I met my pastor friend today for lunch to discuss the upcoming church that we are starting in Georgetown in 
September. As I was turning into the parking lot of the restaurant, I saw a middle-aged man who was about to cross in front of me and I wondered if he would stop or look to see my car (and others) before crossing in front of the traffic.
Mentally, I was screaming at him - "Don't do it! Please at least turn your head 15 degrees to either side. You could be mowed down in an instant. This is a busy shopping center. What are you thinking? Are you not thinking?"
Thankfully, I was alert enough to realize that he had no intention of noticing my van barreling down on him, so I slowed to a crawl as he crossed the street on foot, never once noticing that he was nearly killed or injured.
I have often marveled at this fact while driving. How do some people manage to survive into adulthood without ever being careful? Only by the hand of God was this man's life spared for another day.
Then, I started to think about the real estate business, and how it requires us to be constantly aware of our own surroundings in order to adapt and survive in turbulent times:
- Would it behoove me to learn more about foreclosures and short sales these days? I have learned more about this topic in the past several months than I would ever have cared to know previously.
- As a broker, should I be hiring more agents in order to increase my chances of having a decent income? In a nutshell, yes.
- Where should I invest my time and money for the best return on my investment?
There have been a few tough years during my career, and I found it to be important to adapt to the changing climate. For example, the the months after 9/11, much of my job was spent helping my clients to feel comfortable that the economy would in fact rebound (and it did). Today, I find myself in the same boat, telling buyers that it is a good time to purchase, as the economy will rebound (and it will).
I got a home under contract yesterday. The buyer was referred to me by an agent in Idaho who found me online. When he called to discuss the possibility of referring the buyer to me, he mentioned that he would be interviewing a few other agents, and he also mentioned that the buyer needed to close in the first half of August, as his current home was already under contract. I asked him how much he wanted for the referral fee, and he said he wanted 25%.
"How about I pay you 30% instead?", I replied.
"Well, that would be GREAT!", he said, "I think my client will really like you. I will send you the paperwork tomorrow."
As you can see, the other agents didn't really have a shot at the business at that point.
A few years ago, I might have taken my chances with this referral, because I know that the chances are good that I would get the business anyway. However, my point here is that I know how scarce motivated AND qualified buyers are in the current market, so why risk it? I would happily pay 5% extra to ensure that I get that piece of business, and after a few hours of my time, they have already selected a home. This will likely be a quick $8000 commission for our company.
In my humble opinion, our business demands that we pay attention to shifting trends and react accordingly.
Don't let the market run over you. Pay attention and you will thrive.
Copyright 2008 Jason Crouch, Austin Real Estate Broker
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Great point on closing the deal on the buyer when they are in front of you Jason and not quibble over pennies. Too many agents don't know how to close deals and get over objections.
Also a great point to just keep your dang eyes open! The ability to be truly aware of things going on around you can help agents so much! From getting to know clients to fielding objections to finding that great deal, it can all be helped with awareness.
Jason...
And we have to understand that buyers and sellers are changing too. We have to do much, much more to accomodate them now!
That was a good idea to offer the other agent more money. I don't know if I would've - I don't normally think like that. But, I think I will in the future... :)
Good analogy and sage advice. I doubt that most people would have recognized the opportunity and seized it the way that you did.
Some days it seems like a huge semi truck barreling down the road; it's hard to get out of the way. I agree with you that our business needs all the attention it can get in this market. If we snooze, we lose.
Having been run over by a truck, I can attest to the need to pay attention to our surroundings.
Good call on bumping up the referral fee without blinking an eye, Jason. Love the way this story turned out!
"How about I pay you 30% instead?", I replied.
Hi Jason,
What a great way to react quickly to an opportunity! I've been thinking about this exact strategy for some of my clients. After reading your success story, I'm going act now instead of just thinking!
Simply said............ I love the way you write.
Thanks
Barbara Jo - Bill
It's great to hear a success story, Active Rain offers many opportunities. Great information and referral potential.
Good luck and Success
Lou Ludwig
Jason - Good business decision. Your quick response just cemented the deal.
Jason, good thinking, great analogy (even though it was little too long:-). btw, if you have any buyers looking in Westchester county, send them to me, I'll give you 35% (I'm serious:-).
Now, Jason, I know it's Texas. But don't pedestrians have the right of way down there? And you make a good point. You need to adjust your strategy to whatever the market is doing.
Jason - I like the way you told a story to illustrate your point. We all need to stay allert and be ready to change with the times. Good thinking to give up an additional 5% to get the deal.
Jason, great response. I have to admit I wouldn't be that quick to part with commission but when you look at the big picture of future business and future referrals, its all good. great job
Pat - Good question. Even if he had the right of way in this case (and I don't think that he actually did since it was basically the entrance to a parking lot off of a very busy road), he was still being foolish.
Jason, as always, you have given us all a great lesson to think about. Giving the extra 5% brought in so much more!
Holy cow! I just read AMANDA's comment. How do you just throw something like that out there as a casual reference?
Jason, I'm also amazed at the drivers who back out of a parking space and NEVER look behind them. I guess you could equate that to real estate also. It is easy to get busy and not look where we are going, either front or back.
Jer - I thought that was a no brainer under the circumstances.
Erik - Amanda is my buddy, so I know the backstory there. If you email her, she might share it with you, too.
Marchel - Agreed. That is a huge pet peeve of mine as well.
No risk no gain.
Well written as usual! You think quick whether you're behind the wheel or not...I now stay more alert than ever to client cues (mostly buyer) that could tell me my time could be better spent elsewhere.
Hi Jason...Where am I? I don't recognize my surroundings.
Interesting that you mentioned upping the referral. You must have had a gut feeling that that would do the trick. I'm glad it did.
I had a call from a retired RE/MAX agent/broker looking for someone to help her son sell a home. She asked me what I pay as a referral. I told her 20 or 25%. That was honest. I have done both. Never less and never more. She said where she had worked it was 30 or 35%. It will be 25%.
However, I am not sure I will have the listing as my suggested list price may be well below what the seller has in mind. I will be looking at the house tomorrow morning. Who knows?
I wish I had dozens and dozens of clients to send you. Yes, I do accept 30%.
Have a good time selling your client a great house.
Kate
Jason, it is funny that you say that because that one thought changed us from being seller focused to buuyer focused a couple of years ago. We saw the market shifting. We were a young company and did not have many listings anyway. So, when we saw the shift, we shifted, and we are very glad that we did. Being aware may mean changing your business focus ever so often. It does not mean you will not work with sellers (or buyers) it just means that your "target" audiance may change for your advertising.
Hi Jason, Thank You for your post about being aware of your surroundings! You were clear, concise and compelling in your principles and illustrations. You are an inspirational and motivational writer who really connects with the heart and head of your readers (that includes me!) President Ford once said that if he could become a college student again he would concentrate on perfecting his communication skills of speaking and writing. You are following in the footsteps of a former leader of the greatest nation on this earth!