Wearing the greed blazer

Monday, 14 May 2012
Calm day fishing offshore Cocoa Beach.
Had an interesting couple of conversations last week. It began with an email two weeks ago from a real estate company in New York telling me that if I would sign the attached form agreeing to pay them a 25% referral, they would hook me up with one of their clients that was interested in purchasing property in our area. This was my first contact with this company.

It's not uncommon for agents to receive referral solicitations via email although, in my experience, the legitimate ones are typically preceded by a phone call or email from the referring agent with details about the client, specifics of the referral, type of desired property, etc. If I was hungry at the time and wouldn't get the buyer otherwise, I might consider the referral arrangement. I responded with the following; "Are you willing to modify the agreement to reduce the referral percentage if the buyer's broker commission offered is less than 3%? If I wind up selling your client something under $150K that only pays me 2.5 or, Heaven forbid, 2% or less, then giving you 25% of that small amount leaves very little left for me. I'm fair if you are." No response and I forgot about it.

Late last week I received a call from the brother of a client who purchased a condo recently. He said that he would like to work with me as his sister had highly recommended me. We discussed what he was looking for and we talked at length about recent sales, inventory and likely targets for him. After discussing the market and property specifics, he nervously mentioned that he had a "situation". The "situation" turned out to be that he needed to work something out to get his Realtor girlfriend paid a referral. Translation: He needed me to pay her a chunk of my paycheck for doing nothing other than inserting herself between him and the agent he already wanted to work with, me. His understanding was that it would be less than 10% of my pay. I told him that I'd be fair and hoped we could work something out.

Upon further discussion it turns out that she was the source of the email from two weeks earlier who never responded to my questions. About an hour after my conversation with him my phone rings and, Voila, it's the girlfriend who couldn't be troubled to call me the first time to introduce herself. She told me if I wanted to work with him that I was going to have to give her 25% of my commission. A demand like this would normally end the conversation for me but in the interest of helping my client's brother I was willing to pay the extortion if she would be somewhat reasonable. I asked if she was willing to be flexible with the amount of the referral depending on the situation we ultimately found ourselves in, a possible low commission deal or a situation where I might need to concede some of my pay to get the deal done, etc. Her response, "No compromise. If you won't agree to 25% regardless of circumstances I have another agent standing by willing to play by my rules." I told her that, unfortunately, her boyfriend would have to work with the other agent, not the one his sister recommended and with whom he wanted to work.  [A little background: Not all listings pay the same rate of commission. I have been paid as little as zero and as much  as 4%. In the case of a zero commission deal, 25% isn't going to matter but if a listing only pays 2% or less, her demand for 25% will likely whittle my pay into the not-worth-the-trouble range, hence my question about her flexibility depending on circumstances.]

After we hung up I imagine she got busy selling her boyfriend on what a jerk I was and that she's found another wonderful agent to help him. I wish him the best in his search and hope she got lucky and found a decent agent to help him but the chances are that an agent hungry enough to go along with her uncompromising demands is not one of the better choices for him. Think his new agent will be showing him low commission listings or be willing to concede any commission to get a tight deal done knowing that the remainder will be taxed at an onerous 25% before their broker takes his split? Not. To be fair to the pushy girlfriend, many brokers especially those affiliated with national franchises play the heavy hand to get their agents to aggressively pursue referrals. I've worked for a broker like that but never played along because the whole practice of referrals always smelled wrong. It's one of the many reasons why I work from my own brokerage now.

I hired an agent to sell my mother's house in another state last month. I can't imagine any scenario where it would have been fair to expect this hard-working agent to give me part of his check just because I have a license in Florida. His job was no easier because I'm licensed. It's like my niece expecting the The Fat Snook to give her a cut of my tab because she works at a restaurant in Clearwater. Agents out there, listen up. Stop being greedy and potentially damaging your clients by demanding part of some hard-working agent's pay. Just because this stinking practice has been tolerated for years doesn't mean it's right.

I'm left with a bitter taste in  my mouth about my chosen profession and reminded how much greed drives many of those who wear the blazer. It just makes me more determined to be as different from them as I can possibly be. I have never and will never request a referral from another agent because, no matter the situation, it just might, as in this case, negatively impact the client.

Yours truly, The Anti-Realtor

“The first time someone shows you who they are, believe them.” __Maya Angelou