How Do REALTORS® Get Paid?

This post is thanks to the March Challenge by Patricia Feager and Kathleen Daniels! 

During the housing recession, a customer walked into my company office asking if they could speak to an agent.  The receptionist referred the man to me.  After settling into a conference room, I learned that the man wanted to rent a home, not purchase a home.  

Having a prior career in property management is one reason I agreed to help this man.  Understanding the ins and outs of rentals, I took it upon myself to ask all of the leading questions in order to know if he was a good potential tenant.  

I should note that I don't handle many rentals.  In fact, only one client has a luxury rental property that he purchased through me that I help him lease about every year or two.  

The questions I asked of this man concluded that he had borderline credit, no pets, could move in 2 weeks, and had funds for all the required deposits and lease up front.    Before showing anyone a home whether they are purchasing or leasing, it's always a good idea to meet in an office first to uncover wants and needs.  But in this scenario, even that meeting didn't uncover the tenant's character.  

Showing the man a few rentals, I learned that this man was not easily pleased.  I had requested he follow me to those rentals in Scottsdale.  He drove a 2 door BMW.    Although it was a nice car, the black smoke coming from behind  lead me to believe that he might not be the best tenant.  Did he maintain his belongings?  Was he a responsible tenant? 

Since we did not find a rental that he preferred and my growing suspicions left me wary, I elected to stop for lunch to chat about what he had seen.  Remember, this was during the housing recession when commission income was severely challenged with lots of inventory and few closings.  I was doing this man a favor and had the time and experience so I chose to help him.  

While we were both in line for lunch, I was ahead of this man because I was NOT offering to pay for his lunch.  As soon as he had his food on a tray, he quickly placed his tray in front of mine and told the cashier that I would pay for both lunches.  

Instantly, and keeping my emotions in check, I knew I was not going to work with this client.  Several red flags told me I could not trust this man,  he didn't value my services, and cooperation might be challenging.  

After lunch, I told him that I had shown him all that was available and did not feel I could help him any further.

My practice is always to tell clients HOW I AM PAID.  I am not paid a salary, but am paid by commission offered by the seller.  I perform months of service with no income until a sale closes.  That one lesson was enough to correct that negative situation.  Earning a client's trust and value is first and foremost and with that understanding we work TOGETHER to help sales close.