Chicago Realtors: What Ever Happened To Earning Your Commission?

March 4, 2010

Residential

To use or Lock Box or Not to use a Lock Box

To Use a Lock Box or Not to Use a Lock Box

As an active agent I am in the field every day meeting clients, submitting contracts, showing my listings or viewing other agent’s listings. To me real estate is not just a job or a career, it’s a lifestyle. I’m “at work” from the moment I wake up until the time I go to sleep. One of the beauties of my profession is that you can put as much or as little of yourself into it depending on how much you have to give and how much you desire to get out. As with many things in life this flexibility is also one of real estate’s most formidable curses. In this series I will attempt to portray examples of how we as Realtors earn our commission and where we have room for improvement. One of the largest problems I see is that while new agents have to go through a class and a pass a couple tests to obtain a license, these tests are strictly about real estate law. Nowhere in the curriculum is there anything that has to do with how to succeed at real estate and be a positive member of the community of Realtors. The result often times is an agent who thought they would succeed simply by obtaining their license. This may have been true before the bubble burst, but the times they are-a-changing!

Earning Your Commission – Part 1: Lock Boxes are for Lazy Realtors

As we approach the end of the Home Buyer’s Tax Credit, business has been picking up quite a bit. Buyer’s agents are busy showing listings to prospective buyers and listing agents are busy showing their listings… or are they? Speaking from personal experience, I am more and more frequently greeted by a lock box at the door instead of an actual agent. I find this a little concerning for several reasons.

Call me old fashioned, but when I want to sell something you’d better believe that I’m going to be in attendance leading the presentation! As Realtors we have a fiduciary responsibility to our clients to keep their best interests in mind at all times. When selling a listing this means that we owe it to our clients to earn them the highest net price possible for the sale of their home and in the shortest amount of time. In my humble opinion failing to show up to present a unit, especially a single family home or one that is in a building rich with amenities, is a violation of that responsibility.

A Few Exceptions

I know that a lot of people reading this diatribe will be thinking of situations where a lock box is perfectly acceptable. Here are a few I can think of:

1. You’re doing a favor for a friend selling their dilapidated old investment property and the listing is a $20k foreclosure in an area that is 45 minutes one-way from your office. On top of that 90% of the interested parties are cash investors that have such a long list of properties to view that half the time they don’t even show up for the appointment, and the other ten percent are those poor misguides souls that are hoping to buy that property with a loan of some kind. I get it! To me putting a lock box on this property makes sense. There’s nothing to sell about this property, it’s distressed, it has mold, it smells, most likely there are no appliances and some of the copper pipes have been removed. No presentation in the world is going to shed any light on this property. Just make sure that you regularly get out to the property and test the lock box to make sure it’s still there (no joke) and functioning properly. I can’t tell you how frustrating it is to trudge around a snow bank looking for a lock box that isn’t there with a car full of clients watching or trying to open the lockbox with a screw driver even though it’s frozen solid because you hung it underneath the overflowing gutter.

2. You’re going out of town. This makes sense too. Though when I’m going out of town I always find a fill-in, I understand that some agents working very much on their own may not have the luxury of a friend in the business. In this case, it seems understandable.

3. You have two showing appointments at the same time and can’t be in two places at once. This is one area where I feel, as a whole, we can improve. If someone calls me for a time to view my listing, and I’m busy at their requested time the response by the buyer’s agent is usually, “okay thanks anyway.” Typically this is followed by me attempting to figure out an alternative time that I may meet them during their trip. If this is not possible, a lock box makes sense. Many times though we are able to work something out where I can be present. One key to earning your commission is flexibility!

If I’ve left something out, I encourage feedback from those reading… Please leave your comments below.

