The comm'l. classroom: Cut my commission - are you crazy?

The commercial market has softened. Finding commercial mortgages are more difficult; closings are delayed, at best. The commercial agent's income is delayed. We now find ourselves working harder to make deals happen. This morning I paid $3.35 per gallon to fill my car with gas. The good news is I have a mid-size car. The person at the next pump was mumbling something about $64 to fill their SUV. The news is talking about $4 per gallon by the summer. I used to have a cell phone, it was relatively inexpensive. Now I need instant access to my e-mail, I must be able to respond immediately to it or to text messages. Today's business "communication requirements" dictate that I must have a Treo or Blackberry. My new phone cost me $450 and now runs $75 a month for service. The dues to my realtor board went up, as did other "required" commercial organizations that I need to be a member of. The commercial listing services (web sites); guess what - they have gone up too! Landlords lose money when they have vacant space. Not our fault; in fact we help solve their problem by finding them a tenant. Unfortunately some landlords thank us by asking us to reduce our fee! We educate a seller by compiling market information, helping them evaluate market conditions to set a realistic price, find a buyer, negotiate a deal, attend property and environmental inspections, attend a closing and be asked to cut our commission!? What is wrong with this picture? Our cost of doing business has increased dramatically, while the opportunities to do business have gotten challenging. Market conditions will improve, but the higher costs are here to stay. In the thirty-five years I have been in this business I have not seen any raise in our fees. (Granted all commission fees are negotiable between the client/customer and the brokerage firm.) Being paid based upon the value we bring to the transaction is fine but our fee has to include our expenses too! Should we raise our commission fee? The next time a client asks us to reduce our commission rate perhaps we should say: "Oh my mistake! What I just quoted you was our old commission rate, the company just increased our fee to X%." You could be nice and then say: "But, since I made the mistake I will honor the rate I quoted you." Some agents when challenged by a request to reduce their fee just say: "No!" Most owners don't realize that if we reduce our fee by only one percent, in most cases, the real dollars are being reduced by 15% or more. "You want me to reduce my income by 15%; would you like to reduce your sales price by 15%?" We are professionals and work hard for our money. Current market conditions are challenging for owners and agents alike. When we perform our services we deserve a full fee! Edward Smith, RECS, is the Long Island metro regional director of Coldwell Banker Commercial NRT, Eastport, N.Y.