1. Commission Rate Strategies
Increasing Commission Rates and Personal Income

2. Commission Rate Strategies
Pricing as Advertising

3. Four P’s of Marketing Place Product Promotion Price
Cities, Neighborhoods
Counties, Regions
States
Areas by Property Type
Ex: Residential miles, farms statewide
Product
Real Estate Services
Auction Services
Property Management
Land Management
Farm Management
Appraisal
Other?
Promotion
Unique Message
Advertising
Direct Mail
Social Media
Events
Price
Price = Quality
Price Level = Service Level
Higher Price = Better Marketing
Price = Value
Price to Deliver Your Business Model

4. What Does Price Communicate
What is the difference between a $1,499 and a computer?
Class Write List
Person with most features wins a free SEOed listing
Review List - Everyone Volunteers One New Possible Feature.

7. What Does Price (Commission Rate) Communicate in Real Estate
What is the possible justification in services between a 5% and 8% commission rate?
Class write list of what could possibly justify a 1% Higher Rate
Person with most extra services wins a free SEOed listing
Review List - Everyone Volunteers One New Feature or Service.

8. Marketing Plan Options
Marketing Program
5.5% 6% 7% 8% 9%
10%
Custom Elements
Pricing Consultation √
Digital Photography
Top Local Website
MLS Website Syndication
Yard Sign
Office Team Selling
Office Local Advertising Buyer Leads
Standard Listing Website
Local Buyer Database Blast
Open House
Home Flier
Direct mail Postcards (50)
Featured Office Website Ad
Regional Buyer Database Blast
2nd Yard Sign
3rd Party Top Websites
National Specialty Websites
Virtual Postcard
Direct mail Postcards (100)
National Buyer Database Blast
Professional Photography
Custom Home Brochure
$200 Enhanced
Custom Website
$500+
Virtual Tour
$150
Drone Photography / Video
$100
Ad Agency (EMS) Options
Menu of Items

9. Negotiation Banker vs Realtor
If you have to negotiate your commission rate, do it by 0.5%
Not 1%, every realtor negotiates by 1%, that equals a 20% decrease in your price. Do you have that much negation room in your rate? Are you going to negotiate the sale of their home by 20% round one? I hope not.
What does it communicate to your seller?
The banker said, “Bankers are more respected as professional business people than most real estate professionals and here's why. A banker negotiates by 1/8%, or 1/16% because they run a tight business and are very careful with money and know what it takes to operate their business successfully. Bankers think a $5,000 lot is a lot of money, $50,000 home loan is big, $100,000 is huge, and so on. So small changes I interest rates are huge. Almost all real estate professionals negotiate by full percentage points off a 5% - 6% commission rate. That means they have the ability to negotiate by 20% at a time! That is way too much room if you really run a tight business and know what it cost your to offer your services. You lose credibility and professionalism. This is why bankers are seen as much more professional than real estate professionals when it come to handling money and running professional business.” The banker said, “If you negotiate by 0.5% (vs 1%), you communicate you may have 10% flexibility if they are willing to price it at a fair price (vs over priced), but not 20%. Now they will think you run a tight ship and will be a better negotiator of their property sale.”

10. What it Means to Your Income

11. Pricing is Advertising
What are you “advertising” with your commission rate?
What effect does that decision have on your financial success?

12. Pricing is Advertising
Increase Your Commission Rates and Personal Income