Typical Showing with a Lock Box

I show up to a multi-unit building. My clients and I locate the lock box (hopefully) and access the unit (hopefully). Now that we’re in the unit looking around my client is interested but has some questions. Having no listing agent around or available by phone we write these questions down and continue looking. We notice some discoloration on the ceiling tile in the bathroom. This could have been the result of a leaky toilet above that was resolved a year ago, but without an agent there to explain this to us, all we see are signs of water damage. Now my clients want to know about amenities. The listing sheet mentions that there is a roof top deck but there was no key in the lock box for this, and no directions on how to locate it. It also mentions storage, again no key, and no directions. Often times these lock boxes are not big enough to fit multiple keys in so the lazy Realtor will just leave them out. As a result, my clients who are very interested in the amenities never get to see the pool, recreation room, movie theater, or whatever else could have been unlocked by the key that was not included. On top of that many times the full list of amenities is not even included on the listing sheet. Because of a lazy listing agent, my client takes a pass on this unit and buys elsewhere.

Combating this challenge

As I encounter (or don’t encounter) lazy Realtors often these days I have found it necessary to become something of a detective while on site – I stop residents and ask them about the building, and if there is a doorman, I’ll ask him as well. Almost every single time I show a home in a multi-unit building I find out something noteworthy that was not on the listing sheet. Surprisingly enough it is usually something important such as a fitness room, a dog run, or even a pool on the roof! Not all buyers have unlimited weekends to shop and therefore may only get one chance to view your listing. It may or may not surprise you but the fact of the matter is by being absent from the showing, the listing agent is hurting themselves, their client and the prospective buyers. Too often, when acting as a buyer’s agent, I am left to do my job and that of the listing agent (yet only collect half of the compensation!). One of the ironies is that after a showing I will be put on an auto-email feedback campaign that repeatedly asks for feedback once a day until I respond.

How it should go

When someone shows up to one of my listings, I give the buyer a full brochure detailing the unit?s benefits. This brochure also contains a list of the building amenities as well as a site guide (a map and list of common interests such as neighborhood hot spots, restaurants etc) for the surrounding area. I then show them the unit, pointing out every part of it that may not be caught on first glance; the level of fixtures, the quality of the construction, the exposures of the windows and how that will affect the light in the unit, etc. If they are still interested after seeing the unit, I will then take them to see the building amenities all the while attempting to learn more about the buyer’s needs and make an effort to relate how those needs may be met by my listing (let’s see a lock box do that). Along the way I answer any questions the buyer has on the spot instead of leaving them to wonder or hopefully remember to ask later. There is no question that giving a full presentation increases the chance of obtaining an offer.

Even if these buyers are not interested in my listing, I did my best to present it to them. I also was able to get feedback based on their reactions to my listing to report back to my seller.

Working Smarter not Harder

I am all for working smarter not harder. I just don’t feel that lock boxes qualify for this designation. I am sure that many of you reading have an experience or twenty where a lock box prevented you from doing your job. I have too many to recall without sounding like I’m on a rant… suffice it to say, if you are a Realtor who regularly uses a lock box even though you know in your heart that you could and should be there to present your product it may be time to re-think your strategy. Without having statistics to back me up, I would like to speculate that units that are shown by the listing agent have lower market times and higher sale price verses market value than compared to units that were sold using a lock box. I challenge anyone who disagrees to please speak up!

Please bookmark TheChicago77.com and return for more of my series “Whatever Happened to Earning Your Commission?” I would like to thank all of the excellent Realtors out there including the people who taught me the right way to do things. I would also like to thank those lazy Realtors out there for giving me something to write about.

We would like to thank Iowa_Spirit_Walker for kindly sharing today?s photo via the Creative Commons License.
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About Randy Whiting

Randy Whiting is a respected Chicago real estate agent at Lucid Realty a full-service brokerage that offers discounted commissions to sellers and rebates to buyers. With plenty of experience on both sides of the transaction and all type of sales be they conventional, FHA, short sale, or foreclosure; Randy has an experience-driven comfort level that usually rubs off on his clients. In addition, his experience working with developers allows him to provide an in-depth understanding of new development and gut-rehab properties as well as re-sales. Outside of his work as a realtor, Randy spends his time writing and performing music and enjoying the outdoors as often as possible. You can contact him at RWhiting@LucidRealty.com

View all posts by Randy Whiting

12 Responses to “Chicago Realtors: What Ever Happened To Earning Your Commission?”

  1. Paul Vranas Says:

    “There is no question that giving a full presentation increases the chance of obtaining an offer.

    Without having statistics to back me up, I would like to speculate that units that are shown by the listing agent have lower market times and higher sale price verses market value than compared to units that were sold using a lock box.”

