Feathers in the Wind!

NUGGETS FOR THE NOGGIN

Feathers in the Wind

Article by: Jim “Gymbeaux” Brown, originally written 8/16/2006

Yesterday I received a telephone call from a woman I have never met who immediately, from her very first word on her call, began to shout at me and within the first two or three outbursts called me a racist.  Let me repeat – I had never met her, I did not know her race, religion, or even why she was calling me – yet I had been labeled a racist.

In brief, she was a buyer of real estate and was represented by a broker from Baton Rouge, Louisiana, approximately 90 miles from our market area.  One of my associates had a property listed that this lady apparently wanted and which the seller had agreed to sell to her.  As part of the negotiations, a buyer creates a list of discrepancies that the buyer would like for the seller to address.  The seller agreed to fix some but not others and the buyer REJECTED the seller’s response.  Therefore the seller requested and received a cancellation agreement signed by the buyer.  This situation happens in real estate more often than one would imagine and until this moment was certainly not unusual.  The buyer then recanted her rejection and said she wanted the house and the buyer refused to sell it to her.  Race was never an issue by anyone involved in the sale.

Then came the irate telephone call.  The caller shouted throughout the entire call and would not give me a chance to say more than a very few words at a time but none of my words constituted a complete sentence or thought.  In her mind my agent and I were guilty of racism.   This Nugget is NOT about the failed real estate transaction or what could have been done differently – that is not the issue.  The issue is in the name calling.

We have all heard the saying, “Sticks and stones may break my bones but names will never hurt me!”  But is that true?  Anyone who thinks that is a true statement ought to read Bob Burg’s book, Gossip.  And when you do, don’t skip over “What People Are Saying About Gossip” at the beginning of the book (shameless plug).  Bob suggests in his book that words can be just as deadly as any physical weapon that a person can use.  It was words that caused one soccer player in the world championships to head-butt another player because of what he had apparently said.

The following is an excerpt from Gossip:

A nineteenth-century folktale tells about a man who went about slandering the town’s wise man.  One day, he went to the wise man’s home and asked for forgiveness.  The wise man, realizing that this man had not internalized the gravity of his transgressions, told him that he would forgive him on one condition: that he go home, take a feather pillow from his house, cut it up, scatter the feathers to the wind and return when done to the wise man’s house.

Though puzzled by this strange request, the man was happy to be let off with so easy a penance.  He quickly cut up the pillow, scattered the feathers and returned to the house.

“Am I now forgiven?” he asked.

“Just one more thing,” the wise man said.  “Go now and gather up all the feathers.”

“But that’s impossible.  The wind has already scattered them.”

“Precisely,” he answered.  “And it is as impossible to repair the damage done by your words as it is to recover the feathers.  Your words are out there in the marketplace, spreading hate, even as we speak.”

It is a belief of mine that if you were to handle a situation perfectly, you would be lucky if your customer would tell 5 other people about how well you performed.  Yet if the customer perceives that you failed to properly handle a situation correctly, they will most likely tell everyone they talk to.  Being called a racist is probably one of the worst labels one can put on another along with child molester, sexual predator or spouse abuser.  These labels are bandied about without proof yet they tend to “stick” upon the individual(s) so labeled.  At this point, as in the case of the story above, the truth has little to do with the label.

Yes we get angry when such things occur.  In all honesty, in the situation with the telephone call, I instantly remembered a conversation I had with Diane Romano, a broker for whom I worked, when she said when you find yourself in an adversarial situation and one party is angry, take a deep breath, gather your thoughts before you speak and then when you speak, speak more softly and slowly that you otherwise would.  It tends to calm the other person down and they have to strain to hear what you are saying meaning they can not be talking at the same time.  In this situation I in fact remained very calm (surprisingly) and tried to calm the caller down but to no avail.  She refused to let me speak; she continued to spew one accusation after another at me.  The label “racist” came through loud and clear.  Without giving her any reason to do so, she hung up – it was definitely a one-sided conversation from the very beginning.

These things are obvious!  There are times, however, when such labels are not so obvious but can be just as deadly.  And surprise – they come from our own mouths!  Well “mouths” may not be technically correct – rather from our minds in the form of self-talk.  Our own talk can be just as deadly as someone calling us a racist.  After all, when we talk to ourselves, who is listening?  We are.  When we tell ourselves something is impossible, we find ways to make our beliefs come true.

I truly feel sorry for anyone who does not play golf.  In golf, self-talk is what the game is all about.  As Henry Ford famously said, “If you think you can or if you think you can’t, either way, you’re right!”  In golf this is 90% of the game.  If you think you will hit the ball into the water, you probably will.  If you don’t, you think you were just lucky.  If you think you can make the putt, you probably will. If you think you are going to lose, you probably will.

