Response to “Holding the Line on Your Real Estate Commission”

I read an article in The Institute for Luxury Home Marketing about holding on to high commission rates. It was the usual “tactics training” for real estate agents. It reminded me of doctors who address the symptoms but not the cause of illness. Among the reasons this author gave for home sellers wanting a lower rate, these two stood out:

“They may have had a bad experience and don’t think much of real estate agents in general.”

Those are symptoms, not causes.

Symptom = “Bad experience…”  
Cause = It’s TOO easy to enter the industry!
When nearly anyone with a high school degree can get into real estate, we’re going to have poor service.

Symptom = “…and don’t think much of real estate agents in general.”   
Causes = Again, it’s too easy to enter the industry AND this author called us “salespersons”!
We are FIDUCIARIES by LAW unlike, say, a car salesmen.  People in SALES are NOT fiduciaries!!!  Please read that again – real estate agents are fiduciaries. Why should real estate brokers command more when the public doesn’t realize this? Why should we command more when NAR (National Association of Realtors) and MLSs around the country have called us “salespersons” for decades?

What’s a fiduciary? Being a fiduciary means I’m looking out for my client’s best interest above my own. A salesperson has no such requirement.

Fiduciary relationships often concern money, but the word fiduciary does not, in and of itself, suggest financial matters. Rather, fiduciary applies to any situation in which one person justifiably places confidence and trust in someone else and seeks that person’s help or advice in some matter. The attorney-client relationship is a fiduciary one, for example, because the client trusts the attorney to act in the best interest of the client at all times. Fiduciary can also be used as a noun for the person who acts in a fiduciary capacity, and fiduciarily or fiducially can be called upon if you are in need of an adverb. The words are all faithful to their origin: Latin fidere, which means “to trust.”


Anyone who is self-employed, including other fiduciaries such as lawyers, doctors, CPAs, etc. must market themselves as well, i.e., sell their services to the public. Yet NO ONE calls them “salespeople.” NAR and MLSs failed the industry decades ago by not elevating the industry by making it harder to become a real estate agent, which protects the public good by preventing people who shouldn’t be in the industry from entering, and AS A RESULT, we could keep high commission rates. The legal and CPA professions make their exams hard to pass on purpose – to keep unworthy people out! That, in turn, allows them to keep their rates high. Both exams have a pass rate of only ~50%.

I haven’t asked the Washington Department of Licensing what their pass rate is, but I have seen a ton of real estate schools advertising that their students’ pass rates are 95% or more! The State of Texas requires real estate schools to have a first-time pass rate of at least 80%!  Most of these licensees will never sell a single property or sell on average only 4 per year; thus, gaining no experience that’s helpful to sellers.

REAL ESTATE AGENTS: Don’t like that sellers are asking you to reduce your rates? ELEVATE THE INDUSTRY – Demand your state government agency protect the public on these large financial transactions by increasing the education and experience requirements. Don’t do it by smarmy arguments that put you on the opposite side of the table from the person you’re supposed to protect. The MLSs won’t do that because they need dues-paying members.

Until that’s addressed, I’ll continue making a healthy living meeting the demand for full-time, full-service, QUALITY 1% real estate brokerage services without the need for extensive advertising.

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