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Let's Get PAID!

This is big news.

BIG NEWS.

Wednesday morning in the weekly sales meeting at the Weichert, Realtors West Chester Sales Office, Regional Vice President Jim Fizzano announced an exciting new program, called PAID:

Professional
Associate
Incentive
Development

This is a program which provides an incentive for Weichert Agents to assist in the recruiting of established professionals to become a Weichert associate.

For as long as the recruiter works for Weichert, the company will compensate them for their recruiting efforts by paying a bonus to the recruiter each time a recruit earns a commission. The bonus is paid as follows: 2% of the gross commission, less any marketing fees, will be paid at settlement, in addition to an additional 2% paid into the recruiter's savings account. Foe Example:

In a transaction with a gross commission of $10,000, a marketing fee of $600 is deducted, leaving a net commission of $9,400
2% of that amount will be paid to the recruiter ($188) after settlement. An additional $188 will be deposited into the recruiter's savings account, for a total bonus of $376.
This bonus does not decrease the commission owed to the agent. It is a bonus paid to the recruiter by the company.

These commission bonuses continue even after retirement -- for as many years as the recruiter worked for Weichert, up to a maximum of 5 years after retirement.

This program is not designed to shift the focus of our agents to recruiting. It is intended to be used to reward agents who help bring in other high-quality agents. This is not intended to recruit rookie agents. To be considered eligible to be enrolled in the PAID program, the individual joining the team must have earned at least $20,000 in prior commissions.

This is a test program, and will be tested in our region only (Chester and Delaware Counties in Pennsylvania, and the State of Delaware). If the program is successful, the program may be rolled out company-wide some time next year.

For those of you that may consider a switch to becoming a Weichert Agent, Weichert has many support services in place for our agents, including marketing support staff, state-of-the-art Internet lead handling coupled with a highly ranked web presence, award-winning training programs, and many other benefits shared by both our agents and our clients. If you are interested in finding out more, and would like to talk privately, call me, Rich Schiffer, on my cell at 610-506-2663.

Posted by Rich Schiffer, REALTOR, e-PRO on 05/03/2007 08:40 AM

Comments (16)

weichert

Post is included in group: Weichert Family of Companies

16 Comments on Let's Get PAID!

MAY

2007

Does your office send all of its work to the same Title company? Is there an ABA established?

This sounds a lot like MLM (Multi-Level Marketing), Pyramid, Quixtar, etc.

Not all, Rob, but a large portion is done through our affiate company, Weichert Closing Services. The buyer is always free to select their own title company, however, as you well know.

I had vaugly remembered the name Quixtar.....so Pete, you think this is more of diversionary marketing to bring $$$ into the Owner as opposed to providing 'services' to the target market consumer?

BTW - Quixtar -

Quixtar is the successor to the Amway business in the United States and Canada. In 2001, after the majority of Amway IBOs ("Independent Business Owners" is the term used for Quixtar distributors) had transferred to the new company, Quixtar completely replaced Amway as the marketing venture for Amway/Alticor products in North American regions. The Quixtar business model differs from the Amway business model in many aspects, such as the way distribution is performed. Rather than ordering product from a distributor who delivers them in person, Quixtar customers place orders online and have the products shipped to them directly. This new method has altered the Amway business model by allowing IBOs to stop spending time distributing and allowing them to focus their energies on building their business, which is developing communities of other IBOs.

The way to buy products at Quixtar's web site is with a referral number from an IBO. The referring IBO then receives a small percentage ("bonus") of the cost of the purchased goods, with Quixtar-exclusive products yielding a higher bonus per dollar in PV/BV Point Value and Business Value. Quixtar offers a wide range of products for its IBOs to purchase for personal use or to sell to customers through Quixtar.com.

Formerly, people could join Quixtar as "Clients", "Members" or IBOs. "Clients" would pay retail price for products and services from Quixtar.com, "Members" would pay a reduced price but would not have the ability to receive bonuses from Quixtar. As of July 2006, Quixtar eliminated the "Members" option, and "Clients" are now referred to as "Customers". IBOs pay a registration fee and build their businesses through retail sales to customers, referring business to Quixtar.com, and by helping other IBOs build similar businesses. Their earnings are based on their business' sales and the volume of sales and purchases of IBOs registered by them.

The structure of a Quixtar organization is hierarchical, but an individual can earn more than those who bring them into the organization. Pin levels are the same as in Amway. There are several major pin levels in the model - Silver, Gold, Platinum, Ruby, Emerald, Diamond, Executive Diamond, Double Diamond, Triple Diamond, Crown, Crown Ambassador. Each level denotes a particular level of success in building their IBO business.

In the 1979 ruling In re. Amway Corp., the Federal Trade Commission determined that Quixtar predecessor Amway was not an illegal pyramid scheme because no payments were made for recruitment. In addition, Amway (and later Quixtar) rules required distributors to sell to at least 10 retail customers per month, or have $100 in product sales, or a total of 50PV from customer purchases in order to qualify for bonuses on downline volume. Quixtar IBOs are required to report this customer volume on Quixtar.com or they do not receive bonuses on downline volume. Furthermore, an IBO must also personally sell or use at least 70% of the products personally purchased each month.^[5] The FTC established that these rules help prevent inventory loading and other potential abuses of the marketing model.

