Comments on: Everybody Wants a Piece

By: Jonathan Dalton

Jonathan Dalton — Wed, 06 Feb 2008 01:23:21 +0000

I was thinking of your second comment as I read the first. Theoretically (and I’m not sure that I believe it) these companies run on very thin margins. Again, I don’t really believe it but I’m also a cynic who’s paid them too much over time.

I agree with your point about consumer-centric thinking. That’s one of the reasons I’m not with that company anymore. True, relo leads were “found money” inasmuch as it was business I wouldn’t have had. But when you’re making 3/4 of one percent, far less than the broker and the relo company and you’re the one looked to for flexibility when needed, it’s a losing proposition.

I’ll still work relos where I am but I’ve got a heck of a lot more flexibility to do what’s needed.

By: ARDELL

ARDELL — Tue, 05 Feb 2008 22:02:18 +0000

OMG. I just saw this in Inman! Talk about predictions…

“Financially battered relocation giant Sirva Inc., which conducts about 300,000 relocations per year, has filed for bankruptcy…”

By: ARDELL

ARDELL — Tue, 05 Feb 2008 20:18:01 +0000

Companies with said policy are rarely the innovative types that encourage more options for consumers…and they are many. Clearly any agent who wants to be innovative and consumer-centric, needs to find the right fit as to Company. Most are not.

Personally I think the whole relo system will be revamped in this decade and become somewhat obsolete as to it’s current funding structure.

By: Jonathan Dalton

Jonathan Dalton — Tue, 05 Feb 2008 18:45:14 +0000

It’s a business decision that easily could lead an agent to not make the accommodation to help a client in the future, though. And that’s unfortunate.

By: ARDELL

ARDELL — Tue, 05 Feb 2008 18:24:55 +0000

In my experience, which was with Coldwell Banker some years ago, whether the drop was elective, by necessity or due to a referral was irrelevant. Commissions dropped to 50/50 in all of those cases.

It’s not a penalty. It’s a business decision. Company policy is not “greed”. There are way more greedy agents than greedy companies, as this post points out.

By: Jonathan Dalton

Jonathan Dalton — Tue, 05 Feb 2008 17:22:05 +0000

Hi, Ardell!

Usually the 50-50 only applies to one side, whichever is impacted by the referral. The issue was the buyers side also dropping to 50-50 because the agent reduced her overall commission to make sure the deal got done.

There’s company policy and then there’s unmitigated greed. She also had been told by her manager that the second side wouldn’t go to 50-50 but he was overruled by the relocation department, which seems to run the show there.

By: ARDELL

ARDELL — Tue, 05 Feb 2008 16:19:37 +0000

Jonathan,

Doesn’t surprise me. I’ve seen many offices whose policy is that the split drops to 50/50 when there is a referral fee to be paid, or anytime the total is less than x percentage. I think it’s old fashioned, but clearly not a new concept.

By: Charles Woodall

Charles Woodall — Tue, 29 Jan 2008 14:03:58 +0000

Agreed that a compromise of some sort would have been the best way for the brokerage to handle this. What I took from your post (mistakenly it sounds like) was that the agent felt she was entitled to a full split. Maybe that’s just seeing things through my broker glasses. Then again, maybe its because I have seen and heard agents get on the “I did the right thing” stump to try to justify their belief that they shouldn’t have to share the pain in situations just like this one.

Of course, nothing like this ever happens in our office

By: Benjamin Bach

Benjamin Bach — Tue, 29 Jan 2008 10:49:40 +0000

I cringe whenever I hear stories like this. I used to operate my business out of an office where I wasn’t completely comfortable with the ownership – they were very old school, secretive, didn’t side with their agents etc – and after moving to an open book company where the ownership group is very helping, it makes a world of difference.

I just heard a very similar story to yours from an associate at my former office. Surprisingly, the broker took the extra $$ needed out of her split, while his son still got paid (not on his deal). Only one of the reasons I took my business elsewhere

By: Jonathan Dalton

Jonathan Dalton — Tue, 29 Jan 2008 05:31:45 +0000

Charles – she went to the manager for this office and was told she’d be fine. Nothing could be done at the time of listing because the situation didn’t arise until the contract was received. It’s the broker who overruled it, as best we can tell after it was presented by the manager of the relocation department.

Interestingly enough, the relocation department in this company theoretically is self-sufficient. And they have proven in the past they’ll suck every last penny they can out of a commission check, even if it doesn’t make the slightest bit of sense.

A compromise would have made more sense. After all, if she had let the listing expire then there would have been no money coming back to the company either. And it would be one more client who could report back to USAA that this company didn’t sell his home.