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Focus on Leverage – the Buyer Side

In The Millionaire Real Estate Agent, we declared you could be just three exceptional hires away from having the organization of a Millionaire Real Estate Agent. That’s still absolutely true. However, our ongoing research for both MREA and SHIFT has given us new insight into how these key positions evolve. Some of you got a sneak peak at Mega Camp 2009. For the rest, here’s a quick look at hiring and compensating a Showing Assistant.

Leverage is ultimately about focus. You hire talent to keep you focused on your most dollar-productive activities and they focus on everything else. After entrusting your admin and marketing chores to another person, you look for help on the buyer sales side of the business. Successfully showing homes can be extremely time intensive and help here should keep you focused on leads and listings. So who do you hire?

In the past, research pointed us to a licensed buyer specialist paid on a 50/50 commission split. Today, some successful agents are first hiring an unlicensed Showing Assistant to keep their costs of sale low and their productivity high.

A Showing Assistant can literally jump into the driver’s seat with your buyers while keeping you in the driver’s seat when it comes to converting buyer leads, getting signed agreements, identifying wants and needs and eventually writing and negotiating contracts. A good one should be able to successfully show homes to around three to four buyers a month while earning bonuses based on 25 percent of each deal. Based on a $5,000 average commission, a good Showing Assistant could earn $60,000 a year. This is a terrific opportunity for someone. Better yet, you get to stay focused and 75 percent of the buy-side income stays on your side of the ledger.

You are still looking for someone who has the ability to grow into your Lead Buyer Specialist. So when you have someone with the ambition and proven ability to succeed with a high volume of buyers over time, your Showing Assistant earns the right to be promoted to a licensed Buyer Specialist. Your Buyer Specialist would then handle buyers from the appointment to closing and now earn 50 percent of the commissions. Again, a good one should be able to handle three to four buyer sales a month without burning out.

Burnout is a key word. Once you have identified a great Buyer Specialist, you don’t want to lose them! When they burn out and walk out, guess who gets their job? You do. And you’ve already got a job.

When your business is generating enough leads on a consistent basis to push a great Buyer Specialist past their ability to successful manage them all, the Showing Assistant concept reenters the picture. Now your Buyer Specialist has the opportunity to hire a Showing Assistant of their own. The Showing Assistant is still paid on a 25 percent bonus; however, that money comes out of the Lead Buyer Specialist’s half of each commission. Effectively, you continue to earn 50 percent of each buyer transaction, while the Buyer Specialist earns 25 percent and the Showing Assistant earns the final 25 percent as a bonus. Any buyer transactions your Buyer Specialist closes without the help of a Showing Assistant would still be on a 50/50 split.

Now your Buyer Specialist might successfully help four buyers on their own and another four with the help of a Showing Assistant. That’s now eight closed buy-side transactions each month. And with an average commission of $5,000, your Buyer Specialist has the ability to gross as much as $180,000 a year while just personally showing three or four buyers a month!

Showing Assistants may come and go—each auditioning for a shot at being your Lead Buyer Specialist. But once you find one, hiring and managing Showing Assistants moves from your plate to theirs. You have found your leader for working with buyers. Any additional help needed to keep your buyer transactions on track becomes their issue and opportunity.

Showing Assistants can save you money on the frontend, reduce turnover on the backend, all the while providing the best possible service to your buyers.

Click here for a video highlighting The Organizational Model and MREA.

(with Jay Papasan)

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  • codygibson

    I think this is an incredible AHA for many Megas! I am sharing it with the top teams in my office now and we will be masterminding how to implement it in their businesses. Thank you for sharing this!

  • Pingback: Learn to LEVERAGE yourself – the buyers side « Keller Williams East Boca Raton()

  • billbyrd

    As I sat at Mega Camp watching this presentation with my Lead Buyer Specialist…he practically fell out of his chair! He loved the fact that he could bring leverage into his job other than using our existing staff. We are about to start implementing this idea of using showing assistants and would certainly like as much information on this topic as possible. Thanks for posting this so I could get another look at it! My notes had a few holes in them!

  • http://www.imagineyourhouse.com Lynn Pineda

    This post couldn’t have come at a better time for me as I seem to be busting at the seams right now. This is some fabulous advice to consider. Thank you!

  • http://www.stevensells.net stevenligon

    I love this concept, but in Oklahoma, I am 99% sure that showing a house requires a real estate license. Would 25% be enough for a licensed showing assistant?

  • Jay Papasan, VP of Publishing and Executive Editor

    We’ve heard from top agents who offer as little as 20 percent. It really depends on your value proposition to the showing. Just realize if you offer more then 25 percent, then your Buyer specialist will be working on a smaller margin. If the Showing Assistant earns 30 percent, then the Buyer Specialist is left with 20 percent.

    This assumes, you won’t accept less than 50 percent as the Mega agent generating the leads and that’s what we recommend.

