Your First Real Estate Office, A Dozen Questions For Your First Interview
I’m going to suggest a few things you can do to make a better deal with your first broker. The relationship between a broker and an associate is not like the typical employer-employee relationship. That is the first basic difference between a corporate type job and selling real estate. You are not an employee. You are an independent contractor. Your new broker won’t tell you what he has to do. He will guide or lead you to do what he believes will lead to success. Let me tell you what they are looking for and what they are NOT looking for.
They are looking for someone who works hard. If you’re a hard worker, let the broker know. Tell him how hard you worked at your last job. They are also looking for someone who presents a good image. Any interviewer knows that what you see across the desk today is the best you can get. Men, wear a suit. Ladies, you know what the equivalent of a suit is. Dress. I’ve had people come to a job interview wearing jeans and a t-shirt. Who would want that person in his office even if she was selling a million a month?
If you have sales experience in other industries, let the broker know. Let the broker know that you want to be successful. This is no time for restlessness or modesty. Don’t leave them wondering if you have enough desire. Also, let the broker know that they can train you. Most brokers don’t look for new and fresh ideas. They are looking for someone who will implement their ideas. Make it look like it’s you.
Put a smile on your face. When you cross the threshold of the office, put on your best smile and keep it there until you get back to the car. It’s amazing to me how many people don’t smile. Smile.
Mr. Broker is looking for happy and optimistic people. Don’t complain, whine, or make excuses. I’ve interviewed many people who give me twenty-one reasons why they can’t be successful. The easiest thing is not to hire that person. Mr. Broker is not seeking recruitment aggravation.
Suppose you have made a good impression and Mrs. Broker wants to hire you. This is the important part.
A good question to ask Mrs. Broker is “How much money can I make here?” The answer should not be vague and ambiguous. Mrs. Broker should be able to show you what she has to do to earn a certain amount of money per year. If the broker asks how much she wants to earn, a good answer to that question is 150% of what she earned last year. If she made fifty thousand at her old job, seventy-five thousand is a worthy goal for her first year in real estate. Mr. Broker should be able to tell him what he needs to do to earn that.
This may surprise you, but most real estate salespeople don’t work very hard. If you go to any reasonably good office and actually go to work, you can make an extraordinary income. You must learn to prospect. You must learn to present. You must learn to close. Find a broker or sales manager who can teach you these things.
A very important concept in real estate is that you will make more money listing real estate than selling it. Look for a company with “nail listing”. Your reputation and standing in the community should help you get listed. Look at franchises and look without franchises. Which is better? Who knows?
This brings us to our next question to ask Mr. Broker. Express it like this; “If I sell (or put up for sale) a hundred thousand dollar house, how much will my check be?” Get this question answered in detail. Many brokers have hidden costs or fees such as transaction fees or franchise fees or any fees. This is not necessarily a bad thing, but the best surprise is NOT to surprise. This is important. Use the same number each time. Don’t use $100,000 with one broker and $200,000 with another. Use the same number each time. Make sure you understand the answer to this question.
I assume you learned in your pre-licensing course how commission splits work. This can range from as low as 50-50 to 100%. No matter what they offer, ask “Can you do better than that?” That’s a good question in any negotiation. If they offer 60-40, ask for 65-35. Many companies offer an internal bonus if you sell a company listing or if your co-worker sells your list. Ask about it and make sure you understand how it works. Some companies pay a bonus to the listing agent but not to the listing agent. Some companies pay a bonus to both.
A good way to make sure you understand this is to read it in your company’s policy manual. Which brings us to another good question; “Do you have a policy manual? Can I read it?” It is important that the company has a policy manual. If they don’t, the broker just makes up the rules as they go. It’s important that they have a policy, but ask the broker “Do you have the authority to make exceptions?” Brokers and sales managers like you to believe that all rules are concrete and cannot be waived. Anything can be changed or excepted.
