I’m going to suggest a few things you can do to get a better deal with your first broker. The relationship between a broker and an associate is not like the typical employer-employee relationship. That’s the first basic difference between a corporate-type job and selling real estate. You are not an employee. You are an independent contractor. Your new broker will not tell you what to do. He will guide or lead you to do what he believes will lead to your success. Let me tell you what they are looking for and what they are NOT looking for.
They are looking for someone who works hard. If you are a hard worker, let the broker know. Tell him how much you worked on your last job. They are also looking for someone who presents a good image. Any interviewer knows that what he sees across the desk today is as good as it is going to be. Men, wear a suit. Ladies, you know what the equivalent of a suit is. Dress. I’ve had people come to a job interview in jeans and a t-shirt. Who would want that person in their office even if they were selling a million a month?
If you have sales experience in other industries, let the broker know. Let the broker know that you want to be successful. This is no time for worry or modesty. Don’t leave them wondering if you’re up for it. Also, let the broker know that you can train. Most brokers are not looking for new ideas. They are looking for someone to implement their ideas. Make it look like it’s you.
Put a smile on your face. When you cross the threshold of the office, put on your best smile and keep it there until you get back in the car. I find it surprising how many people do not smile. Smile.
Broker looks for happy and optimistic people. Don’t complain, whine, or make excuses. I have interviewed many people who give me twenty-one reasons why they cannot be successful. The easiest thing to do is not to hire that person. Mr. Broker does not seek to contract torts.
Let’s say you’ve made a good impression and Ms. Broker wants to hire you. This is the important part.
A good question for Mrs. Broker is “How much money can I make here?” The answer should not be vague and ambiguous. The Broker should be able to show you what you have to do to earn a certain amount of money per year. If the broker asks you how much you want to earn, a good answer to that question is 150% of what you earned last year. If you earned fifty thousand at your old job, seventy-five thousand is a worthy goal for your first year in real estate. Mr. Broker should be able to tell you what to do to win it.
This may surprise you, but most real estate salespeople don’t work very hard. If you go to a reasonably good office and actually go to work, you can make an extraordinary income. You must learn to prospect. You must learn to present. You must learn to close. Find a broker or sales manager who can teach you these things.
A very important concept in real estate is that you will earn more money from real estate than from selling it. Look for a company with “influence on the list.” Your reputation and position in the community should help you get listed. Look at the franchises and don’t look for any franchises. Which is better? Who knows?
This brings us to the next question you should ask Mr. Broker. Write it like this; “If I sell (or list) a house for a hundred thousand dollars, how much will my check be?” Get this question answered in detail. Many brokers have hidden costs or fees, like transaction fees or franchise fees or whatever fees. This is not necessarily bad, but the best surprise is NOT a surprise. This is important. Use the same number each time. Don’t use $ 100,000 with one broker and $ 200,000 with another. Use the same number each time. Make sure you understand the answer to this question.
I assume you learned in your pre-licensing course how commission splits work. This can range from a minimum of 50-50 to 100%. No matter what they offer, ask “Can you do better than that?” That is a good question in any negotiation. If they offer 60-40, ask for 65-35. Many companies offer an internal bonus if you sell a company list or if your coworker sells your list. Ask about this and make sure you understand how it works. Some companies pay a bonus to the sales agent, but not to the listing agent. Some companies pay a bonus to both.
A good way to make sure you understand this is to read it in your company policy manual. Which brings us to another good question; “Do you have a policy manual? May I read it?” It is important that the company has a policy manual. If they don’t, the broker just creates the rules as he goes. It is important that they have a policy, but ask the broker “Do you have the authority to make exceptions?” Sales managers and brokers like me to believe that all rules are concrete and cannot be waived. Everything can be changed or excepted.
Here is an example. Ask your new broker to pay you 100% for referrals you send out of town. You can do this if you want. This is not expensive for a broker because most of their agents never send a referral. Maybe you never will either. If Mr. Broker agrees to this, he will earn more money if he does.
