Client wants to pay on a commission basis.. how to do this?

13 years ago

Hmm..... Really two questions. Making sure you know who the referrals actually are and then making sure you find out what happened to them.

First one is easy, I would just setup a system where you collect the info and then forward it to her. Whether it is a phone number or an online form you need to insert yourself into the loop like you suggested so you know exactly who you are sending to her. If you want to do a phone number there are answering services that you could use that are pretty reasonable and work well for something like this, all they would need to do would be to collect the info for a call back and forward it to both her and you.

For the second one that is a bit tougher. I would come up with some kind of report that she would need to send you weekly/monthly on all the contacts you send her. Knowing that you have all the referral info and regular reporting should help keep her honest.

Setting up your own site and system for collecting the info has another couple advantages. It should also help keep her honest because she knows if you catch her screwing you over the leads will stop. Second it would be very easy in that case (or any other issues with her) to just forward the info to someone else. Suppose you find out that she just plain sucks and can not convert any of the leads to sales? If you are collecting all the info you can make a deal with someone else who does a better job.

Thanks

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John Romaine

13 years ago

Originally Posted by wilder1047

I generally just charge a flat fee for my clients.

Stick to your business system.

Don't start changing the way you do business to accommodate one client. It's not worth the hassle. Seriously.

Sometimes you're better off saying "Thanks, but no thanks"

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Tang

13 years ago

Originally Posted by ramone_johnny

Stick to your business system.

Don't start changing the way you do business to accommodate one client. It's not worth the hassle. Seriously.

Sometimes you're better off saying "Thanks, but no thanks"

This is exactly right. There is simply no way to insure she will not 'misplace' a sale or two.

Set a flat rate per lead. If your leads are good, she will be knocking down your door with more cash in hand.

Thanks

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Troy Broussard

13 years ago

Originally Posted by ramone_johnny

Stick to your business system.

Don't start changing the way you do business to accommodate one client. It's not worth the hassle. Seriously.

Sometimes you're better off saying "Thanks, but no thanks"

Exactly. I have had clients want to do the same thing and simply refused on various SEO or marketing endeavors. In the end on this type of a deal your paycheck will depend on how well THEY CONVERT their sales and personally I'm not willing to be reliant on someone else's abilities.

The best thing to do is simply either charge a flat fee, or, take it a different direction...

Instead of a commission, simply agree to sell them leads for $50 apiece or whatever value. Then the burden is on them to close the sale and you will not be penalized if they don't. Honestly that is the fair way to do it. Establish a value for the lead or establish a value for the service from the beginning.

Keep it simple...

Thanks

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wordydiva

13 years ago

Originally Posted by ramone_johnny

Stick to your business system.

Don't start changing the way you do business to accommodate one client. It's not worth the hassle. Seriously.

Sometimes you're better off saying "Thanks, but no thanks"

Seriously consider this advice.

It might seem like a great opportunity, but is it really worth the trouble of changing how you do things? Not only will have to figure out a way to monitor all the leads, you'll also constantly be worried about whether or not you're getting paid the commission you earned.

Thanks

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mikeseocool

13 years ago

You are in danger of referral shaving. Sometimes its better to put down the deal and search for a more safer choice.

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mrdanilodiaz

13 years ago

Tell her that you are interested, but you haven't tried this payment method before.
Ask her what she thinks the best way to track for your referrals.

If you like her method, then go for it.

Thanks
1 reply

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speedylikesKJ

13 years ago

Don`t think so she will cheat you if you bring her quality leads as you are a value able source for generating sales ..and who the hell will want to loose such resource ..just be honest from your side and she will be honest with you ..at least give her a try ?

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JohnMcCabe

13 years ago

Depending on how any agreement would be worded, she may be endangering her license. In many areas, it's okay to pay 'bird dogs' for leads, but paying commissions on closed deals only could violate local regs.

Which would also give her a perfect excuse for not paying. "I never agreed to pay commissions on closed deals - that would be a breach of ethics..."

Stick to your normal practice.

Thanks
1 reply

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Sardent

13 years ago

Indeed. In many states it is illegal for anyone except a broker to be paid a commission for a real estate sale.

Originally Posted by JohnMcCabe

Depending on how any agreement would be worded, she may be endangering her license. In many areas, it's okay to pay 'bird dogs' for leads, but paying commissions on closed deals only could violate local regs.

Which would also give her a perfect excuse for not paying. "I never agreed to pay commissions on closed deals - that would be a breach of ethics..."

Stick to your normal practice.

Thanks
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wilder1047 13 years ago

Interesting.

Appreciate it guys!
- Thanks
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sbucciarel

Banned 13 years ago

Originally Posted by wilder1047

I generally just charge a flat fee for my clients.

