Real Estate Agents ask... "Why Should We Work for Free?" Answer... WE DON'T!

By
Education & Training with Sell with Soul

I'm on a ranting roll this week and it's only Tuesday.

My friends... let's stop complaining about "working for free." Let's stop proclaiming that we need to better protect ourselves from the home-buying and -selling public who live to abuse our willingness to do work "without any guarantee of compensation." 

WE DON'T WORK FOR FREE. WE WORK ON CONTINGENCY.
There's a big difference!

Our willingness to work on a contingent basis - that is - to not be be paid until or unless we perform, is precisely WHY real estate fees are what they are. We are able to charge a lot of money to do what we do, far more than we could charge if we were paid by the working hour or by the job, upfront.  

Working by contingency is risky. And when something is risky, it means, by definition, that there's risk involved (duh). In our industry, the risk is that we may not be paid for our efforts. No, we don't much care for that outcome, but it's the chance we're willing to take to be able to charge the hefty fees we do when we're successful.

If you don't want to work on a contingent basis, you're welcome to find a different model that better suits your personality. There ARE other models out there - Mollie Wasserman's ACRE program is a great one, and there are hybrids where you reduce your fee in exchange for a retainer or upfront marketing fee.

But if you, like most of us, enjoy the challenge of shooting for the sweetest possible payday, stop worrying so much about those "wasted" hours!  As long as you were doing something that taught you more about your real estate market and/or put you in front of a warm body to impress with your wonderfulness, you weren't working for free. You were just building up credits toward that next sweeeeet payday!

Rant over.

 

 

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The More Fun You Have Selling Real Estate, the More Real Estate You Will Sell! 
(True Story)
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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Lisa Delzompo 951-704-4559 02/09/2010 02:05 AM
  2. Amanda Wernick 02/09/2010 05:16 AM
  3. D B 02/09/2010 06:22 AM
  4. Patricia Aulson 02/15/2010 03:30 AM
  5. Lisa Lambert/PMN/AHWD/SRES 03/19/2010 02:26 PM
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Rainer
138,389
Chrissi Chapman Topoleski
Re/Max Real Estate Connections - Haymarket, VA
HOME~There is no place like it!

Wish I could comment on everyone's posts- great topic! I like to think I get paid in experience, so when I'm not rewarded in my bank account, the next time around I know what worked/ didn't work. Thanks!

Feb 09, 2010 10:25 AM #91
Rainer
86,590
Ron Parise
LocateHomes.com - Cape Coral, FL

well said, we get paid for thr risk we take, more that we get paid for the work we do. The way to add to your bottom line is to figure out how to reduce that risk. eg, buyer broker agreements, pre quals, proof of funds and more office meetings, vs property tours.

While this may be extreme, Ive sold 2 houses this year before I met my client and without having seen the home.

Feb 09, 2010 11:14 AM #92
Rainer
333,502
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

I good with the fee structure as it is...I only get paid if the sale happens.  And I only work if I see that the prospects of a sale are great.  I like also that I have the flexibility to choose who to work with.  In a large way, I'm in control and am grateful for it.

Feb 09, 2010 11:21 AM #93
Ambassador
1,507,822
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I do charge a contingency for buyers under $100K but for buyers above $100K I do not.  It may sound inconsistent but I have to hold a certain bottom line!

I just turn and burn until a paycheck comes in.  I do BPOs for solid monthly income because nothing is a sure thing anymore!

Feb 09, 2010 12:04 PM #94
Rainmaker
38,806
Jesse Vasquez
REMAX PIONEER - Davenport, FL
"APPROVED”

I must say you hit the nail on the head with one swing of the hammer, good Job, I could have said it better myself, we dont work for FREE! good job KUDOS

Feb 09, 2010 12:07 PM #95
Rainer
73,781
An Marshall
Berkshire Hathaway - St. Augustine - Saint Augustine, FL
Your St Augustine Real Estate Consultant

Interesting thought threads throughout the blog and comments.  Makes me stop and think...

Feb 09, 2010 01:07 PM #96
Rainmaker
211,938
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

You are so right!

