If you haven't seen some of my recent posts, I'm expanding on an ActiveRain post I wrote in 2015 where I listed 20 things I learned tending bar. Today's post focuses on the fourth of twenty lessons.
Lesson #4: Always get paid in full
One night I was working at Mr. Eagan's, an Irish Pub in Washington DC, and we had a pretty good crowd though I can't remember why. On Sundays, the kitchen closed at 9:00 and after that, I was on my own. I had booth of very loud and boisterous people who ordered appetizers, entrees, and several rounds of top shelf drinks. When a keg blew, I had to run to the basement and hook a new keg to the line. When I returned to the bar, the 4-top was empty - they ate and ran without paying.
Years later, a fairly inebriated man came in and sat at the only empty seat at the bar which was mostly populated with my Sunday Night regulars. He tried and tried to get my attention. I tended to everyone at the bar, except him.
Thinking I had not seen him, my regulars tried to motion to me in his direction. From the far end of the bar I looked over at the man and said. "Are you seriously coming to my bar and trying to order a drink?"
All the conversations and the bar stopped. Everyone wanted to know what would happen next.
He politely tried to tell me his drink order, but I cut him off.
"Several years ago, you and three of your friends came in and sat at that table over there. Do you remember? I do. You rang up a huge bill and then decided to dine and dash. Not only did you not leave a tip. I had to pay your bill. So, you will not be getting a drink here while I'm behind the bar." I said loudly enough for everyone to hear. "I will never forget any of your faces."
The bar was filled with wide eyes and serious faces. So I smiled and checked on my customers one by one. The "dasher" at the bar finished his cigarette and left.
In bars and restaurants there is an unspoken agreement that you pay for what you've ordered to eat and drink. You pay at the end of your visit. And if you were served the food or drink by a server, you tip the server at the end of your visit.
My regulars knew not to walk out on a tab, but now they knew the consequences. As a bartender, especially a young, female bartender, it's very important for the customers to know the rules and how you will enforce them. They know they have to pay in full.
Of course the owner of the bar, had at times, allowed a few regulars who had lost their jobs to "run a tab." All the bartenders and servers were made aware of the arrangement. When the regular found a job, they knew it was time to pay in full.
How does this relate to Real Estate?
Real estate agents also provide their products and services upfront, without any compensation until the end of the service and delivery. Agents front their time and money for weeks, months, and sometimes years before receiving payment. They often cover the costs of gas, photography, signage, lockbox fees, printing, painting, cleaning, phone service, advertising, as well as general office expenses for the entire time of the service without compensation. That is in addition to the time spent showing homes and providing customer support and service.
However, this is not an unspoken arrangement. It's something that's written into an agreement and signed by all parties. As a real estate professional, I do not provide services to my clients until I have a signed written agreement. When working for sellers or landlords, I make sure to have a completed, signed, written listing agreement. When working with buyers or tenants, we sign a complete, written, brokerage agreement. I do this because I am a professional and I want you to understand and agree to the services I will provide to you and the amount you will compensate my brokerage for those services.
Why don't all agents have written agreements up front?
Great question. I don't really understand why they don't. I assume they are afraid to ask for the business and are afraid of rejection.
A very successful agent I know once told me that he shows houses to people all the time and waits until they find a home they love and then asks them sign a representation agreement as they are writing an offer. Then a couple he had been showing homes to for several months, bought a $9 million home without him and he missed out on the commission. Now he gets the agreements signed up front.
Have you ever needed a root canal and walked into a dentist's office and asked if they could fill a cavity for free before deciding if you'd pay them for a root canal? Of course not! You can't even see the dentist until you've given your insurance information (pre-approval) and said how you will pay for the service (proof of funds) and paid a co-pay (retainer fee). Why? Because dentists are professionals.
Don't be Wimpy!
If you're working with an agent and you don't have a signed written agreement, do you plan to pay them for their time and service? If your answer is no, why would any agent worth their commission work with you? Don't be a Wimpy. Pay for the services you use.
If you're looking for a real estate professional who will ask you to sign a written agreement before working for you, let me know. I'm happy to represent people who know how to make sure I get paid in full.
In case you missed them, here are the previous posts on the lessons I learned tending bar.
Lesson #1: Greet everyone with a smile
Lesson #2: Give your clients what they want if you can
Lesson #3: Never Date a Customer or Client
And if you have any real estate questions or needs, feel free to give me a call at 202.271.5301.
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