    Randy,

    Don’t you think it would be a good idea to find some evidence/statistics to backup your claims before hurling an insult at peers in your industry?

    Sincerely,
    Paul

    Reply

  2. Randy Whiting Says:

    Paul, thank you very much for speaking up! In response, I must remind you that this is an OPINION column. The beauty is, everyone is entitled to one! I never made any claim that what I was saying is fact. Without any statistics to prove me wrong, I guess we’re all left to speculate. In my own business there have been MANY times that because of a lock box (or missing lock box, or broken lock box, etc) my clients have taken a pass on a unit (few will buy a home that they cannot see the inside of). Assuming that I’m not the only agent who’s experienced this, are you telling me that you can’t see some truth to my opinion?

    (Paul, sorry about the repeat response, I saw your email before I read the comment here.)

    Reply

  3. Randy Whiting Says:

    Paul – One more thing I thought of after contemplating your response… rather than labeling agents as “lazy” and focusing on them, I think that article could have been better written focusing on those that rarely use lock boxes and how I feel that it is a testament to their dedication to the best outcome for their clients. I shall keep this in mind when writing future parts to this series. Thanks again for your response.

    Reply

  4. Paul Vranas Says:

    Randy,

    Listing agents showing their property on a first showing is a practice taken from before the creation of buyers agency. While the majority of the rest of the country did away with this practice as buyer’s got their own representation, a portion of Chicago agents continue to demand that they accompany showings on their own listings.

    As a buyers agent, for every 1 lockbox malfunction preventing a showing, I would estimate that I have encountered 3 showing requests denied by the listing agent due to their scheduling conflicts. Both are problematic.

    I don’t think there is much of a question over the value of utilizing lockboxes.. They are used almost exclusively in the suburbs and the rest of the country and homes manage to be sold there. I think the real issue at hand is the professionalism of the listing agent ensuring that buyers have access to the property (whether through proper maintenance of their lockbox or confirming buyer agent’s showing requests).

    Reply

  5. Chicago Agent Says:

    All true. However, you forgot to mention when that after pulling the wet, filthy, disgusting keys from the lockbox, you can?t figure out which key it is, or which door to go through or which door the unit is on. Yesterday, I showed a unit on lockbox; list agent didn?t provide any instructions. Listing said the unit was on the 2nd floor. I was trying the key in the 2nd floor unit, only to have the owner come out and yell at me that she?s sick of people trying to open her door and that I have the wrong place and the unit is on the 3rd floor. I also find more listing errors like this in units on lockbox. I agree that it’s not a hard and fast rule, but these agents are often cavalier and careless with their listings overall.

    As to statistics, it would be great to know the difference in market time but really hard to measure since most listings aren’t listed as being on lockbox…

    Reply

  6. Randy Whiting Says:

    Paul – I agree completely with the need for lock box maintenance and I’m surprised to hear, though I don’t doubt, your estimates regarding the number of agents that have turned you down compared to the number of lock box malfunctions. In my experience I am rarely turned down for showings, as long as both agents try to be flexible we usually work it out. I also never said that lock boxes prevent sales or that there weren’t uses for them, just that they are greatly over used. Sounds like we are at a point where we can agree to disagree. I’d like to thank everyone who contacted me off line with your lock box horror stories. Though I’m not glad you have all experienced similar results to me, it helps to know there are others out there who agree that there is room for improvement.

    Reply

  7. Katie Anderson Says:

    I would have to agree with Randy on this one. Too many times I have taken clients out to see a property and it is on lock box. There are many questions to ask during a showing. I like to know as well as my client like to know: How old is the roof? How many layers on the roof? How old are the mechanicals? Has the seller had any issues with water? How old are the windows? When was the last time the building has been re-sealed? In condos, the questions are even more: How much money is in reserves? Are there any special assessments? The list can go on and on. I believe when you have a listing agent (that moves heaven and earth) confirm showings and is at the property to represent that property, it will most definitely sell faster than one on a lock box.