Ask Mrs. Broker to reimburse you for the cost of obtaining your license on your first check. We’ll see. He paid $ 220 tuition to the real estate school. He paid $ 105 to apply for his license. He paid $ 57 for his fingerprints. He paid $ 31 to take the exam. “Could the company refund this to me on my first check?” What if they say no to everything except tuition? You have that. Ask for. Funny about real estate brokers and their way of thinking. Most brokers are very reluctant to pay for an agent’s education up front, but will agree to reimburse you for the education after you’ve experienced it. Why not have that in your employment contract? This is the question. “Would you agree to reimburse me for the real estate-related education tuition I invest in myself?” Many will say yes. This will put some shekels in your pocket in the future. It will also help you decide to go see that hot shooting coach coming into town for fifty bucks a seat. Now all you have to invest is your time. This is also a good decision for the broker. An educated agent is a productive agent. Your broker will benefit from this as much as you will.
Find out who pays for advertising. Who pays the fees for the Board of Realtors? Who pays for E&O insurance? Who pays for the initial training? Don’t pay for initial training. The best surprise is still no surprise.
Here’s another great question. “When do I get paid?” In Florida, if Mr. Broker directs the closing agent to pay the seller at closing, the closing agent may deliver a check to the agent at closing. I like that. Another system is that the agent receives a check at closing made out to the company. The company then writes a check to the seller two or three days later. Ask the broker to pay you at closing. If the broker is reluctant to do that, make sure you know exactly when you will receive your check.
Here’s another problem you need to address; your own home or should I say your home (where you live). When you enter real estate, your income will most likely increase. Combine that with the fact that you are entering houses every day. You start to become an expert on what houses are worth. One day you discover a super bargain. You decide to buy it and move into it. Suppose the price is three hundred thousand dollars. He’s listed with a competitor in MLS at a six percent commission. And the commission? $ 300,000 X.06 = $ 18,000. Your company’s share is $ 9,000. Wouldn’t it be a good gesture if the company allowed you to have one hundred percent of that commission? Nothing keeps an agent working hard like paying for a big house.
Many years ago one of my students told me that he wanted to work for corridor A, who offered him a 60-40 split, but corridor B offered him a 70-30 split. He asked me for advice. I suggested that he make a deal with broker A that he would accept the 60-40 split if the broker agreed to pay him 85-15 on his third closing each month. Broker A was quick to agree to this because he was not expecting my student to sell three houses per month. After his second month in business, he never had fewer than three closings. You don’t need written goals if you have a deal like this. I had another student who made a deal with her first broker that the company dollar that she paid to the company would never exceed twelve thousand dollars. That means she would have to bring in thirty thousand dollars in a 60-40 split to maximize. The broker agreed with that. If you earn a broker $ 12,000 in a month, you are an asset to the business.
If you are interviewing a company that has a non-compete clause in their contract, just say NO. This is a clause that says that if you leave the company, you will not be able to work in the same industry with another company within fifty miles for two years. I stupidly agreed to this with a real estate school in my silly youth. I think that business lesson cost me about a hundred thousand dollars. I’m sure it cost me ten thousand five hundred in attorney’s fees. You will not be with this company forever.
Speaking of not being with the company forever. Since we know that one day you will leave, agree that when you leave, the company will pay you a 25 percent referral fee on any listing you leave behind. If you ignore all these tips in this article, implement it. I left a company once and abandoned thirty-eight ads. Do the math on how much money was left on that table. A broker will probably agree with this now. He would not agree to this after you have a bunch of ads.
This written employment contract will govern your situation for a long time. Take it seriously. As I mentioned earlier, nothing is done in concrete. As you start to do better and earn some money, you can always modify any deal. First of all, it is easier to make a good deal.
Good luck with your new career. Selling real estate is a great way to earn a living and make a difference. Work hard. Pay attention. You see a lot of people every day.