DESTROY THE BENCHMARK

Early in my career, I thought I had a breakthrough strategy: destroy the benchmark.

If success in brokerage is driven by inventory, then the fastest way to win is simple: get more listings than everyone else.

The top brokers I spoke to had:

300+ listings

The very best broker? Around 800 quality listings

Not all are direct, some are co-marketed. But with that scale, probability works in your favor.

So I asked: how do I get there faster?

The idea: Lower the commission.

Typical market practice: 3% to 5%.

So what if we offered 2.0%?

More attractive to owners = more listings = more deals. And to be clear, there is no law dictating commission rates in the Philippines, only practice. So the idea was NOT illegal.

We ultimately didn’t push through. My partners stepped in and stopped it.

Ten years later, I now understand why it wouldn’t have worked.

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1. Volume kills efficiency

More listings mean more inquiries, viewings, and coordination.

Without a strong backend to handle hundreds of clients, you OVERLOAD.

Missed calls. Slow responses. Fewer closed deals.

2. Brokers won’t cooperate

Real estate runs on broker networks.

How do you know if someone inquiring about your P800 Mn Makati property is a legitimate buyer? Often, because another broker vouches for them.

Now look at incentives:

2% commission equals 1% per side

5% commission equals 2.5% per side

Which listing would brokers prioritize?

By going down to 2%, you WILL kill your distribution.

3. You lose your final lever

When buyer and seller reach a deadlock, what closes the deal? The broker adjusts commission. If you start low, you have no room left to move.

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What Actually Works

Brokerage isn’t a commodity unless you treat it like one.

Compete on price and you:

Attract low-commitment clients

Weaken broker cooperation

Compress margins

Limit your ability to close

Instead:

Improve service

Strengthen your network

Build trust

Final Thought

The better question isn’t how to lower your commission.

It’s how to justify a higher one.

Interestingly, a brokerage firm tried offering lower rates. They were ridiculed by the industry and eventually reverted to the standard 3% to 5%.