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Once you count your commission...it's as good as gone.

By
Real Estate Broker/Owner with GoodBuy Homes NJ Essex & Union County Real Estate specialist 0791869

Being a Realtor who manages his own team, I take on all types of responsibilities throughout my daily routine, none more important than training newer agents; I was talking to a new agent who was explaining to me that he just got a property under contract (his 1st) & he's ready to get paid! I explained that as Realtors we don't  get paid until the deal closes, so that contract isn't worth the paper it's written on until the deal funds...he like most rookies would; walked away a little scorned, but still happy about his new-found riches.

 

So this agent went against one of the Golden Rules of Real estate; NEVER count your commission or its as good as gone...the next few days the madness began, he maxed out credit cards, came into the office with a few new outfits, offered to take the office staff (myself included) out to dinner in appreciation amongst other things.  I guess at that point it was raining money!!

A few days later I asked how was the deal progressing, he replied confidentially; "GREAT! We just completed home inspections, no problem there & now my buyer is waiting on their commitment from the lender".  Good for you I said in response to the great news.

Now as weeks past I saw a Rookie agent grow with so much confidence closing...& all of this was from his first deal being on the verge of closing... 

But of course the Real Estate Gods had to intervene...

Apparently the property had a leaking oil tank that was discovered just 10 days before closing because a friend of the buyer asked if he did an oil tank sweep? According to the report the oil tank needed serious attention as the leak had spread across a neighbors yard & the damages were going to total $45,000 to remedy.  This naturally scared off the buyer who did not want to deal with the headache.

Where does that leave the agent??? Credit cards maxed, some fancy new suits on the hangers, an angry buyer (who blamed him for not bringing up a tank sweep) not to mention his confidence level which started to decline like the      U. S. Market.

The agent wasn't feeling very good about his career at that moment. I pulled the agent to the side after the deal died & explained to him that as Realtors we have to Bulletproof our transactions & cannot over extend ourselves by spending money we haven't made yet.  A valuable lesson was learned through this experience, which is no matter how sound the deal appears, or the amount your buyer has on his proof of funds letter, NO deal is a definite until it's closed...


Now I also told him that the clothes & fancy gadgets can probably be returned, but he still owes the office dinner.

 

I don't think I will ever have to remind him that no matter the circumstance, Once you count your commission...or it's as good as

                                                                                            GONE!!

Comments (9)

Jack Mossman - The Nines Team at Keller Williams in Stockton
The Nines Team At Keller Williams - Stockton, CA
The Nines Team at Keller Williams in Stockton

Malik:  As a team managing agent I could not appreciate your post more!  The content is outstanding and the message one that we need to constantly remember.  As importantly, the execution of the blog was insightful, creative and enjoyable.  Thanks for both efforts.

Jul 14, 2010 06:06 AM
Jon Budish
Resident Realty - Fort Collins, CO

That agents perception of this businesss is why some agents fail. I hope he learned the lesson without too much damage.

Jul 14, 2010 06:06 AM
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Malik!

great presentation...You have raised some very good points...

Thank you!

Jul 14, 2010 06:08 AM
Catherine Jackson
Re/Max State Line - Kansas City, MO

An important lesson for newbies! I made the mistake when I first started to figure out the commission I could make when I had only listed the house! Thankfully I never spent the money!

Jul 14, 2010 06:09 AM
Malik Crichlow
GoodBuy Homes NJ Essex & Union County Real Estate specialist - Maplewood, NJ
Maplewood,SouthOrange,Union Real estate

Thank you all, its one of the most important rules of the game, do not count that check until the deal is closed.  The agent is ambitious and had the learn the old fashion way by trial and error.  

Jul 14, 2010 06:21 AM
Corri Klebaum
Advantage Mortgage Inc. - La Grande, OR
NW Mortgage Pro

one word... Amen!

Jul 14, 2010 06:37 AM
Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA

This agent should have known the ins and outs before signing on the dotted line what could happen.  For him or her to come up to you and ask to get paid, apparently wasn't notified on how the procedures work.  How naive can someone be?  We need to have agents more trained before we let go of the reins!

Jul 14, 2010 07:41 AM
Malik Crichlow
GoodBuy Homes NJ Essex & Union County Real Estate specialist - Maplewood, NJ
Maplewood,SouthOrange,Union Real estate

We as professionals and veterans of the Real Estate Business MUST remember what is was like to be a rookie and make those mistakes, its the equivalent of a new driver making an illegal turn or putting the car in neutral instead of drive, we learn and get better.  Lets not judge them, lets help them, at least that's what my approach is. Lets also not forget that a lot of the so called "experienced" agents do a lot of unethical or stupid things despite knowing the rules, so lets take it with a grain of salt and build and not destroy.

Jul 14, 2010 08:14 AM
Gina Chirico
Lattimer Realty - Fairfield, NJ
Real Estate Agent - Essex County, New Jersey

Malik, guilty as charged.  I have, too, counted my commission before I received my check and by hook or by crook those real estate gods intervened.  Luckily I didn't spend the money before it was made or earned but I think we are all guilty of counting the numbers in anticipation of the closing day.  I'm hoping to see this post in my called shots!  This is a good one to pass on rookies and old timers.

Jul 19, 2010 02:42 PM