I recently got in contact with a real estate agent and she has offered me 25% commissions on all the referals I send her way that she ends up closing.

I'm aware of this pricing scheme and obviously very interested- trick is... how do I make sure I'm getting paid for my referals? Just hope she plays by the honor system?

Or maybe a contact form to fill out and have her contact them back - so alteast I know who's contacting her.

Anyways - I'm sure you guys will know exactly how to dial this in - so I appreciate any responses.

Thanks in advance!!

I wouldn't do it. There's no way to keep her honest. I have been offered many times a share of a site revenue if only I would build the site.

No ... nada ... pay me or build it yourself. Why should you take the risk? You're doing the work and she's getting the benefit. How could you possibly know whether or not she closed or whether or not she is even capable of closing a deal?

Thanks

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seobacklinkfinder

13 years ago

I have had the same discussion.
Fact is, if in the best case you have only control about the leads, but not the sales, it should end in leads. Ask her what are her costs for 1 lead. If that is an interesting figure for you, sell her the leads. If she donot want to buy just leads, then ask yourself why.

Thanks

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hotftuna

13 years ago

I have charged per lead for years. I charge for each contact form that does not contain obviously bogus info (first name: Joe, last name: Blow).

I also set-up a toll free phone number and charge for unique calls each week over 2 minutes. This is easy to do and the toll free# gets folks to call.

Thanks
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Joe Mobley 13 years ago

Originally Posted by wilder1047

I recently got in contact with a real estate agent and she has offered me 25% commissions on all the referals I send her way that she ends up closing.

This places your income based on her closing ability. Not for me.

Originally Posted by hotftuna

I have charged per lead for years.

Exactly my next thought. If you are new to this I would start with a month-to-month arrangement. If it is not working for you, give her 1 months notice and you're done.

If, after some tweaking, this model works for you, contact other agents. Do Not agree to an exclusive arrangement.

Hey, that's just me thinking.

Joe Mobley
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Ducksauce

13 years ago

It's not like a 'Real estate novelist' to pull your chain is it now. !!!

I did meet an honest one once !!!!! once...

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bdavisx

13 years ago

Funny, I remember reading a book about a guy who got screwed exactly this way. He setup real estate deals and handed them to an agent; then the agent said "It's illegal for me to give you a commission because you don't have a RE license...". Nice. Even though the guy had a contract, it didn't matter because if a contract states either party has to do something illegal, then the contract is invalid. I might be remembering the whole story somewhat incorrectly, that was the gist.

I think the book was Winning Through Intimidation By Robert J. Ringer btw. An interesting book and not as bad as the title makes it sound.

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mr2monster

13 years ago

In my opinion, it's next to impossible to make that work without someone eventually feeling like they're getting ripped off.

A MUCH better way to do this is to sell PER LEAD (Not per sale).

Major reasons:
1. Transactions in real estate take a long time... by the time it's all said and done, unless you have an iron clad, bullet proof way to track and prove you sent the referral, the agent will "forget" that they owe you the fee and you'll have to fight to get your commission. Tracking is a NIGHTMARE to do it this way if you're doing any kind of volume.

2. You're depending on their ability to close the deal in order to get paid. So, if they suck at closing, then you don't get paid.. If you sell on a per lead basis, then they pay you whether or not they can close.

Real estate leads can go from anywhere in the mid 20's to the $100+ range depending on how much info and how pre-qualified they are... but I'd avoid taking payment on a per-sale basis at all costs.

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Davioli

13 years ago

I understand the situation you're in. Its very simple

1) Charge per lead

2) Give her the first 5 leads for free.

Depending on how well those first 5 leads go.. you can then charge her a fee per lead.

Thanks
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Kay King 13 years ago

I recently got in contact with a real estate agent and she has offered me 25% commissions on all the referals I send her way that she ends up closing.

I'd say "no" - very few leads ever get to the closing table. The exceptions are leads that come through corporate headquarters for employee transfers and those aren't happening much in this economy.

Also - this is illegal in several states under the real estate laws so that's something you would have to check.

And - you have no idea if this agent knows how to sell or how to close. It could be like dropping leads into a very deep hole.

Very bad idea from your point of view - great deal for the agent.

kay
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sredro

13 years ago

wilder, did you ever figure out how to get someone either leads or work on a commission basis? I would like to work with someone on such a basis if it is reasonable. thnx sero

Thanks

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sredro

13 years ago

wilder,
have you figured out how to either get leads or work on a commission basis? I am looking to work with someone on a similar basis. thanks, sredro

Thanks

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Client wants to pay on a commission basis.. how to do this?

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