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My first 9 months as an ACRE
05-17-2012, 06:48 PM (This post was last modified: 05-18-2012 06:27 AM by Lester Langdon.)
Post: #1
My first 9 months as an ACRE
Thoughts on my first nine months as an independent real estate consultant.

After 18 years, I left Coldwell Banker in August 2011 to become a consultant
Have doubled my commissions over last year, which was admittedly poor in 2011

I am offering a menu of compensation plans to my clients
Over my first independent 9 months, the two most accepted compensation plans have been

1. Traditional contingency based on a successful transaction and I get paid the full traditional commission.
2. An offer to transfer risk to the client in exchange for a rebate to buyers and discount to sellers (with a minimum fee)

I will work with a buyer using a traditional contingency buyer representation agreement,
however I do not get in my car unless the buyer has driven past the property
and I have done a preliminary desktop analysis to determine if the property is fairly priced.


• For buyers I am offering
$200 rebate if buyer pays $100 non-refundable startup fee
$1,500 rebate if buyer pays $500
$4,000 rebate if buyer pays $1,000

Today a buyer client said he wants $1MM of multifamily apt investment properties.
He paid me $2,000 up front to get $8,000 rebate at closing and is not credited the $2,000 at closing.
When we purchase a property I will get approx $25,000 less $8,000 = $17,000 plus the original $2,000 = $19,000

• For Sellers (in addition to traditional contingency) (assuming a $400,000 sales price)
Reduce the commission from 6% down to 5 ½ % (a $2,000 commission reduction) if the seller pays me a start up fee of $500
The commission is 5% (commission savings of $4,000) if the seller pays a $1,000 start up fee.

I list the property for sale with a 2 ½ % commission to buyer broker,
thus I also get 2 ½ % = $10,000 plus the original $1,000 = $11,000 total
The buyer broker is sharing in the transfer of risk from listing broker to seller.
Buyer agents have not objected.
The seller saved $4,000 in selling cost.


The purpose is to lock in the client. This seller will Not likely go to another broker if the listing expires.

Some Clients do not want hourly, weekly nor monthly retainer due to the risk of paying a fee without having a transaction.
It is for three reasons,
1. They do not know, like and trust me, yet
2. Seller is not sure of a successful transaction.
3. They do not have the cash

Buyers are not sure we can find a satisfactory investment property.
Buyers do not have to buy a real estate investment.

Possibly I am biased against the hourly fee option because
Texas is a minimum service state and requires a higher standard of fiduciary responsibilities.
I am not confident that clients can property represent themselves in a transaction.
After 18 years experience I can reveal that which is NOT obvious.
(A client that represents himself has a fool for a client)

It can be argued that I am losing potential commission.
I can not lose something that I do not have.
I will work with a buyer traditional contingency buyer representation agreement,
however I do not get in my car unless the buyer has driven past the property and
I have done a preliminary desktop analysis to determine if the property is fairly priced.

Specializing in multifamily investment properties and fortunately can claim having a very successful record because I have a google map with my 77 multifamily transactions.
You should also have such a map from BatchGeo.com
77 Multifamily apartment properties sold by Lester Langdon - click here

If you do not have enough transactions, then make a make with transactions of your entire office.
Additionally, I have approximately 20 published Youtube videos
with my comments about my market and how to select a broker.

Sleeping with the Enemy – 3 minute video

I am offering to you, my commission money. Let us discuss.
Buyer Help

Short 2 minute video Three Flavors of income properties in Texas

Rants and Whines

Hope this helps you.
Lester Langdon - Chief Evangelist Officer
Realty Consultants
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05-18-2012, 07:23 AM
Post: #2
RE: My first 9 months as an ACRE
Wow - there is a lot of great information in this post. I'd never thought of the sliding scale of "downpayment" versus rebate - I like it!
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05-22-2012, 08:03 AM
Post: #3
RE: My first 9 months as an ACRE
Thanks Lester, that is great information. I have played around with different formulas for retainers versus rebates/commission reductions and am in the process of redoing my fee structure and service options, so this is helpful. With the market picking up in my area, I am getting a lot more feedback from buyers and sellers as to what sort of fees they will accept and how I can structure deals to everyone's advantage.
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