It is the same in life and business.  Whatever you think you can or cannot do, you will or will not achieve.  People can call me a racist as often as they like but in my mind I know I am not; so I don’t worry about it.  If a lot of people began calling me a racist, I would then have to take a look at my language and actions and ask others how they perceive me.  But one angry person in over 27 years does not make me a racist.  That, however, was just ONE label.  How many labels do you put on yourself and how often to you reinforce them?  Think about it and ask yourself if you have ever said any of these things to yourself, outwardly or inwardly:

• Why bother, I never win anything.
• They will never want to work with me; I’m new in the business.
• Why would they want to work with me, they can buy me 10 times over
• My input is not important, just sit here (in this class) and shut up
• I can’t do that
• That will never work in our market; our market is different
• The buyer will never accept this
• The seller will never accept this
• Buyers are liars
• Sellers are liars
• The boss will never go for this
• It’s not in the budget so why bring it up
• I know smoking is very hazardous to not only my health but everyone’s around me but I CAN’T QUIT!
• I can handle all this alcohol
• I had a few drinks but I can handle this car Okay
• My wife will never know
• My husband will never know
• I don’t need any help
• If I ask for help I will be perceived as being weak
• No one would ever want to read my book I’m writing
• I will be considered strange if I write a poem
• If I get good grades in high school, I will be considered a nerd

Let’s get back to being called a racist.  Terry Cole-Whittaker wrote one of the most beneficial books I have ever read – What You Think of Me Is None of My Business.  You almost don’t have to read the book, the title says it all.  What that irate lady thought of me really is none of my business.  If she files a complaint I know I will be cleared so why worry?  Ms. Cole-Whittaker ought to write a book entitled “What I Think of Me Is Entirely My Business.” Or, maybe I should write it.    Another phrase that comes in handy during times like this is:  “You wouldn't worry so much about what others think of you if you realized how seldom they do.”  Eleanor Roosevelt; brilliant!  But having said that, everyone needs to worry about what your internal-self is thinking and saying about you because that is what is going to control your outcomes.  “If you think you can, or if you think you can’t, either way you are right!”  That’s scary when you consider how much negative self-talk we engage in every day. 

A perfect example of this lies in writing this Nugget.  Will people think that I have said the things to myself that I have listed above?  Frankly it doesn’t matter what I think you may think, what is important is what do I think and therein lies the lesson of this Nugget.  Learn to think in a certain way and when a negative thought enters your mind, just say to yourself, “That’s interesting; where did that come from?” and then just let it pass and get back to “thinking in a certain way” ala Wallace D.Wattles.

ACTION STEPS

1. Worry less about what others think of you because they think of you very little.
2. Realize you are engaging in negative thinking and then just let it go and move on.
3. Think “I can!” rather than “I can’t”
4. Read Gossip and learn to identify when you are engaging in damaging conversations about yourself and others!

Real Estate Commissions

NUGGETS FOR THE NOGGIN

REAL E$TATE COMMI$$ION$

(Primarily for Real Estate Agents)

By Jim “Gymbeaux” Brown, October 22, 2013

Disclaimer:  I was first licensed in real estate in 1980 as a Salesman and as a Broker in 1982 and have been continuously licensed by the State of Louisiana through January 1, 2013 when I officially retired from real estate sales.  During that period I was also licensed as a Broker by the State of Mississippi on two different occasions.  That represents approximately 33 years of real estate experience mostly as the Designated Broker for the companies at which I worked.  During that period I worked for small independent companies, a large independent company and 5 major franchise companies.  Special note, most company changes were the result of one company buying out another.  I believe this experience provides me a unique perspective on what would be important for real estate agents to consider in regards to being able to take advantage of the best a real estate company has to offer that will provide the best opportunities for individual success.  Contact Information:  email:  JimBrown@gymbeaux.com; Cell Phone:  985-640-3564.

This is the first Nugget for the Noggin in a series written especially for real estate agents.  I awoke this morning with a nagging question as to what would be important for a real estate agent to consider when selecting a company at which to place his or her license or for an agent to consider when transferring a license to another real estate company.  As stated in the above disclaimer, I believe I have a unique experience level that enables me to address this subject based on my knowledge of how most if not all real estate companies are organized and therefore how that organization can help or hinder the success of a real estate agent, especially one new to the business.  This same unique perspective can also assist those agents considering transferring to another company.  The following are some of the subjects that will be covered in this and subsequent Nuggets for the Noggins:

• Real Estate Commissions
• Probable Customer Calls/Inquiries
• Training
• Individual Support
• Group Support
• Individual Brand Name
• Company Brand Name
• Selling Broker/Manager
• Who Makes Decisions
• Internal Dispute Resolution
• A Company of Individuals or a Company of Teammates
• National Name vs. Local Name
• Reputation(s) Matter
• Others to follow

On the subject of real estate commissions, this is not about how much commission to charge a customer but rather how much of the commissions you earn that you get to keep. 

