What Science Says About How to Sell Your Value as an Agent
By Melissa Dittmann Tracey, Guest Contributor
Real estate is not just about moving houses but also money. However, financial conversations—particularly ones involving agents’ commission rates, not just what clients are paying or getting for a house—can feel uncomfortable and awkward as you pitch your services to a client.
Yet, under new industry settlement changes stemming from a class action lawsuit, real estate professionals are having more upfront conversations about how they’re paid, who pays them and what they’re getting paid. While your commission—as it always has been—remains negotiable, you may find buyers and sellers lately are more interested in negotiating your rates or understanding more what’s behind them. They may want you to justify your services’ worth.
Yet, selling the value of an intangible service—like what a real estate agent offers to buyers and sellers—can prove challenging. Here’s what psychological studies show are some effective ways to have the “money talk” with clients.
- Ask open-ended questions.
Ditch the sales scripts and get your clients talking so that you can better relate what you bring to the table and then match it to their desires. In the study “Are We On the Same Wavelength?”, Chris Blocker, professor of marketing at Colorado State University, found that eliciting stories from clients can help them to better articulate their desires and concerns. So when discussing commission rates, an agent might ask: “Can you walk me through what an ideal home buying/selling experience looks like for you?” Other questions to consider: Tell me about the last time you made a large purchase. Then, probe further—how did it go, who else was involved, and what made the process more or less painful?
- Get more specific about your offerings.
Handouts like “179 Ways Agents Who Are REALTORS® Are Worth Every Penny of Their Compensation” certainly can help show all the services you provide in a transaction, but don’t just rely on a laundry-list rundown in face-to-face interactions. Provide details of what you provide within the key elements that are most important to your clients. For example, Ann Mirabito, assistant professor of marketing at Baylor University, notes in her study: “Do you describe your marketing plan in detail? Rather than saying you’ll ‘advertise the house,’ show when and where you’ll advertise it. Show the quality of your photography. Explain in detail how agents’ open houses work and what you’ll do to encourage agents to show the home. Paint a clear picture of how your marketing will attract qualified buyers.”
- Look for something in common.
Don’t underestimate the importance of small talk, especially before jumping into commission discussions. Find a similarity through initial discussions, and offer up genuine compliments. This helps build rapport, which social psychologist Robert Cialdini, who has long studied sales principles in negotiations, has found is critical to sales success. He refers to it as the principle of “liking,” in which people tend to be drawn to others who are similar to them, who pay compliments to them, and who cooperate in reaching a mutual goal. In Cialdini’s research, for example, he found that in a business setting that jumping into negotiations right away tended to lead to less favorable outcomes. About half of business professionals reached an agreement when getting down to business from the get-go, whereas after the exchange of personal information and finding something in common, 90% reached an agreement. So, make time for small talk!
- Show them they can trust you.
“Honesty” and “trustworthiness” are among the top-ranked traits buyers and sellers say they most often look for in a real estate agent, according to home buyer and seller surveys. But it can be difficult to establish trust after just meeting a new client. Research shows that consumers, however, can extend trust more quickly when they view salespeople as dependable, competent and customer-oriented. To demonstrate that, listen carefully and ask related follow-up questions; show a deep understanding of their individualized needs; be highly responsive to any concerns they communicate with you; show yourself as a problem-solver; and emphasize that you’re committed to a successful outcome
- Offer up some success stories.
Anchor your discussions on relevant, recent data and share client success stories, Blocker suggests. Use data and storytelling to showcase successes from your work experience of past clients, and relate those stories to your current client’s situation. For example, present case studies of similar buyers, outline the challenges they faced in the market, the solutions you provided and the positive outcomes achieved, Blocker recommends.
- Watch your nonverbal cues.
Research has shown commissioned salespeople can be viewed as “fast-talking,” “pushy” and “insincere,” according to researchers Vinita Sangtani and John Andy Wood in their study, “Overcoming the Stigma of Commission-Based Sales.” Disconfirm any stereotypes by putting more weight on first impressions: “Handshakes, eye contact, and genuine smiles begin the relationship on a positive note and are more than a formality,” the authors note.
In Blocker’s Research, the “Emotionally Intelligent Salesperson,” he found the importance of agents maintaining open and confident body language, such as with eye contact to show attentiveness and ensure facial expressions align with verbal messages. “When addressing difficult topics like commissions, agents should be calm and composed, avoid defensive gestures and use a sincere tone to foster trust and openness,” Blocker says. (Defensive gestures could include fidgeting, leaning back, frowning and interrupting.)
And if your clients have any objections, listen carefully. “Handling objections effectively involves understanding the objection, validating the client’s concerns and reframing the conversation to address underlying needs,” Blocker says. “This approach helps in addressing the real concern and provides a path to a mutually beneficial solution.”
Melissa Dittmann Tracey
ABOUT ME:
Melissa Dittmann Tracey is an award-winning journalist who covers the latest real estate news and trends. You can hear her weekly on the syndicated radio show and podcast, Real Estate Today, in her housing trends segment, “Hot or Not?” She is the creator of the Styled, Staged & Sold blog and a frequent contributor to Houselogic.com and REALTOR Magazine. She’s also the host of The Housing Muse podcast at http://www.housingmuse.com. Follow her on Instagram or X @housingmuse.
