Why Owners Don't Really Care About Cheap Fees (And What They Really Lose Sleep Over!) (8 minutes)
Contrary to popular belief, most property owners don't actually care about cheap fees.
Only a small percentage of C-Class landlords are focused on finding the cheapest agent. In reality, 95% of owners prioritize quality service, peace of mind, and reliable property management over saving a few dollars.
They worry about getting a bad tenant or rent not being paid, not about finding the lowest fees.
This article breaks down why owners ask for discounts and how negotiation is simply part of the real estate game.
Learn how to confidently justify your fees and charge what you’re worth today!
One of the biggest mindset blocks we often hear from agents is, “But Darren, owners only care about cheap fees. I can’t charge more.”
This is one of the major hurdles holding agents back, but let’s break this down because it’s simply not true.
The ‘Big Buts’ in Property Management
We hear plenty of excuses, or ‘Big Buts’ that hold agents back from charging what they’re worth.
The idea that owners only want cheap fees is a big one that comes up time and time again. But I want to show you why this is false, and how most owners are really focused on something else entirely.
- Standard Marketing Fee This fee covers the costs of listing properties on portals. In Australia, you’re likely familiar with the two major portals that charge fees. New Zealand has its own marketing portal costs as well. Make sure you’re covering those costs, and if you haven’t updated your fee recently, ensure you’re adjusting it, as portal charges tend to increase on a regular basis.
Don’t forget to factor in any additional marketing efforts, such as Facebook or LinkedIn campaigns. Always check your local legislation to ensure you can on-charge these costs. - Professional Photos If you’re taking professional photos for listings, you should be charging a fee to cover those costs. It’s a straightforward service, but make sure it’s reflected in your fee structure.
- Video Walkthrough Fee Offering video walkthroughs is becoming increasingly common. If you’re walking through the property with a camera or phone, narrating as you go, that takes time—editing and uploading included. You should be charging for this service, and the suggested fees are detailed in the book.
- Virtual Tour Fee Using high-tech tools like Matterport or 360-degree cameras to create virtual tours can be time-consuming and require expensive equipment. This is another service where you should be charging a fee for the value you provide.
The Reality: Only 5% of Owners Care About Cheap Fees
Yes, there is a small percentage—about 5% of owners—who really do care only about cheap fees. We call them C-Class landlords. You know who they are:
1. They’re over-demanding and unreasonable.
2. They waste your time with endless frivolous requests.
3. They want above-market rents.
4. They want fee discounts and complain about your fees.
5. They won;t invest money back into the property with upkeep and repairs.
6. They have a crap property that attracts only a crap tenant.
7. They often own low-rent properties that yield little profit for your business.
You don’t need this kind of business, and you shouldn’t chase these types of owners. They’re not worth the headache. Fortunately, 95% of owners aren’t like that.
What 95% of Owners Truly Care About
Most owners aren’t losing sleep over finding an agent with cheap fees. They’re not thinking, “I hope I find the cheapest agent tomorrow!” Instead, they’re worried about something else entirely.
They’re losing sleep over:
• Getting a bad tenant who won’t pay rent.
• Rent not being paid—because they need that income to cover their mortgage.
• The condition of their property not being maintained.
When owners come to you, it’s because they need peace of mind. They believe a quality agent will take care of their property and solve these problems. If they thought they could do it better themselves, they wouldn’t hire you at all—they’d save the money and do it themselves.
So Why Do Owners Ask for Discounts?
You might be thinking, “If owners care about peace of mind, why are they always asking me for discounts?”
Here’s the truth: Negotiating fees is part of the game in real estate. The same owner who pressures you for a discount doesn’t ask for one when they’re at the supermarket or going through the McDonald’s drive-thru. Why not?
Because in those environments, charges are non-negotiable.But in real estate? It’s standard practice to negotiate.
Think about it—when you buy something on Facebook Marketplace or go to a second-hand car dealer, you’re going to ask for a better price.
You probably wouldn’t pay full price for a t-shirt at a market in Bali or Fiji without haggling a little first. That’s the culture—and real estate is no different.
The Game of Negotiation
Even though owners are primarily concerned with finding a quality agent to manage their property, they’ll still ask for discounts. It’s part of the process in real estate.
You just have to be good at the game of negotiation. When owners ask you, “But the other agent is cheaper” or “Can you match the management fee down the road?”, they’re simply playing the game.
The Proof: What Owners Really Want
We ran a poll in an investor group a while back, and I’ve shared the results in my book Win Your Worth Secrets (you can get the book for free—just pay for shipping at winyourworthsecrets.com).
We asked owners, “What’s the most important thing when selecting a property manager?”
Option 1: A quality, reliable property manager.
Option 2: Cheap or cheaper fees.
Now, early on, someone added a third option: “I want both—quality and cheap fees.” Fair enough, right? A few more options came in about wanting agents with specific traits, but all of those could easily be grouped under option 1: quality, reliable agents.
In the end, 90% of respondents chose option 1. They want a quality, reliable property manager.
Cheap fees were not their priority. Not even close!
Your Value: Managing High-Value Assets
Most owners have properties worth $700,000, $800,000, or even $1 million or more. They’re looking for someone they can trust with their high-value asset, not the cheapest agent they can find.
But here’s the key: You need to get good at justifying your fees. When owners play the negotiation game and ask for discounts, it’s your job to confidently explain why you charge what you do.
Get Good at Handling Fee Objections
In my second book, PM Fee Scripts Secrets, I go through 51 fee objections that agents may face and give you the scripts you need to handle them effectively.
If you want to stop discounting and start charging what you’re worth, you need to get good at answering questions like:
• “But the other agent is cheaper.”
• “Can you match the management fee down the road?”
• “My Sydney property manager only charges X.”
Owners Want a Quality Tenant, and a Quality Property Manager
Here’s the bottom line: Owners don’t care about cheap fees. They care about finding a quality agent who will take care of their property, give them peace of mind, and manage their valuable asset.
You just need to learn how to play the game of negotiation—and we’ve got all the tools to help you with that.
Get the PM Fee Scripts Secrets book for free (just pay shipping) at stopdiscountingfees.com, or check out all of our books and podcasts at igtcentral.com.
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