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Training & Business Development: Real Estate Commissions, The White Elephant in the Room

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RISMEDIA, June 6, 2007-”Will you lower your commission?” is quite possibly the most dreaded? question that any real estate agent can ever hear. This simple five-word phrase has had the ability to strike terror in the heart of any hardworking agent. And why is that? A doctor or lawyer or even a dentist has no problem collecting money for their expertise, and for performing various consultative services for their clients. Why should real estate agents, who provide expertise on housing markets, inventory levels, negotiation skills as well as pricing – be any different?

Mollie Wasserman of Massachusetts doesn’t think they should be, and in fact she’s written a book to describe a new paradigm and way of doing business that allows the agent to function as the fiduciary counsel; the skilled expert that they were intended to be, and allows the consumer a choice in how they want to pay for that expertise.”Most agents are scared to death of revealing to the consumer the real reason commissions are so high,” says Wasserman, “the reality is that commissions are really only thinly-veiled insurance policies. It’s a high-risk, high-reward scenario.”

In essence, Wasserman says, the agent assumes all the risk, and the consumer pays a premium at the close of the transaction for having for the convenience of not having to assume the risk themselves.

In her search for a better way to receive compensation for her expertise and counsel, Wasserman took a cue from other consulting-based industries like law and medicine, and came to a conclusion, “Rather than trying to justify a commission on the services I provide, which is more commodity-focused, I base my fees on the expertise I utilize, which is more consultative-focused.”

One of the first agents to begin offering her clients a choice in the amount and type of help they wanted from their Realtor. Wasserman explains it’s beneficial for agents to provide their clientele with a much wider variety of compensation alternatives.

“When I meet other agents, I constantly recommend that they consider broadening the compensation options at their disposal. One tool cannot possibly build or repair every device, but a diverse assortment of appropriate tools will always get the job done.”

The appeal is obvious; as downward pressure on commissions continue, agents who want to remain in the business are looking for new solutions and ideas to add to their repertoire of options they may present to their clients.

On this week’s RISMedia/iSucceed Business Development and Training Call, Wasserman explains her unique Consultative model, where agents become consultants who offer a broad range of services and act as objective information interpreters rather than subjective interested parties whose advice is ultimately tied to their commission check. Hosted by iSucceed’s own Kelly Kelley, the interview will be available for one week only at www.isucceed.com/rismedia.

In the integrity and pioneering spirit of Keller Williams Realty, Mollie Wasserman (ABR, RECS, ePro) has always enjoyed playing matchmaker – identifying customer’s needs and finding just the right products or services to match them. Her team, Mollie & Company, services greater Boston’s western and southwestern suburbs. With a knack for embracing the opportunities presented by change, while at the same time avoiding its pitfalls, Wasserman is an industry leader in innovative concepts, such as consulting fee alternatives to the traditional sales commission model.

Every Wednesday the RIS Media/iSucceed Business Development and Training Call presents profitable real estate strategies and introduces agents across the country to the full 30-minute iSucceed Weekly Counseling Call, available only at www.iSucceed.com – the most comprehensive online provider of real estate tips, tools, secrets and success strategies, directly from North America’s 175 most successful real estate professionals.

Listen to this week’s interview, visit http://www.isucceed.com/rismedia/.

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