Feb 09, 2010 01:22 PM #97
Rainmaker
885,387
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

I use this very phrase when a nervous seller asks if I really think that the listing will sell. I say of course it will, because otherwise I won't get paid. That works well. 

Feb 09, 2010 01:27 PM #98
Rainer
32,862
Bob Sooy
Realty World Northeast LLC - Sugarloaf, PA

Jennifer, As a new agent, I find that everytime I read a post (or rant) of your's, I rethink some of the things that concern me about my new choice of career and remember why I got into this in the first place: The reward (not just money) for when the hard work pays off. All the work I have done that hasn't turned into a sale, I've been chalking up to a learning experience. Those will prove to be invaluable. Great post.

Feb 09, 2010 02:20 PM #99
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Jennifer

All, I can say it Thank You.  Someone had to say it.  quit your whining and go make it happen!

Feb 09, 2010 03:15 PM #100
Rainmaker
273,464
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

Not everyone is cut out to work on commissions. There may be a long time between checks ....and complaining never helps.

Feb 09, 2010 03:57 PM #101
Rainer
22,295
Richard Johnston
San Fernando Valley - RE/MAX Grand Central - Sherman Oaks, CA

For all the work we do, we are grossly underpaid.

Feb 09, 2010 07:33 PM #102
Rainmaker
3,752,540
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Hi Jennifer,

Great post..we do not work for free! We are constantly educating ourselves and that knowledge helps us build up a great memory bank to draw on for future clients. You may show property to clients and they don't buy but the next week you are showing another client the homes and guess what you already are familiar with the homes and have knowledge about them to better serve the next client..never wasted time..always learning and gathering information to better serve clients. The pay check always come with with persistence and the right attitude!

Feb 09, 2010 11:58 PM #103
Rainer
24,302
Shana Haugen
Century 21 - Gold Key - Fargo, ND

Jennifer, I always try to think of what your books tell me when I'm frustrated:  I sell real estate every day, and sometimes I even get paid for it. 

Feb 10, 2010 02:55 AM #104
Ambassador
2,007,377
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I've worked for contingency fees much of my life, and find the reward worth it, perhaps because I usually "win."

Feb 10, 2010 12:22 PM #105
Rainer
314,720
Patty Luther
RE/MAX Rock-n-Roll Realty - Lewiston, ID
Lewiston ID Real Estate, Idaho-Washington

work smarter to work less! ask the right questions and learn...

Feb 10, 2010 05:52 PM #106
Rainer
14,078
Lois Kubota
Keller Williams, Walnut Creek, California, DRE#01865028 - Walnut Creek, CA
DRE#01865028

Right on Jen!  
Rant on too!!

Feb 11, 2010 06:41 AM #107
Rainer
4,534
Nhut "Peter" Lu
Prudential California Realty - Long Beach, CA

Wow! Jennifer, look like you got everyone "wild" up with this subject.  I am a new agent, just started a couple weeks ago.  I went into this career with the understanding that we, the real estate agents (some are Realtor), are "self-employed".  In other word, I am my own boss.  I need to manage my time, manage my capitals, etc. like many business owners manager their business.

And as with every business, real estate agents should have the capital (money), a business, plan (strategic plan and execution of the plan), and most important DEDICATION and COMMITMENT to succeed.

However, I have much more to learn from experienced agents.  Hence, how to qualify prospects, turn prospects and leads into life time clients.  How to manage and deal with all obstacles within the real estate industry.

I can write more...but I think I should stop and prepare to attend a seminar on foreign investors this afternoon and work on my business plan.

 

Feb 11, 2010 06:57 AM #108
Ambassador
1,364,602
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

It's ALL or nothing, I guess. It's either we get paid, or we don't for all the time we invested. That's why we feel we work for "nothing" when we don't win.

Feb 12, 2010 12:28 AM #109
Rainmaker
76,436
Bridget Cella
Re/Max Connection - Sewell, NJ
e-Pro, Realtor

Well said Jennifer!

Feb 12, 2010 06:58 AM #110
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Jennifer Allan-Hagedorn

Author of Sell with Soul
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