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2. Surveying Your Right to a Full Commission

When I began working as an agent more than 25 years ago, I was soon taught the importance of getting face-to-face time with one's clients and prospects. This is very important as a good agent will often solidify their relationships with people at a much deeper level the more time they spend with them personally.

But with respect to prospecting and staying in contact with people both in person and by phone, there are often certain limitations that come into play. First of all, you only have so much time available as an agent. And if you have 2,500 prospects that you'd like to do business with, it's not easy to have one phone call a month with every one of these people, and even one phone call every three months will be difficult.

And when it comes to actually meeting with these people on an ongoing basis, there's no way you're going to get that coveted face-to-face time with every one of these people on a regular basis. In fact, you normally wouldn't even be able to do this with everyone over the course of a year.

Even if you could talk with or see these people every month or every quarter, you'd drive some of them crazy while doing it. If some of them don't anticipate having any real estate needs for years to come, and if you call them or drop in on them every month anyway, you'll probably do more to drive them away from working with you than you'll do to have them want to work with you.

So what's the solution? Well, sending mail is definitely one solution. You can send two mailers a month to people and most of them will simply think you're doing good business marketing. Plus you'll keep your clients and prospects constantly thinking of you.

But what about sending market updates to your clients and prospects via audio and video in your E-mails? This goes even a step further than mail because it brings them closer to a real life interaction with you by hearing the sound of your voice and/or watching you move and talk on video.

Just imagine for a moment that you're sending an E-mail to your clients and prospects once a month or once a quarter with an audio update on what's happening in your market. In this example I've chosen to give an update on the industrial properties market in Central Los Angeles because that's the territory I worked in as an agent for many years.

So the E-mail you might send to your clients and prospects could look something like this:

Dear Bob:

To listen to my 45-second audio update on 2nd quarter activity in the Central Los Angeles industrial market, please click on the following link while listening with a high speed Internet connection:

http://audiopostcard-001.com/Y.asp?6106574X1166 

Jim Gillespie

You can probably see how sending an audio postcard like this one brings people one step closer to feeling they've interacted with you. Whether or not you and I already know each other, through listening to the sound of my voice it's as if we've just had a live interaction where I told you about the latest trends in the market. And you can reach hundreds or thousands of people with this technology when you can't talk or meet with every single one of them. In addition, you can customize your audio postcard with pictures and images if you'd like to, similar to designing your own custom postcard.

When you click on the blue link in the audio postcard, it sends you to my own home page as I've been a full-time trainer, coach and consultant for the past 8 years. But I wanted to give you an idea of the kind of link you could create for your people on the audio postcard as a full-time real estate agent with access to all the data in your marketplace. (For more information about sending audio postcards click on the link at the bottom of the postcard itself.)

Now if instead you'd prefer to send a market update to your people by video, you might send an E-mail to your clients and prospects similar to the following:

Bob:

To see my one-minute video update summarizing the activity in the Central Los Angeles industrial market in the second quarter of this year, please click on the following link with your high speed Internet connection:

http://tiny-link.com/vs.asp?h=6972842697XFPFBG&l= 

Thanks.

Jim Gillespie

The video above was taken by me in my home office with the Logitech Orbit Webcam. The price online and in stores for this Webcam runs from about $95.00 to about $140.00. And the process of recording the video and linking it to your E-mail is very simple. (For more information on this you can click on the video image of me after you've watched the video.)

In terms of utilizing this technology in your own business, you need to use your own judgment as to how many of your clients and prospects are currently using high speed Internet connections. Most companies nowadays utilize high speed Internet connections in their offices, but not everyone has a high speed Internet connection at home. A lot more people will be adding high speed Internet in their homes within the next 1-2 years or so, so you may want to provide these people with an alternative in your E-mail to listening to your voice or watching your video. Consider adding a link within your E-mail to a written report or newsletter on what's happening in your marketplace. This way you'll truly be speaking to everyone who opens and reads your E-mail.

With today's technology, you're offered some great opportunities to connect with people like you've never done before. When they watch videos of you throughout the year, continually updating them as the top expert in your marketplace, they'll begin to feel like they know you a lot better than before. And when people feel they know you better, and feel like they've been face-to-face with you on an ongoing basis throughout the year, they're one step closer to choosing you as the agent they'll close their next transaction with.

Click here for downloadable E-books and live audio interviews with top-producing real estate agents. These interviews are with industry experts who show you exactly what they do to continually make hundreds of thousands to millions of dollars a year.