How do you make money selling real estate?  That is simple; you close a sale involving real estate.  In most states, at the closing, your COMPANY where your license is held earns a commission on the sale.  Once the COMPANY receives the commission an internal pre-determined commission split between the COMPANY and the SELLING/LISTING AGENT is applied to the total commission earned.  The importance of that “pre-determined commission split arrangement” cannot be over emphasized.  That is what this Nugget refers to.

As a real estate agent you can only make MORE money in one ore more of the following methods:

• Charge higher commission percentages for the sales you make
• Have a higher commission split arrangement with your sponsoring Broker/Company
• Learn to keep more of what you earn by learning how to take advantage of tax regulations
• Lower your cost of doing business meaning lower your operating expenses
• A combination of all of the above

It starts with the commission split you agree to with your sponsoring company.  There is no set rule for companies and agents.  In fact real estate commission split arrangements are truly negotiable between the agent and the Broker/Company.  Agents new to the business are typically not aware of this and usually accept whatever commission split is initially offered.

Most conventional real estate companies will tell the agent that there is an approved commission split.  The approved split may start at one calculation, example, 50% to the Company, 50% to the Agent.  This split may be graduated to where it increases during any given year as the Agent closes more and more sales.  Given enough sales the 50/50 split may actually increase to a full 100% commission but that is rare.  Therefore at most real estate companies, agents within the company are rarely all on the same split at any given time.  Agents new to the business usually start at the lowest split whereas the more experienced agents are usually on another schedule entirely.  The commission splits within the company typically restart either at the beginning of each year, or restart based on the company’s fiscal year which could start at any time or on the anniversary of the agent’s start with the company.

Every licensed agent SHOULD be required to sign an Independent Contractor Agreement with the sponsoring broker and that agreement SHOULD define exactly what the agent’s commission structure/schedule is with the company.  If you take nothing else from this Nugget, you can take this next bit of advice to the bank:  IN REAL ESTATE YOU WANT EVERY AGREEMENT, EITHER BETWEEN YOU AND YOUR BROKER/COMPANY OR BETWEEN ALL PARTIES TO A REAL ESTATE TRANSACTION; OR BETWEEN AGENTS TO BE IN WRITING!   NO EXCEPTIONS!  Therefore, get your commission split agreement IN WRITING!

Obviously you want to “think” in terms of earning 100% of the commission on a sale of real estate; why wouldn't you?  There are companies where that can happen such at national franchise companies (e.g., Keller Williams Realty®, RE/MAX® and others) and local independent companies (you will have to check with your local companies for examples).  I have seen splits as low as 40% to the Agent/60% to the Company for agents new to the business and as high as 100%.  The 100% companies usually require the agent to pay monthly to the company a pre-determined amount for the agent to conduct their business regardless of the number of sales they make (RE/MAX®) or there may be some form of graduated rate they pay (Keller Williams Realty®).  The latter involves starting at one rate and once a pre-determined amount is paid to the company the split is changed to the 100% level.  In the first example there is great risk to the agent because the agent incurs the monthly expense to the company even if no sales are closed.  In the second the risk has been negated or reduced because the cost to work at the company is very low but the company retains a percentage of commissions earned UNTIL a pre-determined amount paid to the company has been reached.  In other words, the agent has “capped” the amount paid to the company during any given year.  At the start of the next year the agent typically reverts to the original agreement; the cap is terminated and the agent starts over.  Having worked at both types of companies, I personally prefer the second method (Keller Williams Realty® as it significantly reduces the risk to the agent while at the same time provides the agent the ability to earn 100% of the commission.  In both cases, you should determine how much you are going to pay to the company to be able to enjoy earning 100% of the commissions; get this agreement IN WRITING.

It has been my experience that agents new to the business typically DO NOT research the various commission split options available in their specific area and go with the first company they interview with.  There are options and these options should be researched but I would caution everyone that commission splits are only one part of the decision process, especially for new agents.  For example Training would be a HUGE issue if I were new to the business.  What type of training am I going to receive and is there any costs associated with that training.  For example a company may state they put all new agents on a 50/50 commission split schedule and have a great training program but fail to explain that there may be a cost for that training.  Other companies may start agents out on a 40/60 split and then have no cost for the training provided.    These are only examples; there is no set or specific split for agents.  Learn to see “the BIG picture” before making any decision regarding which company to join.

