"No. My fee for this project is X. I can do X."

There are a gazongagillion clever comebacks and platitudes and they've all been said before.

I'm willing to walk.

As soon as they stick their hand in my pocket I know they won't stop there.

Knowing your value before going in, helps. I discuss the details of my marketing and advertising plan to get the property sold rather than sticking a sign in the yard, uploading pics to the MLS and leaving it at that.

I just turned down a $MIL+ listing because the seller discarded the opinion of market value, wanting to overprice and was not motivated one bit.

First, what Seller?  A seller who has only one house listed (or about to be listed) with me?  Or a seller who owns two dozen single family homes and  several apartment complexes?  There are economies of scale to consider.

To your question, here is my reply to the Seller:

            "You say you want me to reduce my commission.  Tell me more... what do you have in mind?"    

Time in real estate can certainly teach and show us lessons.  The possible answers may be endless but here are two that immediately come to mind:

No but thanks for asking.

Which part of the house, will be mine?  Title-wise.  

Which of my services are you willing to give up?

I smile and politely say no. If they keep asking I ask which part of my services they'd like me to eliminate for a lower fee. Usually their answer is none... and that's when I tell them that's why I can't lower my commission.

No. Since the majority of our business has been referrals this question doesn't typically come up.  If it does it's a No.  And we move on with the conversation.  If they continue, well, then most likely it's not going to be a good fit.

Well once when I was asked by a paving contractor who did commercial jobs because his home sold "so quickly" I asked him if he got a Walmart parking lot paved 2 days ahead of schedule if he discounted the price?  He understood.  You have to break it down to a language they understand.... their paycheck.  

I do discount for 2nd transactions with seller/buyers.  Never first, but always second.  If they buy first it's on their sale.  If they sell first then I legally rebate on their purchase.

I have a number of responses -- many already given here.  But in most cases (not all) I say, "no".  I am all about negotiating, but it has to be a win / win.

I've only ever been asked once when a Seller considered an offer at a price lower than suggested and he asked then for a reduction in my commission.  I said, by accepting this lower offer, my commission is automatically reduced.  End of discussion.

Some sellers just think they have to ask that question. I wonder what they would say when their employer asked them is they would agree to lower their hourly salary. For me, it's case by case. A handful of sellers had legitimate reasons for asking for reduction. Could be they were breaking even on sale, or didn't enough have cash on hand to bring to closing if that situation occurred, or some other family emergency.

Typically, the commission discussion is handled upfront & then inked. We are done here. Now, let's consider what it takes to close a successful escrow. In that realm, we are all after results above all. If & when approaching the "razor's edge", the place where it can get dicey, & mind you it is all human nature propelled & not necessarily, dollars, fairness or common sense, a pro is always viable & flexible in the professional realm & not in the arena of being squeezed, taken advantaged of or put against the wall. We will know what it takes as we enter the wind tunnel. Proceed from there. It is wise to always remember that all Real Estate is negotiable. All must answer

Of course I've been asked Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets and I have given in on rare occasion but it had to be a very good reason.

Mike Ferry had a great response for this: "No.  Next question."

There is always the "I'm worth it and if an agent doesn't fight for their value, what makes you think they'll be good at fighting for your home's value?" as well as the "No, our office does not allow it" but that one is harder to do if it's your own company.

Then there is the conditional way of handling it. "If I bring the buyer, I'll drop my commission to X" or "If we get into escrow for X less than list I'll drop it to Y."

And in the famous words of Michael Jacobs "it depends".  Are they asking you to take a 0.1% haircut or a 95% reduction?  How sellable is the house?  How hot is the market?  How badly do you want that listing (as in are you trying to break into an area/type of property and this house is the key to it)?  What is the likelihood of getting referrals?  Will they be buying with you as well?

I have not been asked to reduce my commission in years.  

The last time it happened, was during a meeting with the seller at the property.  Based on the consultation call I had with the seller prior to the meeting at the property, I was not surprised when he said: 

"I met with another agent who said they will do it for $X."  And. And. And. (terms).

Given I already knew we would not be a good fit, and I did not want to list the home, I thanked him for his time and the opportunity.

I let him know there was no way on God's Green earth I would ever list a home for $X or on the And. And. And. terms. 

Several hours after leaving the meeting with the seller, his sister called and attempted to engage me asking if they could hire me as a consultant because they knew the other agent did not have the knowledge, training, and experience that I have. 

