“Why would anyone open a new real estate brokerage in this market?”
That’s a question I’ve heard several times since opening Thompson’s Realty.
There are a plethora of reasons”¦. (that was just for you Kris)
Not paying a commission split to my former broker, not paying Century 21 a “franchise fee”, not worrying about my broker telling me what I can and can’t post on this blog. All are valid reasons for opening a brokerage in any market.
But the primary reason we struck out on our own was so we can run our business the way we want to, not subject to the whims and demands of others. So if you’re planning to become a broker and one day start your own brokerage firm, you can start with a real estate broker pre license online training.
And today we were able to implement one aspect of control in our business that was never possible before.
It probably doesn’t sound like much, but I can’t begin to explain how thrilled I was to write this statement into a listing agreement that was signed today:
Seller has the right to cancel this listing agreement with 24 hours notice.
That’s correct. The right to cancel. It will be in all our listing agreements.
I don’t believe in holding a client hostage. If we aren’t performing to their expectations, then (to quote the great Russell Shaw), “Fire me”.
Please fire me.
Personally I don’t believe this clause will ever need to be “exercised ” for poor performance on our part. But it’s there, and we will of course honor it. Poor performance isn’t the only reason a client might need to cancel. It’s certainly possible that a client’s situation could change, and it’s ludicrous to hold them to a listing agreement if they are no longer in a viable position to sell their home. (And yet there are countless brokers out there that will do just that.)
Today’s listing agreement was with a great couple in Las Vegas that have had some bad prior experiences with real estate agents (I know.. shocking).
This little clause gives them comfort and control.
What could possibly be wrong with offering that?
(Update: Unbeknown to me (because I’m days behind on my feed reader), Trevor Smith, Redfin Agent, posted about Redfin’s “Firing Clause” just a couple of days ago. A good read as Trevor responds to some things that are typically brought up in these discussions.)
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[tags]real estate brokerage, cancelling listing agreements, freedom![/tags]
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Jay, Congratulations again on your emancipation! A Top Producer, Your Agent for Life, Phoenix's First Choice in Real Estate, should do very well regardless of the market.
We have been including the "Right to Fire" clause in all of our listing contracts for about two years now. Our Broker has never balked, fortunately. Who in their right mind would ever want to make someone be a party to a contract they want no part of? It's just not good business to keep a client through coercion. Good for you!
Of course you will never hear the words "you're fired!" because you don't give reason. 😉
Kris – it's beyond me why anyone would find it wise to keep a client against their will. But that's just one of the things over which I slammed my head into a wall with my former broker.
Some may think it's strange that I'm feeling so good, so free (emancipated if you will) about being able to put one little sentence into a listing agreement. But boy howdy, it feels great!
Curiously, I don't think we would have been able to get this listing without it. And I know we've lost others due to this, and stupid minimum length requirements as well.
I've done the same thing for years… and it feels good. I've even been fired a few times, no regrets.
This business is about serving the client, not the other way around and I will never work any other way.
Best of luck.
Hi Jay,
Might I ask if this clause is unconditional? How do you handle out-of-pocket advertising and marketing expenses when it comes to Mr. and Mrs. Jekyll and Hyde?
Good luck. Being your own boss is a great reason. Of course that has its own huge host of challenges but at least you get to decided how to tackle them.
If I lived in your part of the Earth, I wouldn't want to work for anybody else. Best to you, Jay. You are the example of awesome.
Jay — You're gonna be a huge success 'cuz you get it.
Not to mention your natural talent with people — they flat out love you.
For the record, I've been allowing the mutual firing clause since opening the doors in '77.
What you might learn over time, is what I did. In over 30 years I've fired clients almost 3 to 1 to those who've fired me.
There's only been one time I wasn't elated. 🙂
Hi Jay,
We've been doing it that way for years – until recently I didn't even realize there were brokers out there who wouldn't allow a seller to cancel their agreement! I still don't understand it – a client is unhappy and feels he/she isn't being well served, and the broker says "too bad – we have a contract…" Yeah, that's a great way to build a long term business!
ps – I never did get a chance to say congratulations on your new venture. I'll echo everyone else's sentiments by saying you're gonna do great!
I put in a clause like that but it's not so cut and dry. If I am failing on my written promises then they have the right to an unconditional termination. If they change their minds or wish to cancel "just because" then you better believe I am getting recompensated for my outlay plus a bit for my time… and it will be a conditional cancellation (60 days no ability to list with another agent).
I'm all for giving the mutual break up clause… but not with the chance that I can be used and tossed away indiscriminately.
Carl wrote: "Might I ask if this clause is unconditional? How do you handle out-of-pocket advertising and marketing expenses when it comes to Mr. and Mrs. Jekyll and Hyde?"
Yep, unconditional. Lost out-of-pocket expenses are a cost of doing business. Every agent knows there are unrealistic buyers/sellers out there. Our job is to pre-screen and educate them before taking them on as clients (or shortly after). I'm sure some will slip through. We made a conscious decision to not have a bunch of what-if's included.
