Well, you already know the answer to that question. Every day we are bombarded with email campaigns from different real estate companies promising everything from training, leads, free office space, “latest technology”, support and so on, all with no monthly fees and 100% commissions. My all time my favorite one is the “no E&O insurance” (Do you really want to be in business with no insurance?).
When I see these email solicitations I often wonder to myself, “How can that be?” Every brokerage business is exactly that, a business. These businesses have expenses including staff, rent, utilities, copier, Internet and phones just to name a few. Let’s keep in mind that the owner also hopes to make a profit.
Next time you get these solicitations ask yourself this. How can they possibly offer all this and pay the bills let alone make a profit?
I recently had a discussion on this subject with an agent and his answer to me was “so what if they don’t? Who cares? I get my commissions. If they go broke that’s their problem.”
A common misconception many agents have is that the commissions belong to them. In reality the commissions actually belong to the broker. In the event the broker “goes broke” all of his/her receivables are seized by the trustee who is obligated to pay all the creditors in order of priority. Believe it or not, the agents are at the bottom of the priority list and often receive pennies to the dollar of what they are owed if anything at all.
Naturally people are then quick to threaten lawsuits to receive their commissions, but that eagerness to sue changes with the first visit to an attorney and the demand of a retainer. Lawsuits are both lengthy and costly and ultimately if the broker has gone broke you will only be spending good money chasing after bad.
Please don’t misread what I am saying. No one is suggesting that you shouldn’t try to get the best deal for yourself. In fact we encourage you to do so. But you must be prudent in your due diligence. If the numbers don’t make any sense then either the deal is not what they are saying or you stand a chance of losing your hard earned commissions.
Think of it in these terms. Have you ever competed for a listing only to lose it to another agent who simply overpriced it or made unrealistic promises to the seller?
Always remember… If It’s too good to be true, it probably is!!!!!
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