    Licensing is an extra expense. If your MLS requires a license to show houses, then you have no choice. They have to be able to open the lock box!

    Thanks for your comments and questions.
    Jay P.

  • http://www.TheHearingGroup.net TheREOGuy at The Hearing Group

    Thanks for REPEATING that awesome info again Jay! That is a great piece!

    That is exactly where my Top Buyer’s Specialist Steve Massey is at right now-overloaded! Mainly because he delivers 110% customer service to every one. But, at the end of the day, it is still the END of the day! One person can only do so much!
    Towards the end of last year I began building my Team – The hearing Group. I have been blessed to have Steve, Bryan Carpenter – my admin, Kimberly Silverstein – listing specialist, Bob Gagne – buyer and listing specialist, and a high energy, brand new licensee, Caitlin McCusker – buyer specialist.
    I feel that I have reached the point where we are ready for another admin, and a couple more buyer specialist, but, maybe, a couple showing assistants is more the answer.
    Can you expand a little? Do they hire on as an unlicensed, independent contractor that you pay a fee for their weekly service, then the bonus on closed transactions?

    Thanks Jay,
    Sincerely,
    Dennis Hearing
    The Hearing Group
    NE Ft Lauderdale #711

  • Jay Papasan, VP of Publishing and Executive Editor

    Dennis,

    We’re actively researching the best practices. In fact, I got the opportunity to mastermind with a group of top agents in Colorado just last week and we had a great discussion on showing assistants.

    It’s early in the game, but here’s how our research would answer your questions:

    1) Unlicensed is preferable if an unlicensed assistant is able to show homes in your MLS (this is not always the case.) When they earn the right to be your buyer specialist, they can get their license.

    2 Pay them on bonuses based on buyers closed. Just like a Buyer Specialist, they are independent contractors who must help you close buyers before they earn anything. This is still sales even if they are unlicensed. Your value proposition will be the buyer leads you can provide them on a consistent basis–three or four per month is a great living for such a highly focused job.

    3) Train, train, train! Even as an unlicensed showing assistant they will need to know both your systems and the best scripts for showing homes and writing offers.

    Hope this helps,
    Jay P.

  • selectrealtors

    Thanks! Great insight, as always!

    Question on paying unlicensed team members based on closed sales:

    In some states real estate commission can only be paid by the broker to a licensed agent. If the 1099 pay to an independent contractor is based on a percentage of closed sales volume/commission, it is considered commission.

    Have you come across any other pay models out there that are less strictly tied to specific closed transactions?

    Dave Conord
    Ellicott City, MD

  • Jay Papasan, VP of Publishing and Executive Editor

    Dave,

    If paying on a straight percentage of commissions isn’t possible, then you might consider a flat bonus on every buyer transaction closed.

    Take your average commission and work out a flat bonus based on 25 percent of that amount. On lower priced homes you’ll be overpaying and on higher than average priced homes you’ll be saving. Over time, it should even out. The point is this: as much as possible, base your pay on performance.

    As always, clear this program with your broker and your CPA to make sure your program is in compliance with your office standards, board policies and local regulations.

    Warmly,
    Jay P.

  • http://www.KristanCole.com Kristan Cole

    We are about to launch with two showing assistants. We are excited about the leverage it will provide to our buyer specialist who has been working a lot of hours. It will be interesting to see the additional production that we fully expect to be done by using this model. Kristan in Alaska

  • Jay Papasan

    Awesome, Kristan. We look forward to hearing your insights on integrating Showing Assistants into your business. Thanks for sharing.
    Jay P.

  • http://wwww.PDXpertsInc.com Chris Suarez

    Does anyone have the “Job Description” and DISC of the Executive Assistant Position (as opposed to the “marketing and administrative” position off of the MREA profiles)?

  • Jay Papasan

    Chris,

    A few years back, Gary interviewed his EA Valerie Vogler-Stipe at Mega Camp on the difference between an assistant and an executive assistant. They also discussed her hiring another EA “Suzie Smith” and walked through the process.

    Here are the slides for that presentation: http://drop.io/EA_Job_Description

    The DISC for an EA is SIC or the “tent” graph.

    We’ll be adding more info on this when we update the MREA courses next year and in our Recruit Select materials.

    Best,
    Jay P.

  • TKBisht

    It is more important to obey state laws about paying any body except Broker to Broker payments and MLS rules against showing by unlicensed hired help or giving keys to any one.
    If state laws allow go for all the assistants and non assistants to sell homes, show homes and buy homes.

  • Jay Papasan

    TKBisht,
    Absolutely. How they are paid and what they can do must comply with local laws and regulations. Recently, at our KW masterminds, I conducted a straw poll of top agents using showing assistants and 100% reported theirs were licensed due to their board rules.
    Thanks for your comment,
    Jay P

  • Kathy

    Just wondering what the showing assistant is supposed to pay regarding company dollar. Anything? This is assuming a part time position.

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