What Should I Share for Getting Help on Selling Properties?

Question

I have been a Realtor for five years. Last year, I moved to another state and obtained my license in that state, but am still somewhat active in my previous location, as I intend to still spend time there in the future.  I have worked out an arrangement with an agent in the office of my previous state to share certain tasks that I am unable to perform, since I am not physically there at the moment.  What is a good way to compensate this other person for helping out?  For instance, if I successfully obtain a listing or a buyer, work with them for a period of time to get them pre-qualified and even find potential properties for them, but have my colleague write up the offer, visit the property for appraisal or inspections, and potentially attend the closing on my behalf, how should I compensate them?  Is there a specific dollar value for each of these tasks that I should be paying for, or should I be splitting the commission with them instead?  I realize that the ideal situation would be for me to be able to handle 100% of the tasks myself, but for the time being, this just is not possible for me.

Anthony Turner · Answer

I agree that being present for all facets of the process is best, which is why I am 100% transparent with long-distance clients so that they know that I am living in the other state and relying upon associates for many of the on-the-ground activities. But because I already have a relationship with these clients in my previous state, through either past real estate work or other, personal reasons, they have been comfortable with the arrangement. I am just trying to find the best way to compensate the local agent for his work, in a way that is fair to both of us.  Thanks for sharing your thoughts!

Anthony Turner · Answer

Thank you!

Rhonda Cohen · Answer

My perspective comes from being a Keller Williams agent where the company culture is very collaborative and client focused.  Not everyone might agree but I would ask the question - what is the best way to have the client’s needs met?  My gut says an agent who is able to be present for the duration of the transaction serves the client best.  I would pass the client to a high quality agent you trust and receive a referral fee for doing so. Negotiate a referral fee that works for both of you.  This will also give you more time to focus on building your business in the new state.  Just my 2 cents.

Kristin Kiddy · Answer

@Anthony TurnerI co-listing would keep you in the loop more than a referral, which is probably best if you want to build client trust.  Much of the work involved is done with email, especially once you are under contract.  If all you need is boots on the ground to open a house or attend an inspection then you might discuss flat fees with a trusted agent.  Not being there for a closing can be tricky if the client needs hand holding or emotional support because another agent hasn't been working with them like you have and so I would recommend going the referral or co-list route if you are going to mis a bunch of closings.  Clients who are experienced don't often care if you are there or not and now a days they often choose to close remotely.

Anthony Turner · Answer

Thank you! Do you think a referral fee is better than co-listing the property when representing the seller, or co-representing a buyer with another agent? I assume you would still receive 100% of any volume credit for the transaction using the referral approach?  Also, do you have any thoughts on how much you typically would pay out of your commission for things like individual showings, or attending an inspection or closing on your behalf, if you were not available for those activities?

Anthony Turner · Answer

Thanks for your thoughts! If I had enough activity in the other state, I would consider hiring a licensed assistant.  I'm not sure my activity level in the state would pay for the cost of it at the moment.

Kristin Kiddy · Answer

I had a similar situation when I was going to be out of town for an extended period but had begun working with a buyer.  I did a referral with another agent in the office with a 50% split between the two of us for the period I was gone in case the buyer wanted to offer on one of the properties we were looking at.  The referral expired when I was back in town and could take over.  I would find an agent you like to work with and set up an agreement.  I think referral fees work best if they are structured to reflect what each of you are bringing to the table.

Sean Hayes · Answer

I run into a similar situation while I'm away with the Army. I think your best bet would be to hire a licensed assistant to handle your day-to-day tasks. I have a real estate team now as well so we all help each other when somebody is away.