Why Alternative Compensation is a Great Benefit to Realtors

Why Alternative Compensation is a Great Benefit to Realtors

By Glenn Freezman

Yesterday I received an email from eBay which informed me (with a big, dramatic headline) that ‘The Collection Has Arrived!!’ I’ll admit it made me curious so I clicked on it. It turns out that the offer was for…wait for it…women’s dresses.

I’ll go out on a limb here and say that I’m not the dress wearing type (well, there was that Halloween many years ago but hopefully by now the negatives have all been burned), and somehow doubt that pretty, floral dresses are going to become part of my wardrobe in the near future.

Obviously, eBay didn’t really think a lot about who they were sending this e-mail to. As far as they were concerned they had a mailing list and I was on it. But think of the absolute waste of time and resources going on here. I am in no way the person that they were trying to reach yet I have very little doubt that thousands or maybe even millions of other men received the same e-mail that I did.

The reason I bring this up is because we all understand that when it comes to advertising there is no such thing as one size fits all. We’re all different people who have different needs at different times. For a company like eBay to offer only a single message without any consideration for being it being relevant or not to the recipient is just really bad practice.

However, before I threw too many stones, those of us who dwell in the real estate world are often very guilty of the same bad practices. While we may work with different homebuyers and sellers, and even if we think we are offering somewhat customized services, in the end we often default to very common ‘one size fits all’ real estate agreements in order to get the job done.

Like my lack of need for pretty dresses, there are plenty of home buyers out there who don’t need a ‘standard’ commission-based real estate agreement. Instead, these are people who are willing to take on many of the home buying responsibilities that may have traditionally been handled by their agent. These are people who want to be involved in the purchase of their home. They want to do the research, find the homes, tour the homes and make decisions using the tools that are now readily at their disposal. In short, they want to handle what they can, and hire somebody else to handle the things they can’t. Yet, most home buyers are only offered an ‘all or nothing’ agreement that says to them ‘If you want my help, you have to pay me a commission.’

At Nucazza, our goal is to not only educate home buyers about the options available to them in finding and using alternative compensation models when buying a home, but also work with Realtors and brokers to help them better understand the huge benefits that offering these alternative agreements bring to them.

Here are a few things to consider:

• Realtors and brokers who offer alternative compensation agreements such as task or fee-based agreements, hourly agreements or any other kind of à la carte task and compensation arrangement, can dramatically expand their businesses by creating a new stream of income. Offering alternative agreements to home buying clients doesn’t mean giving up commission based agreements as well. There will be clients for whom commission based agreements cover their needs. But for those home buyers looking for alternatives, being a Realtor who offer them will also help you stand out from the crowd.
• According to the National Association of Realtor’s statistics, Realtors in the United States close on average one out of every four agreements that they start. This means that 75% of the clients they work with will vanish off their radar before they ever get into a new home. This also means that 75% of their potential income never arrives. Realtors who offer alternative compensation models can get paid directly by home buyers for their time when they do things on behalf of that client. Just like other professionals, Realtors can charge by the hour or by the task for their services and get paid for the work they do when they do it — even if it turns out that the client changes their mind later and decides not to buy a home. If you factor in the value of all those wasted hours and what it would mean to be paid even $50 an hour for all that wasted time, you can get a better sense of what potential paydays would look like.

And like homebuyers, this is not a one-size-fits-all opportunity for Realtors. Some Realtors will balk at the idea of giving up the traditional compensation models. That’s fine. Like the people they serve, Realtors should have choices too.

About the Author

Nucazza, aligns itself with banks and credit unions all over the country to bring the message of choice and transparency to the banks customers.   Through Webinars, co-branding and a message of positive choice we can identify home buyers on behalf of the lending institution and give them all the tools to make an informed decision as to how they wish to buy a home and how they wish to pay for the services provided. Nucazza, LLP will pass all interested home buyers to our database of participating Realtors. We are a free service to the home buyers as well as all ACRE graduates. We are an ACRE industry partner in the education, effectuation and Rabble Rousing of the Alternatives to Commission.

While in my 25th year as a multi-state title insurance agent I am fulfilling a promise I made to myself just 3 days into my new career. “This industry is broken, I need to part of the change” Over my tenure, my company, Family Abstract, Inc. et al has been involved in over 100,000 real estate transactions.  The number one question that continually rose was regarding the commissions being paid to the Realtors(r) at closing.  The buyers insisted it was their money that paid for the commissions since it was added to the sales price, the sellers believed it was their money because it was paid as part of the sales price and the “Gentlemen of Real Estate that began it all were smart enough to put it in the Agreement of Sale to protect their own ASSets. Question 1A was, what does 6% commission have anything to do with the value my agent brought me?  How does one equate to the other?  Why am I handing money to everyone?

Nucazza, LLP, was created as a way of giving back for an incredibly rich life that I have gotten to enjoy thanks to the real estate industry. I see great changes coming in real estate all to the benefit of our children and our grandchildren.  Both as buyers and sellers as well as for those that become a new  “Evolutionary” Realtor all will enjoy the richness of life that will be associated with this profession.

My job is Chief Evangelist, You don’t know me… But you will

Andy Banker/Glenn Close Interview St. Louis

BARNUM GLENN CLOSE JIM DALE CY COLEMAN CAST SIGNED BROADWAY CAST ALBUM $35.00

The Big Chill Poster Signed By Glenn Close ++ PSA/DNA $186.99

Genuine Glenn Close signed autograph professionally Mounted & Framed 12×16 inch $31.82

GLENN CLOSE Simpsons Autographed Signed 8×10 Photo Certified Authentic COA $59.99

Glenn Close genuine autograph Lobby photo 8″x11″ signed IN PERSON $39.99

Curve The Best Selling Lesbian Magazine, Glenn Close, Angelina Jolie The Shondes $0.99

The Big Chill [VHS] Tom Berenger, Glenn Close, Jeff Lawrence Kasdan R (Restric $3.87

The Big Chill (15th Anniversary Edition) [VHS] Tom Berenger, Glenn Close, Jeff $3.87

RARE COLLECTIBLE PIN UP CATHERINE ZETA JONES AND GLENN CLOSE 102 DALMATAS $4.25

1985 Press Photo Actress Glenn Close In Orion Pictures Movie Maxie $33.88