If your plan is to make a career out of selling real estate, my recommendation would be to join a company that has a plan to get you to the 100% commission program as quickly as possible and without a great deal of financial risk to you to achieve this status.  You do not want to join one company for one reason and then be required to transfer to a different company to fulfill your goal or desire to reach the 100% level.  Changing real estate companies is usually not a good thing because it confuses your database of customers who have come to know you by the company you keep – the company you work at.  And you may NOT be permitted to take your pending business with you.  This is exactly what a great many agents experience.  They start out with no sales and then work their way up to making a lot of sales and suddenly realize they would make more money at a different company doing the same amount of work.  If that situation turns out to be the case, that would be an excellent reason to transfer to the company that enables you to make more money.  But having said that, wouldn’t it make more sense to research the industry and go with “that” company when you start your career?

Here are some questions to ask your potential Broker/Company during your interview process;  the answers to these questions should enable you to make a prudent business decision as to which company to join.  In face I would strongly suggest using the Ben Franklin method of decision making.  Place a large capital "T" on the paper.  On one side of the "T" write PROS and on the other side write CONS.  They as you research the various company choices you can write down the Pros on one side and the Cons on the other.  When completed, one side will usually be longer than the other and that should help you with your decision.

• Do you have a printed commission scheduled that I may look at and keep?  I would be skeptical if a company could NOT provide such a printed schedule.
• Is the commission schedule part of your company Policy and Procedure Manual?  This is another way of asking if the company has a Policy and Procedure Manual.  If the answer is no, I would recommend interviewing with another company.  A company that does not have defined policies and procedures can change their policies and procedures on the spur of the moment; you do not want to work at such a company.
• Are ALL agents within the company on this scheduled or does the company make exceptions for “special” agents?  As an example, a special agent may be a highly productive agent, an agent transferring from one company to another who has a track record of producing sales, or an agent with a special trait such as computer technology who is agreeable to teaching technology within the company, etc.  If all agents are NOT on the same schedule you want to know why all agents are not treated the same and how can you be given or earn this “special” treatment.  The real question is why you would want to work at a company where all agents are NOT treated equally and fairly.  Ideally the differences should be included on the commission split printed schedule and would therefore be available to everyone including you.
• What additional costs will I incur such as training costs, office fees, insurance premiums above and beyond the commission split schedule?  What you may earn with a higher commission rate you may lose by being required to pay additional costs for Training or other miscellaneous expenses within the company.  Make absolutely certain you are fully aware of all company costs you are expected to pay.  In fact, ask the person who interviews you to give you an example of exactly how the commission is handled in the company and how much you would earn on an average sale.
• If I join the company and it turns out that it is not working out for me, would I be able to take my current listings, my pending sales, and my customer database with me to a different company that I join?  Some companies WILL authorize you to take your business with you, some (actually a lot of companies) will NOT.  In my opinion I would avoid working at a company that would NOT permit you to take your business with you.  That, at least to me, would indicate they have something to hide from you and you do not want to start a business relationship based on mis-trust.  If the company indicates you CAN take your business with you, make absolutely certain that you get this agreement IN WRITING.
• If I decide to join your company at (enter the commission split) what do I have to do to get to the 100% level?  If they have a plan, they will tell you.  If they do have a plan, make certain you get the plan they have in writing.  If they do NOT have a plan, you may want to continue your research for the best opportunity available to you at a different company.

VERY IMPORTANT CONSIDERATION:  If it is your goal to sell real estate on a part-time basis, earning 100% commissions may not be your initial goal or even possible for you.  But…it has been my experience that a lot of agents “think” they are going to sell real estate part-time and then discover that a career in real estate is an outstanding choice and then decide to do it full time only to discover they made a poor decision regarding the company they joined at the outset.  Don’t make this mistake.  Make certain you engage in a due diligence period of researching the various real estate companies in your area and then decide which offers you the best opportunity to soar!

TRAINING:  In my state, Louisiana, you take real estate courses approved by the State and then take the State Exam to become licensed.  Unfortunately the courses you take typically do not have much information on actually listing and selling real estate.  Therefore the education you receive AFTER you become license is critical to your eventual success, or not.  Therefore, in your due diligence period of researching the various opportunities available to you, make absolutely certain you also ask about the training available to you and how much that training will cost you.

NEXT NUGGET:  How does your company handle incoming probable customer calls or Internet Inquiries?  How they do it can either enhance your ability to make more commissions or hinder it.  You will want to read this Nugget when available.