot are either new or have been completely remodeled. The second category includes homes that have not been updated, but are in good condition like your home is. The third category includes homes either in poor condition or located in less desirable locations.

You now have an important decision to make. To be competitive in the top category, you will have to upgrade your kitchen with new countertops, cabinets and appliances plus replacing the carpet. If you don’t want to do the upgrades, then you will have to adjust the price accordingly.”

Ultimately, the listing agent did sell the property. The buyer’s agent persuaded the buyers to increase their offering price by $500. By standing firm, neither agent had to cut their commission to make the deal. That’s a great point to remember the next time a seller asks you to cut your commission.