2. Surveying Your Right to a Full Commission

So much has changed in our industry over the past several years. And with these changes has come a downward pressure on commissions unlike anything we've ever experienced. While the market's been hot for quite sometime now in many different areas, the sizzle has created a desire in many people to reduce or eliminate commissions whenever they can. And this in turn has caused a great many agents to feel very frustrated.

What's both interesting and understandable is that so many principals feel that offering lower commissions will cause no negative impact on the ultimate price that they'll receive for their property. While this may be true in areas where 6% is considered a full commission by agents, and the owner is offering a 5% commission, it certainly may not be true when the owner is offering a commission of only 4%, 3%, or less. The problem, though, is that owners normally don't recognize this. They're so focused on saving on the commission that it can become the literal manifestation of the metaphor about being both pennywise and pound-foolish. And in this situation, a real estate owner can end up losing a lot more money by selling their property for less than they may have received had they offered a more reasonable commission in the marketplace instead.

In a market where owners may be thrilled to have two or three buyers to negotiate with, they might not realize that they could have had 5 or 6 buyers instead if they had offered a full commission or close to a full commission to all the agents. If an agent has three properties they can present to a client, two of which offer to pay them a 3% co-op commission, and one that offers them only a 1 1/2% co-op commission, in what order do you think the agent will submit the properties to their client? And if the client makes an offer on the first or second property before seeing the third one, the owner of the third property may really miss out.

So what are agents supposed to do about all of this? Unfortunately, telling owners that they may be costing themselves money by offering a substandard commission for their properties is usually not something that owners will believe. They tend to think that it's just a bunch of hot air. So instead, how about conducting a survey of the agents in your area and asking them their opinion on the matter? Or even better, maybe your real estate association will want to get involved in conducting a survey of all the agents in the area. Do you think maybe that some of the agents have an opinion or two they'd like to express about this reduced commission environment?

As an example, agents can be asked what their interest level will be towards showing a new property on the market based upon the offering commission rate from the owner. The survey could ask them whether they'd show a property to one of their prospects if the offering commission was 5%, 4%, 3%, or 2%. The agents would have one individual response for each level of hypothetical commission being offered. You could even include half percentage commission levels such as 4 1/2% and 3 1/2% also if you thought it would bring value to the survey. And in addition, you might ask these same questions multiple times on the survey within different price ranges of properties. For example, more agents may be willing to show a $1,500,000.00 property to their clients when a 3% commission is offered, as compared with the number of agents who may be willing to show a $500,000.00 property at a 3% rate. And if you believe it's even more relevant, you may want to structure the survey based upon the commissions being offered on properties to the co-op agents in the marketplace, as the commission the listing agents will be earning themselves may have no impact on a co-op agent's desire to show a property. Co-op agents are interested in the commissions they'll get paid by successfully closing transactions on properties, not the commissions that the listing agents will earn and get paid.

And if you're a buyer or tenant rep agent working with clients on an exclusive basis, and your exclusive agreement calls for your clients to make up the difference between the commission being offered by the owner, and the commission you and your client agreed would be fair for their transaction, what I've been discussing here may not be relevant to you. You're going to receive the commission you and your client agreed to no matter what commission is being offered through the listing agent. But unfortunately most agents aren't operating with these agreements in place.

And if you're wondering whether or not it's fair for you to not work on properties that only offer low commission rates to co-op agents, here's a quote from Florida real estate attorney Hank Sorenson on the subject:

"Obviously no business should be required to represent clients at a loss, and having brokerages continue to work for ever-decreasing commission schedules will cause, at some point, a loss to be sustained by the brokerage and/or agent because of the reduced commission schedule. Therefore, it is up to the individual brokerage or agent to determine when they are potentially going to cross this line, which will result in the agent not showing a specific property solely due to the cooperating compensation offered in the MLS."

As mentioned above, Hank practices real estate law in Florida, so it's important that you check with your company, your real estate association, and the authority issuing your real estate license to make sure that you're practicing both ethically and legally in your area.

And once you have the survey of the agents in your area completed, you now have a document you can show to property owners who insist on offering a reduced commission in the marketplace. So when you hand them a document that says that 92% of all agents surveyed in the area will show a property if it's listed at a 5% commission, but only 36% of those same agents will show the property if it's listed at only a 3 1/2% commission, you now have more leverage.

When you let the voices of all the agents in your area speak for you collectively it might just make your job a little easier.

Click here if you'd like more information on my one-on-one coaching program to take your real estate productivity to the next level. One-on-one coaching is available for both real estate agents and company management.

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