I explained I only consult with my clients.  As I explained to your brother, we are simply not a good fit. 

There can be many responses. One simple definitive one might be "I'm sorry, I am not in the position to do that; this is my fee". End of conversation, no engaging in justifications or discussions.

I usually give an example; telling them they will most likely eliminate the very best Buyers in the market place from seeing the property: a RELO, third party corporate Buyer who needs to Buy right away. The Buyers agent will determine which houses they will see. That agent will also be paying a 35 to 48% referral fee to the RELO Company before they split $ with their Broker. I also tell our agents to blame it on the Broker, you need permission before a reduction is made and the Seller will give in most of the time.  

The only time I've ever discounted my commission was when the Client signed a BRA agreeing to purchase another house at the same or greater price level and they received the discount at that time - not on the sale of their house listed with me!

That way to me it's a Win-Win...

If they say my house will be easy to sell:

That's great! Rest assured I'll do all the same work to market and sell your house just as I would any other house. When I know a house is going to be more of a challenge or take longer I have to increase my commission. (and I have a few times)

From the lending perspective, we often have to provide the sobering news that the home value opinion (as determined by a 3rd party licensed & objective Appraiser) differs from the estimate of our Borrower and/or Agent.

When speaking with a Consumer, I recommend simply going by the comps (recent, closest proximity, and like-kind features), and then compare/contrast to formulate an estimated value. As Realtors, you folks can then lace in a bit of "supply & demand adjustments" (including time on market) to adjust the perceived value range. 

Ultimately, you can still lose the client due to them chasing a different Realtor who told them what they wanted to hear (happens all the time to us on the lending side). Maybe lay a trap and say that "you are likely to have an uncomfortable conversation soon with the other Realtor about your home's value...not that I'm wishing it upon you, but WHEN it happens, please do not hesitate to re-engage with me and I'll help you finish up your sale"

My monthly goal has always been to write a minimum of 5 figures per month 

I don’t lock into making decisions on anyone house/ decision , but look at where I am monthly . I also look to see if it’s more than one property( sell&buy) . I worked heavily in Corp Relo for years and paid many 25-35% referral fees to work with corporate clients. I always looked at how much I was making ( not how much I was giving away to do it ) 

Another approach is “ My Marketing is what’s gonna sell your house . We don’t want to hinder it . Where I. CAn work with you is on the Buyer side . If I would produce the Buyer also for your home , I could do it for $_______ on the  buyer side of the transaction . “ We all know how unlikely that we would actually do a Double Bubble on the Listing.

I have learned not to give that knee-jerk response, and first ask what the client is looking for.  Because we automatically assume they are looking for a deep discount, and sometimes they are just looking for 'some' flexibility.  So an open conversation is worth having.

I typically tell my potential sellers something along these lines:  You know, when I was a new agent, I readily admit that I wasn't worth my full fee, and I offered a discount to my clients.

Today, Using me, you will realize more money with me at my full fee,  than the average agent at discount.  They might be willing to discount their fee, but it's because they recognize, as I did when I was new, their own value.

If someone asks me to reduce my commission, I tell them that I have a minimum wage and there are already getting in at the low end of that. I am pretty blunt about saying "no".

Yet.., one time not too long ago, I helped a young couple buy a condo to live in. Less than a year later, their marriage failed and they sold. I offered them a lower commission so that they would not be losing too much due to the short time they owned the property. Funny thing is, our market was so crazy that they still made a small profit.

I don't take listings so I've never been asked to reduce my commission by a seller.

Sure, how much would you like me to reduce it? If I cut a point and it represents about a third of my compensation will you reduce your price by a third so my Jobe will be easier?

Never had anyone say "yes". Always wondered why, ha, ha!

I tell them that when I am hiring a professional I know that value of hiring the best.  With that in mind I never hire the lowest bidder, and would never hire someone that cannot defend their own paycheck as I know that they would be a terrible negotiator for my property.

Many respect this and pay our higher than usual commission others hire a lesser agent.  Many come back to us after it expires.

This is rarely a question that I get since most of my business is referrals and previous clients. If/when the subject comes up, how I respond depends on various factors so there is no one size fits all answer. I think it's important not to have canned responses for topics such as this but rather handle the question on a case by case basis. 

I would explain how commissions are shared and let them know what I do on their behalf for the money.  I know that it is competitive out there so just saying "no" isn't enough anymore.