Quixtar reports that the average income for an active Quixtar IBO in 2005 was $115 a month. The FTC has required this information to be provided to all prospective Quixtar business owners since the 1979 FTC ruling clearing the Amway business model as legal (see litigation below). However, the order was violated with a 1986 ad campaign, resulting in a $100,000 fine [2]. It is documented in The Quixtar IBO Compensation Plan^[6] and on a Quixtar website.^[7] The "average income" is calculated using all "active" IBOs, which in a 2001 survey represented 66% of all recorded IBOs. An active IBO under this survey covers a wide range of commitment, however, as any IBO who attempted to make just one retail sale, or presented the Business Plan at least once, received a bonus check, or attended a company meeting once in the previous year. The average annual Quixtar income for an IBO that qualified at the Platinum level in 2005 (0.1683% of IBOs) was $47,472 and for a Diamond (.0120% of IBOs) it was $146,995. The largest single annual bonus (in addition to monthly incomes) for a Diamond was $1,083,421.^[8]^[7]

This is similar to what Keller Williams does also. You will have to keep us posted on how it works out. Good luck.

Rich, i had forgotten if you had previously told me about how your particular agency sends its title. I was just curious. And as you know, the options are rarely given to the client in the real world.

Now I'm much more curious about Pete's comparison to pyramid, etc. regarding the PAID program.

Pete, I don't see that at all. It is in a way, a Profit Sharing plan. Each time someone you introduced to the company creates revenue for the company, you receive a small share. Unlike pyramids, you get no "override" on the people they recruit. There is no direct bonus for recruiting someone, unlike in some MLM setups. Actual product (in this case real estate) must actually be sold before there is any commission sharing. Again, it is the broker sharing their side of the commission, not the agent.

The real benefit to this program is something that holds true in all aspects of business: as you surround yourself with successful people, you attract more success. I see this as the company's way to give incentive to agents who take that to heart, and put it in action.

Weichert has a very smart business model. It does not sound like MLM at all.

I just read another post re. Exit Realty. Sounds the same- and is a nice way for agents to gain some security. The only thought I'd consider is, will this maintain quality agents (whoops- there goes 90% of your income) or encourage your salespeople to sign up the guy under the bridge? Not a criticism, just a thought- Weichert has certainly achieved a very nice presence in the market.

Weichert has several things already in place that help to attract and retain quality agents. This is just "icing on the cake" as it were. With some degree of certainty, I can assure you that the "guy under the bridge" would not pass the interview process. This is not about warm bodies, it is about attracting quality sales people with an established track record.

Agents go where the business model suits them best. No matter who you are, and what point of your career you are at, it is always sound advice to evaluate your practice, and determine the best fit for you. Find the broker whose corporate structure and business plan best meet your needs, and suplement your ability to serve your clients.

MAY

2007

Great title Rich! Who, in this business, or any other, doesn't want to get paid?

Weichert has a very nice business model...that's a fact. The proof is in the proverbial pudding. I'm not a big fan of all of it...but any business model can be argued against...I ask if it works? Weichert has for the most part and remains a recognizable entity in the Mortgage Industry around these here parts...

I step on precarious grounds in that I actually like the model, though if I (as independent guy from a rebel mortgage company) visited a Weichert office...they would kindly ask me to leave. My agenda may not be initially a fit for the model. Yet, I appreciate that. I want to do more "Realtor Calls" cause I kind of, in a pleasant sort of way, enjoy the pain. If you aren't persistent and thick-skinned...this biz may be a memory.

Jason,

Many agents do not use Weichert Financial Services as their primary source for financing options for their buyers. I maintain a list of people that I refer my clients to. Two of the people on that list are not with WFS (but are Active Rain Members). WFS has over 360 loan programs to draw from, but not all clients will be suited for the available products. I recently refinanced my own home, and WFS couldn't help me, because of appraisal issues. Another lender could. Simple as that. I think a better way to introduce yourself to our agents is to send them a qualified lead or two that you have already pre-apporoved. That would go much further than handing out rate sheets and treating for bagels at the office meeting.

Our loan officers (we call them Gold Services Managers) have even been known to look over a client's pre-approval from another lender and tell them flat out that WFS cannot do better for them, and that their best option is to stay with the lender they are with. Not many places I know of will go that far to ensure the client has the best service possible.

Amen Mr. Schiffer! That would go much further than handing out rate sheets and treating for bagels at the office meeting. I hate that practice myself Rich...it's ridiculous! The new way of networking should be not a lop-sided relationship where the Realtor hands his favorite guy or gal leads, but one of growing each other's business. It's not about what you can do for me or whomever visits you, it's what we/they can do for you as well. Going one step further, it's about what all of us can do for the very individuals who make our profession a trade...what we are collectively doing for Clients.

As far as the last paragraph......Fair Enough. Again, I like the business Model.

AUG

2007

Thanks for the info, Phillip. I do see a few ways that Weichert's PAID program seems a bit better.

1st, it is only applicable when an experienced agent is recruited. Since 80% of new agents don't last more than 2 years in this business, recruiting agents with a "track record" of success will, in my opinion, lead to a longer term success of the prorgam, as well.

Also, the bonus under the "paid" program seems to last potentially longer after retirement, and there is no annual cap on the bonus received, as you have described with EXIT's plan.

I do like the concept of the beneficiary, though, even though there is an annual cap.

The important thing to note here, is that different business models appeal to different agents. The most important thing is for agents to find the one that fits best with your business plan, and your clients' needs. Any particular model might compensate the agent better than another, but if the service to the client is lacking, (leading to fewer clients) the compensation to the agent could end up being less over the long term. I appreciate you sharing the details of EXIT's model.

AUG

2007

I am interested to see how it does work out (since it's a test program). I know that a Weichert office up here in the Valley had a mentoring program that did not work well. However, the standards were not high, but the turnover was.

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