1. I HAVE a niche and can't beat listings away with a stick. I don't aspire to work with distressed sellers. The ROI is not there for me and I am not at the place in my life where I want to take it on. 8 years ago yes; now, I seek only mutually joyful connections and get paid what I am worth.
YMMV, ayatollah of rock and rolla!

Been there, done that with short sales, Thomas - and if the banks didn't cover my normal fees, I absolutely contributed the share that they did not cover, to the sellers (didn't ask them to pay the difference). 

When our market was in such disarray, I did that on numerous occasions - 75% of my normal commission is better than 0%. I'm happy to put the work in to get the deals done.

Now, the buyers & sellers asking for a discount are not asking because of financial hardship though - they're asking because another company has offered sub-standard service and they're comparing it to full service. Now, that makes me crazy!

Depends on the situation.

Cutting corners seldom does anyone any favors, it takes money to attract the right buyers and your client will not be served well if you are undercapitalized in your efforts to help them.

I have always paid my agents very well, and it pays off.

My wife is often compassionate for situations and will has even worked for a few families pro bono, but fees are negotiated off her firm's set fees on a case by case basis.  Financial hardship due to I got my nails done and keep my cable instead of making my house payment doesn't count.

No need to discount commissions if their suffering a financial hardship. I have helped 200+ people like that. Chances are they'll qualify for a short sale. If they do then the real estate fee+the attorney's fee is paid for by the bank. I have been doing these since the market turn in 2005 & have closed 100% of these type deals. With every one I do there's one less foreclosure out there & agents, sellers & buyers are all happy at these closings. 

Number one.  Can always refer them out or hire an agent to work strictly these leads and have them all have (by your employment contract) a 25% referral back to you for the cost of the lead.

When I got back in, I looked at having a separate discount program targeting that type of niche, like a flat fee limited service program.  Only problem is, once you start offering that you're forever a discount agent and it'll much harder to justify the full percentage with clients.  I think option two could hurt your overall business.

#2.  For a period when values were just coming up from being underwater in a 10 year subdivision I farmed, I had to do exactly this.  It's silly to say no to the business.

Would first see if their situation would qualify for a short sale (slim chance these days, but possible) before hitting door #2. A 20% to 30% cut is a no-brainier (if required), same as referral (from an agent/broker) income.

with a steady flow from this niche, I'd cut them the deal of the century!!!! keep that flow going.... there's so much residual business produced from one listing, imgine how productive a team could be with the whole package!!!

I think the answer to this would depend on the price point because that would determine if/how much I could afford to cut fees. Let's not forget, if one gets busy working with a bunch of discounted properties that is time that's not spent developing business for non-discounted properties. I'd also want to be very sensitive as to whether or not this would somehow make me seen in the market place as a discount broker, which I am not.

When the market was very different - during the past recession - our Team did numerous short sales. We did not reduce our commission then and that would not be our strategy now.

I have discounted a commission to make a deal on occasion but rarely and the decision was mine alone

My answer would depend on how much work that I would need to do getting the lead AND then marketing the property. 

I do not normally discount my fee but I am open to anything as long as I can turn a nice profit and it does not take a lot of my time. 

Sounds like 2009. 

#3 is to do whatever is needed to help people ensuring it makes business sense to do so. 

A bird in the hand.....

Each case will be different . When i'm making $$ , I don't mind helping others !

2

I agree with Candice A. Donofrio 

I would look at each situation and its merits. A reduced fee may be in order if the sale will be quick and the property is not a hardsell. If it has problems it may need a higher fee. Just saying.

#2

This sounds like short sales. I might tally up 'the loss of income' on this niche & jump ship.  It's not working for 75% loss?

So what's wrong with 25% in your niche? You keep your financial integrity so to speak. Nix that 'ala carte' talk with your fees.

Thank you for asking a good question. I didn't do the contest.

I am not sure,  Need to see this contrest

 Maybe #2      I know a Broker who will sometimes discount his fee in exchange for X dollars up front, non-refundable.   If they can't come up with X dollars ("We just don't have it"), that Broker will refer them to another Broker who specializes in short sales.

I've never found such a niche but would be intriged to learn more about it if you would care to share. Honestly I am not sure if I would or wouldn't not come up with alternative pricing as a way of business.. somewhere there would need to be compensating factors to have that make sense. The overhead to properly market a house and the time invested would not be possible with a significant reduction in commission received without some offset. Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D 

I rarely work with distressed Sellers.

Contacts make contracts and also lead to referrals.  Keep on doing what you're doing.

Well Thomas since we had a full house of short sales/foreclosures way back when I honestly never want to deal with all that bs from banks anymore. The day I started turning them down was the day I made the decision to get back to a more normal cliental base. Never looked back.

We all do business differently at different stages in our businesses. I have a busy practice. But if I created a effective niche prodicing leads as you described, I propose an option #3.

Option 3 is 2-fold. 

1. Full fee for the 25% of those leads. I do.

2. A compassionate financial hardship program for the balance of 75%. To do so, I would design a complete program and system (like I did oin the short sale days), hire a younger agent with little to no business to work for me. Train this agent to my program and system in a NDA agreement, turn all those leads to this new agent. Manage from the top. 30% of the commission revenue to me.

If you can handle #2 and still make a good return, I say go for it.  The volume of listings will bring a lot of other full commission business.

#1 and refer out the others

I would need more information 

I agree with Kathleen.

I'd go with #2, Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D. 

Sounds like 2007 through 2012.  My fee for distressed sellers was never an issue. I worked hard, smart and got results worth more than what they paid. 

I would be creative to be as helpful as possible where is makes sense, but also need to be sensitive to the rest of my clients, and in cultivating my prospects. I am not a discount Realtor and don't wish to create that impression.