    Reply

  8. james Says:

    how about this…
    there was a particular property that I was interested in, so I called a realtor and set up a time to view the property. After the viewing I told the realtor that I would go home and discuss with my wife wether ornot we wanted to make an offer. I specifically told her that I would call her that same day if we wanted to make an offer or if we other questions or concerns..

    we viewed the property at 2pm .. we got back home by 2:15.. had a talk about it, and decided we wanted to make an offer (CASH OFFER). I the proceeded to call my realtor who of course didn’t pick up her cell phone. I left a message explaining that we wanted to make a cash offer on the property..

    3pm comes and goes.. no call back
    4pm .. no call back
    4:30 I call her back (doesn’t pick up her phone again )and leave ANOTHER message asking her to please call me back about our offer.
    5 pm still no call back
    6pm.. that’s right you guessed it.. no phone call.

    by 7pm I had all but given up on receiving a simple call back…
    Apparently A LOT Realtors are extremely lazy.. and I’m a cash buyer..

    oh well.. I called a different realtor.. we shall see how this one goes.. ughhh

    Reply

  9. Randy Whiting Says:

    I feel you James! There are quite a few agents that leave much to be desired in many areas. I’m sure we all have horror stories. Best of luck with your new agent. Should you find that they are not up to par either, I would be happy to chat with you about achieving your goals. Either way, stick with it, and enjoy your new home.

    Ciao for now,
    Randy

    Reply

  10. Liz Says:

    I agree, lock boxes ARE for lazy realtors!!!

    We had a lock box on the last home we sold because our realtor, well, that is his way of “doing business”. Anyhow we had a showing which or course he had the lockbox on our door, so there was “no reason” for him to be present at the showing. I left my home a half hour before the showing & locked my home up. I returned to my home an hour and a half later, my kitchen door was WIDE open which means my home was UNLOCKED. This was extremely unsettling as our home was burglarized a few years before. Call my agent immediately and he said he would call the showing agent’s boss. Great, what was s/he going to do, punish his employee, the showing agent?

    When my listing agent and his office command a 5.5% commission, I also have to pay that rate (or close) to the buyers agent and their office, that is $33,000.00 on a $300K home!!! For what? To take a few pics of my home, slap it on the internet, enter into the MLS, maybe make a few postcards to current clients (no open houses for realtors or public because they are a waste of time attracting only “lookers”.), then slashing the price of my home every 2 weeks to “get it sold”? Where is this a value in losing $33K? How is that work? I can do the SAME thing! My agent said that using him, we as sellers do not have to “deal” with the buyers. It seems neither does he because the lock box is on my door. I really do not see the value of paying someone $33K to do a few hours of computer work, make a few phone calls and then rake in $16,500.00 for my agent and his office alone! I just do not see the value. The agents are working smarter to benefit them…..they ARE lazier! This just seems SO wrong! They work this way, they can take more clients on. Do not get me wrong people need to make a dollar, but how about honest pay for an honest days work? Some agents tout they “look over the paperwork, etc, etc”, well isn’t that what I pay an attorney for, which the realtor of course ends up recommending as well? (do they get a referral fee or cut from that too? Or the moving company, painters, etc, etc the recommend? I still want to know how is paying someone almost $30K a value? If I end up listing my home for $300K, selling it for $260K and then after the agents and their offices have raided MY hard earned money for IMO very little work, I am left with $230,100. I just went almost $70K backwards, and they MADE $29,900.00!!!! Not sure about anyone here, but it takes a considerable amount of time for me that kind of money!

    And I see agents driving around in really nice, upscale imports, talking about traveling, vacations, new hardwood floors in their homes, etc. Hmmm?

    Reply

  11. Randy Whiting Says:

    Liz – I’m sorry to hear about your experience. My only question is why did you agree to pay a Realtor. I’m also SHOCKED that you agreed to pay 11% in total commission, that is over double what is average here in my market. In the end I hope all worked out for you. If you need any questions answered, I’d be happy to help.

    Sincerely,
    Randy

    Reply

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  1. The Secret to Getting Your Home Sold | The Chicago 77 - March 9, 2010

    [...] quickly contact your agent to get you into see this home. If your schedule does not accommodate an immediate showing, you may ask your agent to schedule a showing for the following week, or you attend the open house. [...]

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