Here is an example. Ask your new broker to pay you 100% of the out-of-town referrals you send. He can do this if he wants. This is not expensive for a broker because most of their agents never send a referral. Maybe you never will either. If Mr. Broker agrees to this, he will earn more money if he does.
Ask Mrs. Broker to pay the cost of getting your license in your first check. We’ll see. You paid $220 for real estate school tuition. He paid $105 to apply for his license. He paid $57 for her fingerprints. He paid $31 to take the test. “Could the company reimburse me for this on my first check?” What if they say no to everything except tuition? Do you have that. Ask. It’s funny about real estate brokers and their way of thinking. Most brokers are very reluctant to pay for an agent’s education up front, but will agree to reimburse you for the education after you’ve experienced it. Why not include that in your employment contract? Here is the question. “Would you agree to reimburse me for the real estate-related education tuition that I invest in myself?” Many will say yes. This will put a few shekels in your pocket in the future. It will also help you make up your mind to go see that great coach who’s coming to town for fifty bucks a seat. Now all you have to invest is your time. This is a good decision for the broker as well. An educated agent is a productive agent. Your broker will benefit from this as much as you will.
Find out which countries to advertise. Who pays the Board of Realtors fees? Who pays for E&O insurance? Who pays for the initial training? Don’t pay for initial training. The best surprise is still no surprise.
Here is another great question. “When do I get paid?” In Florida, if the closing agent is instructed by Mr. Broker to pay the seller at closing, the closing agent may give you a check at closing. I like that. Another system is that the agent receives a check at closing in the name of the company. The company then writes a check to the seller two or three days later. Ask the broker to pay you at closing. If the broker is reluctant to do so, make sure you know exactly when he will receive your check.
Here’s another issue you need to address; your own house or should I say your home (where you live). When you get into real estate, your income will most likely increase. Combine that with the fact that you’re walking into houses every day. You start to become an expert on home values. One day you see a super bargain. He decides to buy it and move into it. Suppose the price is three hundred thousand dollars. You are listed with a competitor in MLS at a six percent commission. What about the commission? $300,000 X.06= $18,000. Your company’s share is $9,000. Wouldn’t it be a nice gesture if the company left you one hundred percent of that commission? Nothing keeps an agent working hard like a big house payment.
Many years ago, one of my students told me that he wanted to go work for Broker A, who offered him a 60-40 split, but Broker B offered him a 70-30 split. He asked me for advice. I suggested that he make a deal with broker A that he would accept the 60-40 split if the broker agreed to pay him 85-15 on his third close each month. Broker A was quick to agree to this because he did not expect my student to sell three houses a month. After his second month in business, he never had fewer than three closings. You don’t need written goals if you have a deal like this. I had another student make a deal with his first broker that the company dollar he paid the company would never exceed twelve thousand dollars. That means he would have to bring in thirty thousand dollars in a 60-40 split to maximize. The broker agreed to that. If you earn twelve thousand dollars a month from a broker, you are an asset to the company.
If you meet with a company that has a non-compete clause in their contract, just say NO. This is a clause that says if you leave the company you cannot go to work in the same industry with another company within fifty miles for two years. I foolishly agreed to this with a real estate school in my foolish youth. I think that business lesson cost me about a hundred thousand dollars. I’m sure it cost me ten thousand five hundred in attorney’s fees. You will not be with this company forever.
Speaking of not being with the company forever. Since we know you’ll be leaving one day, make an agreement that when you leave, the company will pay you a twenty-five percent referral fee on any listings you leave behind. If you ignore all these tips in this article, implement this. I left a company once and dropped thirty-eight listings. Do the math on how much money was left on that table. A broker will probably agree to this easily now. He wouldn’t agree to this after having a bunch of listings.
This written employment agreement will govern your situation for a long time. Take it seriously. As I mentioned earlier, nothing is cast in concrete. As you start to do better and make some money, you can always modify any deal. It’s easier to get a good deal in the first place.
Good luck with your new career. Selling real estate is a great way to make a living and make a difference. Work hard. Pay attention. See a lot of people every day.
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