I was encouraged by Juli Vosmik, an AR member in Scottsdale, to create a blog expanding on the response I offered to her post, titled "Easiest Commission You Ever Made".
It reminded me of some poignant words offered by another awesome AR member - Mollie Wasserman. Mollie is the founder of the ACRE Training and Certification program - please check out what she does and what she offers. You will not be disappointed !
The ACRE business philosophy is something to behold - you can find it at www.TheConsultingTimes.com
There was a particular section in the ACRE Course material that came to mind when I read Juli's post and I did the old "cut and paste" (thanks again, Mollie - I hope this ends up turning on many more agents to your website & philosophy)!. I hope you will all do yourselves a favor and take a gander at the ACRE business perspective. I think it will give you all a cause for pause.....and will put a little spring in your business step after reading it.
Here you go.....pull up a chair, put your feet up and be prepared for some mind-expanding thoughts - there is LOTS more at www.TheConsultingTimes.com (again, thanks Mollie Wasserman!!!).
IF, AS AN INDUSTRY, WE ARE MAKING SO MUCH MONEY...
How Come We're Not All Driving Bentley's?
Yet, the question that we hear more and more from consumers these days is: "Why are commissions so high?" Justifying our commissions to the public is getting more and more difficult.
If you have ever had to explain to a consumer what exactly they're paying for when they pay by commission, you may have struggled with an answer that makes sense.
The fact is that when a consumer pays a real estate commission when their transaction closes, they
are not simply paying for the services rendered to them on that transaction. If they were just paying for the services themselves, they could have paid a lot less, while still providing their agent with generous compensation.
Here's the real scoop: commissions have little to do with compensating an agent for time and services.
Commissions are all about mitigating risk. Until we, as an industry, are willing to call a commission what it is while providing choices to the consumer, we will continue to see our compensation erode and our value undermined.
Unfortunately, when we go to our managers and brokers, they are often of little help.
Overwhelmingly they just instruct us to tell the consumer how much we do for them. Certainly we can all agree that much of the public has no earthly idea how much work is involved with helping a client buy or sell a home, but trotting out a list of the "450 Things That an Agent Does" misses the point.
In fact, we did ourselves a huge disservice when we began publishing "lists of activities" that an agent does. What we are telling the consumer is that they are compensating us for "activities".
And virtually any reasonable person could look at that activity list, compare it to a commission check, and wonder "what's wrong with this picture?" The reality is that many of those activities could be done by the consumer, aided by technology, or not done at all.
Other activities may need to be done, but do not need to have a "premium" price tag attached to them. The point we're trying to make here is that commissions are not what they are because of activities ... they are what they are because of risk!
When a consumer pays for real estate services by commission, they are in fact paying a premium for a
specific outcome and the "insurance" that if they don't achieve the desired outcome, they pay nothing.
In other words, the commission system follows a basic rule from Economics 101: high risk must be paired with high reward.
) freezing waters known as blogging. I envy all you daring souls! I need to just keep reminding myself to "Jump in, the waters fine"!
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