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Where do You Draw the Line with Clients?

By
Education & Training with Glasswork Media Arts

Where do You Draw the Line with Clients?

Had a interesting conversation with a colleague the other day and it made me wonder what my AR friends think on the subject. The conversation revolved around  listing mobile homes, leases etc. They were saying that they don't take any listings like that, and I thought, really, in this market should you be turning away business?

Then I thought ALOT more about the conversation over the next few days and two very distinct things hit me;

First

    1, Business wise I do not believe in turning away "any" business, who knows what the parents of that young couple that can only afford a mobile or inexpensive property owns. Who knows who is in their sphere of influence, and what about the future? What are you going to do when that young man or woman finish school and have 5 or so years of work under their belts and want to upgrade to that next level of home ownership, are you going to say, oh okay now you are talking about a reasonable amount of money I am willing to work with.

THEN

    2, Morally I just cannot agree with turning away business because the dollar amount is not enough. Many of you know that I advocate being up front and honest with our clients and have no problem with talking about commissions and showing our checks on AR, BUT I have a problem if  someone can't see it in their busy day to assist clients looking for that starter or low priced home. I guess that is just me and how I do things, or how I look at things. My real estate mentor taught me a client is a client, is a client. Never ever judge a book by it's cover or by it's dollar amount. That approach has worked well for me in both my business AND my moral approach to real estate.

In Summary

I think we owe it to our communities to assist all levels of homeowners find their dream home. Home ownership has many levels, and it should not be defined by dollar amounts. I have always been one who could distinguish between a bad neighborhood and a poor neighborhood, they are not the same thing and should never be confused.  I will continue to treat all of my clients with the same level of respect no matter what their version of "dream home" is.
But that is just me, what say you my AR family?

Comments (58)

Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

I'm a Realtor and if someone calls me for my services....I provide it....the day I turn business away, will be the day I'm retired.

May 12, 2011 05:33 PM
Mike Mayer
Mike Mayer, Broker/Owner - i List For Less Realty, LLC - Lafayette, LA

I have an opposing view, Gerry. In my market, mobile homes can be VERY difficult to sell. There are very few lenders who offer loan packages on this product. I am not opposed to providing services to entry-level clients, however, we're business professionals. The deal HAS to make financial sense. That is why why there is such a division and specialty-niche markets within our profession.

I couldn't agree more with your comment that, "I think we owe it to our communities to assist all levels of homeowners find their dream home. Home ownership has many levels..." Sometimes that "assistance" is provided in the form of a referral to an agent(s) or firm(s) that perhaps specialize in a market I may not service.

May 12, 2011 05:37 PM
Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate

I feel it is all part of the job and service that the public is entitled to...Also, leases eventually could turn into a future sale, or at least referrals.

May 12, 2011 07:12 PM
Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566
I refer out rentals and mobile homes to focus on home sales. You raise a valid point about the SOI, though.
May 12, 2011 07:17 PM
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

This is great how much discussion this generated. As I stated numerous times in the post, this is just how I look at it, and what I know this post did was make people reaffirm their particular business plan, whichever side of the issue they fell. That's the beauty of AR, it gives us the opportunity to disagree and in that, we become a little more clear on where we want OUR business to be going. 

May 12, 2011 11:30 PM
Irene Kennedy Realtor® in Northwestern NJ
Weichert - Lopatcong, NJ

Gerry,

I agree in principle but cannot afford to invest time with no potential for reasonable compensation.  For inexpensive listings, I can do a flat fee as commission.  For buyers, I do offer the same but few are willing to give compensation from their own pocket.  My personal decision is not to spend days touring potential homes and then handle all the inspections and closings when I won't even net $10 per hour...

May 13, 2011 12:12 AM
Jim Lee, REALTOR, CRS, ABR
RE/MAX Shoreline - Portsmouth, NH
Buying or Selling? Ann & Jim are the local experts

 

I have no problem helping buyers in most any price range but the reality of it is that there are not very many inexpensive houses in my market area.

And I agree with Irene above, I'm not working for 10 bucks an hour gross and paying my expenses and taxes out of that.

May 13, 2011 12:30 AM
Tim Fennell
The Legends of Real Estate, REALTORS® - Jacksonville, FL
Jacksonville Real Estate

To each his own - there are various different business models and strategies.  While we (Susan and I) do not turn down business based on price, we don't deliberately choose to put ourselves in a position in which we see little chance of making a return on our time and expenses, either.

Real estate brokers are not social workers, they are business entrepreneurs.  I see nothing morally wrong with choosing to work niche markets.

May 13, 2011 12:42 AM
Dawn Maloney
RE/MAX Trinity Northeast Ohio Real Estate Specialist - Hudson, OH
330-990-4236 Hudson & Northeastern Ohio

No, this is not the proper perspective. I don't work with mobile homes because of NEAR IMPOSSIBILITY OF FINANCING and LOSS OF VALUE. They are like selling used cars. I won't even take them for a personal friend.

And as for tenants? Well, just had one call and tell me they found a nice house without me, and we are still friends, right? I'm still deciding on whether to continue with those looking for leases.

No, sorry, it is not about price point. It is about time invested and return produced.

Am I too "good" to work with these types of clients? No. They are too unprofitable for me. I will leave that aspect of business to someone else who finds it valuable.

It is a disservice to my family to take these unappreciative and time-consuming clients.