@Todd, @John, @April, @Chris – thanks. Chris, we still need to do that coffee… sorry, it's been crazy! Call me, again..
@Jeff – Thanks. The "firing clause" is indeed mutual and I should probably write that in. May at some point. Maybe not. I bet your 3:1 ratio would probably fit almost everywhere.
@Will – I don't plan on being used and tossed away. I'm confident people are going to be so pleased with our service that they'll be falling all over each other to work with us. Foolish dream? I'm sure some will think so. I think not.
Jay,
I agree 1,000%. I am working with a great, fun couple right now becuase they loved the fact that I didn't shove a pen in their hand the minute they walked in the door of my open house. They were frustrated with agents trying to get the to sign buyers agreements with only 3 minutes of conversation…
Wow! That is one great business move Jay. I am left speechless. Congratulations and I wish you all the best.
Yeah the firing clause is good. I've had a buyers that I had to wait on two months to reach the end of the buyer agreement to dump once. I would have fired them early if I could. Just wasted time.
Why wouldn't you with the greatest task at hand moving a huge inventory of homes why not open a brokerage firm. With future ARM's due to set upcoming there will be more inventory coming onto the market it is going to be one busy ride.
Become a specialist at short sales and foreclosures in your area and keep aprised of all sales and comps in the area. Maybe this is the time to think outside the box and get creative and put some articles in the paper and maybe adds on radio, talk to clubs in area and get busy on the internet and dig in you can rest come 2010 when we should return to low inventory and a quieter time.
I've had a fire me clause for years… It makes me look at my sellers as if I am hiring them. I don't want to spend a bunch of money (and I spend a bunch of money) and then have the seller decide to not sell, or whatever…
I wrote about it most recently on Feb 11th.
I am always surprised when I run across agents that lock clients into the listing period.
Congrats on the new brokerage! It is nice to call the shots, eh?
I also use the "fire me" clause in my listings. It makes it hard for them not to sign the agreement on the spot. Best of luck with the new business!
Congrats on the brokerage.
I've got the fire me clause in my listing contracts too. I call it the 'peace of mind clause'. One less thing for the potential clients to worry about. No one has ever excercised it yet, so far so good. 🙂
Louise and I have been using the "Easy Exit" clause for a couple of years now and it does help ease the fears of some sellers.
Jay – congratulations on opening your own brokerage! I moved in December to KW for many of the same reasons (financial and branding freedom). I've been doing the "easy exit" listing clause for years and my previous managers never minded. About every 2-3 years, someone will sign a listing and then cancel either before we go officially on the market or after a very brief period (the latter is more frustrating, of course, but it almost never happens).
The cancellation clause tells clients that you stand by your work and put their best interests first. Only one time did I feel that someone took advantage of me with it (I marketed the home extensively at "his price" with the understanding that if it didn't receive an offer in 3-4 weeks we'd reduce it – instead he cancelled it, relisted with a relative at the "right price").
Wishing you every success!
Congrats ! Building your business with your own vision is empowering and can have it's ups and downs always a good move. Here's to being the best in your area!
Mary Pope-Handy and Jay: That is exactly why I have the outlays pus some for time spent recoupable. Now it's only happened to me once where I had to go get the money from a mind changer but once is enough to encourage me to continue the practice. I mean, the sellers are sincere in their desire to sell with me, right? And they like what I am going to do, right? So there's no problem. Change your mind in a day and there will be little to no cost. Change your mind in a month and there will be some significant costs.
I think of it along the lines that if I took my taxes to be prepared by an accountant and halfway through decide to do it on my own or go to an HR Block you better belive that my old accountant would be charging me for servces rendered. Same with a lawyer. Switch mid-case they will still be charging you.
Nothing says you are more professional than promising in writing that you will be doing the best of efforts (and all those little details that entails) for them all the while protecting your assets. We use that argument against commission cutting, don't we? If some agent will cut their own money how will they treat the sellers bottom line? Well, same here. If an agent is willing to spend all sorts of their own money as part of their service what are they doing to protect their investment and if it's nothing how will they be protecting the Seller's investment in their home?
I'm all for an exit clause… just don't let the door hit you on the way out. That's how I see it. Yes, the rest of your sellers who do work with you will still be raving. The ones who try to take advantage will also be raving about how they had an agent do all sorts of work, pay all sorts of money, and then got kicked to the curb. You don't need them (but you do need your investment back).
There is no doubt your brokerage will be a succes. No matter how bad the market is currently – someone who provides exceptional service etc will service will survive.
I am sure it is nice to be able to not have to answer to anyone except the wife!
There is no doubt your brokerage will be a success. No matter how bad the market is currently – someone who provides exceptional service etc will service will survive.
I am sure it is nice to be able to not have to answer to anyone except the wife!
No problem putting that in if you arent going to spend any real time and money marketing the property. We put in a clause that they can terminate the contract but must reimburse us $2500 for marketing expenses.
No problem putting that in if you arent going to spend any real time and money marketing the property. We put in a clause that they can terminate the contract but must reimburse us $2500 for marketing expenses. http://www.cortiersrealestate.com