- Mike Ferry – "It's 2013 … What I STILL Don't Understand" PART FOUR
I was invited to speak to a group of 30 independent Brokers several years ago. About an hour before I was to start, I was called by the leader of the group and was told that they had changed their minds and decided not to have me speak. I said, “Fine. Please send the check for my speaking fee and expenses up to my room.” The man said, “Well, we’re not going to pay you if you’re not going to speak,” to which I said, “We have a signed contract and I am here in New Orleans, so therefore, you are going to pay me whether I speak or not, as I have delivered on my half of the contract by appearing.” He then abruptly said he’d call back in 5 minutes and, when he did call back he said, “We’ve changed our minds. We’ve decided to have you speak.”
I then threw my notes away for the 3-hour seminar I had prepared and wrote across the top of the paper in caps “I JUST DON’T UNDERSTAND” and then I made a list of about 35 things that I don’t understand about the Real Estate business. I must admit, after doing the work I’m doing now for the last 38 and a half years, I certainly understand a lot less than I used to. So here’s one that I really don’t understand.
Agents demand extremely high commissions (whether they are productive or not) and Brokers give in to those demands (whether the agent is productive or not.) Then I hear nothing but complaints from the agent about the lack of service offered by the Broker in the office, to which I always respond, “How do you expect the Broker to give you any service at all when you’re demanding 80% … 90% … 100% of all the commissions?” There has to be a margin of profit for a Broker to provide service.
Then I hear Brokers complaining … “My agents don’t participate, they don’t attend, and they are not involved in my company,” to which I always say, “Why would they? They’re so independent with the high commission you pay them, and they believe they know everything about Real Estate, so why would you expect any participation?”
What I don’t understand is … why we have allowed this industry to throw itself into such incredible turmoil, where the agents become more demanding of the Brokers and the commissions they receive, and the Brokers can’t tell the agents what to do because they’re independent contractors.
For the majority of all agents in Real Estate … “Do you actually believe that because you get a 90% split, that makes you real smart? … Do you actually believe that?”
For the Brokers throughout the industry … “Do you actually believe that if you pay people these high commissions, that you’ll have enough income to survive and do the job that is necessary for agents to make money?”
What I don’t understand is … why we keep thinking that this is going to work. The system as we know it is broken, and it’s time that somebody stood up and said, “Let’s work to fix it.” That is not going to happen until Real Estate Brokers and agents develop a higher level of common sense and good business sense. Something for your consideration.
CEO – The Mike Ferry Organization
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