May 13, 2011 12:56 AM
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

Irene, Jim, Tim & Susan, I completely agree that Realtors are not social workers, that is not what I implied. If the transaction is not going to make you enough money in your mind not matter if you calculate by the hour or % that is one thing. However, my point in the post was that I disagreed with turning business (any business) away based on the fact that the dollar amount was "beneath" you. You mention $10, what if that amount was $11, or $12 would that do it. Hence the question "Where do you draw the line?" 

There is no right or wrong answer, the answer is how YOU choose to run YOUR business. This would be a great live discussion. 

May 13, 2011 01:18 AM
Tim Fennell
The Legends of Real Estate, REALTORS® - Jacksonville, FL
Jacksonville Real Estate

Gerry,

Because it is difficult to accurately determine what 'hourly' amount will be realized at the end of any given transaction, we tend to "draw the line" with our gut based on past experiences.

Is there a dollar amount that is "beneath" us?  Sure there is... everyone I've ever known has believed that they bring a certain minimum value level to any business and as real estate entrepreneurs, we are no different.

I think the statement in your post that grabbed my attention was, "Morally I just cannot agree with turning away business because the dollar amount is not enough."  I don't imagine that you were making a moral judgement on anyone other than yourself, however I don't think this is a "moral" issue whatsoever... I see it as a business decision. 

May 13, 2011 01:33 AM
Martha Brown
Long & Foster Real Estate, Inc., Annapolis MD 21403 - Annapolis, MD
Your Homes Around Annapolis Agent

Gerry- I agree. There is no right or wrong answer here. We all have our own thoughts as to how we want to run our business. That is what makes selling real estate such a wonderful business to be in. As a business owner I can establish my own business model and as long as it is ethical and does not cross fair housing lines I am good to go. To each there own.

May 13, 2011 01:36 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I wish I could work with every lead that comes my way but it is impossible.  I burnt myself out trying several years back. 

I have to work what makes sense for me and what is the best ROI in terms of average hourly wage.  I think everyone needs to sit down with a business plan and really think about what works for THEM.

I do BPOs, rentals, buyers (over $80K) and standard listings (even under $80K). It doesn't make sense for me to do short sales or work with $20K buyers because I don't have systems for those.  Some people have $20K buyers systemized and I refer those out.  Some people have short sales systemized and I refer them out.

If I sold a $20K home and let's say my commission $600 (just pretending with numbers here).  I paid $100 in gas to show homes = $500.  Government takes 25% of that $500 = $375.  Luckily I am at a 100% brokerage and can pass my flat fee to the client that I have to pay brokerage in the end. Spent 60 hours writing multiple contracts, showing homes, attending inspections, negotiating, phone time and managing paperwork.  I just made $6.25/hour. YAY ME! 

I can pump out 3-4 BPOs in one hour at $50-80 each or spend an average of 2 hours on a rental that will bring in $300 on average.  I get great referrals from my rental clients also and many do turn into buyers a couple years down the road.  Tell me where I want to maximize my time to get the best ROI?

May 13, 2011 04:01 AM
Ken and Leslye Huebsch
3x Individual Agent of the Year, Luxury Homes, First-Time Buyers, Residential Resales, New Construction - Harrisburg, PA
Realtors - Harrisburg Homes for Sale 717.514.1793

I completely agree. Remember, we were all young or just starting out once. More to the point, who deserves a home more than the people who are working so hard to achieve their American Dream. Far be it from us to determine who deserves one and who doesn't.

May 13, 2011 05:53 AM
David Burrows
Classic Realty - Fairfax, VA
No Pressure, Just Seriously Devoted to Real Estate

I help anyone at any price point and find it a pleasure to do so! Thanks for your post!

May 13, 2011 06:57 AM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Gerry, I'll work every price point but I prefer to work in a certain geographic area. Other business, I refer out.

May 13, 2011 08:07 AM
Renée Montgomery
Century 21 New Millennium - Warrenton, VA
Northern Virginia Real Estate

Settlement this week for my buyers, 784K sale price, just went under contract with my 64K listing. I won't turn down business but I will only work for motivated and qualified leads.

May 13, 2011 09:53 AM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

I personally don't do mobile homes because we can no longer find financing. It's an odd thing here but the listing agents are the ones that help get the financing because it's so rare. I can't sell it without financing & cash is a rare thing let's face it.  That's the only thing I've ever turned down because of type.

I don't reject any buyer because of their price range.  I actually think it's a rejection & it should be discrimination in my book.  Snub your nose at someone else & someday it will happen to you.  The buyers price range is what it is - you'll show him houses or you won't.

May 13, 2011 12:57 PM
Sarasota & Manatee Counties FL
SaraMana Properties - QuickFreeMLS.com - Bradenton, FL
QuickFreeMLS.com - Listings In Paradise

I do not feel I "owe" anyone my business. I choose whom I want to work with and when I want to work with them; just as they choose whom they want to work with and when they want to work with them.

I'm doing quite well thank you, so it is definitely working both for myself and my many satisfied clients.

May 13, 2011 05:56 PM
Don Black
RE/MAX Patriots - Manchester, PA

I don't mind doing a mobile home at all and I do a lot with investors buying $30,000 and under York City investment properties that need work.  I don't mind because...I set a minimum commission, which isn't much but it's enough for me.

May 16, 2011 01:25 AM