For Real Estate Sales Professionals

July 28, 2003 E-zine

July 28, 2003





























Read by More Than 30,000 Agents

Always be determined to become the
best real estate agent in your territory!

In this Issue:

1. It's Time for You to Get Moving!

2. Is This What We Truly Want Our Business to Be Like?

1. It's Time for You to Get Moving!

OK, here we go. When you began the year in 2003 you probably had an idea of how much money you wanted to make in your real estate business this year. You may have even written it down and made it one of your goals for the year. Either way, right now is a very, very important time for you to completely take control of your business.

Here's why:

Once we get to Thanksgiving, people normally are not very excited about moving from their home or place of business until after the first of the year. So everything you do to create and close business between now and Thanksgiving will be extremely, extremely important in determining how much money you're going to make this year. With that being said, you now have less than four months to both create and close the business that will determine the rest of your income in 2003.

The one exception to this is in the sale of investment properties. Since the sale of investment properties does not normally involve people having to relocate themselves when the transaction closes, the holidays can have much less of an impact on agents who specialize in selling these properties. The buyers and sellers of these properties are usually more concerned with:

1) Does the transaction make good investment sense?

 2) What are the tax consequences in closing the transaction before or after the end of the calendar year?

So unless you specialize in the sale of investment properties, it's now extremely important for you to get moving locating prospects, showing them properties, and closing transactions before Thanksgiving gets here. 

While 2003 may actually have twelve months in it, that last 30-45 days or so probably will find people in their typical "holiday funk," and putting off any major decisions or moves until after the first of the year. If you've ever prospected very much over the holidays, you may already be very familiar with hearing the phrase, "Check back with us again after the first of the year."

So what's it going to be? Are you going to rise to the occasion and do everything you possibly can to make the next four months as amazingly productive as possible in your real estate business? Or are you going to do something else instead?

One of these choices will have you feel much more thrilled with the year you've had in 2003 when the time finally arrives for you to celebrate New Year's Eve.

2. Is This What We Truly Want Our Business to Be Like?

There are reports I'm hearing from different agents around the country that are very disturbing to me. It used to be that listing agents and procuring agents always divided the commission from a transaction in a manner that was fair and equitable to both sides. But this just doesn't seem to be happening anymore...

In some sections of the country now listing agents sometimes offer procuring agents only a very small portion of the total commission being paid by the owner on a transaction. In addition to this these agents are doing this without telling the owner about it until the buyer is located and it's time to sign the documents to sell the property. And I'm sitting here right now thinking about how I'd feel as an owner of a property if I knew that my listing agent was doing this, knowing full well how this would impact the marketing of my property and the ultimate price that I might receive for it.

While in theory agents are not supposed to allow differing commission rates on properties to affect how aggressively they present these properties to their buyers, when you're looking at a procuring commission rate of 3% vs. 1% on two potential properties, one property just might be, shall we say, presented with more enthusiasm than the other one at times. It's one thing when as a co-op agent you know that the listing agent is sharing equally with you in the reduced commission. It's quite another when you feel that the listing agent is squeezing you and keeping the lion's share of the commission, when they were the agent who accepted the lower commission rate from the owners in the first place.

To illustrate what some agents are up against out there in this arena right now, here's a real-life story that one veteran agent recently experienced:

Dennis, a coaching client of mine, had a tough week about a month ago when he lost out on an $18,000,000.00 transaction that he really thought was looking good. At that time I told him that the most important thing he could do was master his state of mind, let go of the transaction he had just lost, and move forward in a total state of expecting that he was about to locate an even greater opportunity for himself and his client.

Well, in the next week, Dennis located a $20,000,000.00 investment that was perfect for his client. But what he then heard the listing agent say to him completely let the air out of his sails:

"Dennis, the total commission that the owner is willing to pay on this transaction is only 3 1/2%. Therefore, we're only willing to pay you a 0.5% commission as the procuring agent."

Needless to say, Dennis was stunned. But this is far from being the first time that I've heard about this kind of behavior from some of the listing agents in our industry.

While I can understand a slightly larger commission being paid to the listing agent at times to cover marketing expenses, offering only a small, miniscule amount of commission like this to the procuring agent is ridiculous. And what really concerns me here are the listing agents who accept a lower commission rate from some owners to get them to sign the listing, but they never tell the owners about their plan to then only offer the procuring agents a very small portion of the commission. The owner then only finds out about this when it's time to sign the documents for the sale. And at that point, the owners are so happy to be selling the property that they really don't care how the agents are dividing the commission.

If what we stand for as agents in our industry is serving our clients' best interests, then this kind of behavior by listing agents has no place in our industry whatsoever. It's the locating of the buyer that gives the owner of the property the best price they can possibly obtain for their property. Therefore, doing anything that could possibly impede the presentation of one's listings to potential buyers is outright wrong and harmful to one's owners as far as I'm concerned.

If you truly care about taking care of your owners please do not practice this kind of behavior as an agent. If you're going to offer a substantially lower than normal commission to procuring agents on one of your listings, please at least notify your owners of this before they sign the listing with you. In addition to this, if you feel that offering the lower commission to procuring agents will have any impact whatsoever on generating showings, offers, and the highest price imaginable for the owners' property, let the owners know about this in advance also.

Click here to visit my Web site. There you'll find many articles and previous editions of my E-zine to assist you in taking your real estate career to the next level.

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"After having been in business for over 25 years Jim has helped
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new levels."

Ross Thomas
Delphi Business Properties

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Jim Gillespie
Advanced Real Estate Sales Coaching
41890 Enterprise Circle South
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Temecula, CA 92590
(909) 694-6655

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