Real Estate 101: Show Me The Money
Last week, I managed to introduce you to Real Estate 101. I included a ton of facts, definitions and important information overall, however, not the good stuff. While ‘the good stuff’ is all relative, I think my good friend Cuba Gooding, Jr. said it best in Jerry McGuire, “SHOW ME THE MONEY!” Yea, now that’s the stuff. Let’s talk about getting paid *queue Just Got Paid – N’Sync version*
If you’re like me, you make mistakes. Sometimes you forget a sock in the dryer, forget to pick up the cucumbers for your newest juice or, dang nabbit, I didn’t call that guy back. One thing you don’t mess up or mess with is my money. I paid close attention to how we get paid, when we get paid and how to keep it coming … let me explain.
I won’t throw a bunch of math equations out there, asking you to calculate your rate if you sold a house at 80k with a 7% commission ($5,600). Nor will I ask you to tell me your rate of commission if you made $4,800 on a property that sold for $75k (15.62% — not happening ). I do, however, want you to know basic math. Calculators are allowed and if you pace yourself right and your numbers tie out, you won’t get cheated out of a dime. If you want to make money, you have to be able to handle it. In oder to handle it, you need to ensure you can count it. If you can count it, make sure it makes cents ( pun intended ). Easy Breezy.
Now that we know we will be making a certain percentage of money, we need to know when this money is coming to us. The salesperson is pretty much at the bottom of the totem pole. The lawyers get paid, the seller gets paid, the individuals that performed the inspections get paid, the broker gets paid, the old neighbors get paid, the mailman who now has new people to delivery mail to, gets paid, THEN, you my friend, get paid. A bit of an exaggeration, but you get my drift. All that matters, is that you get paid. Your percentage is worked out with the broker and the broker works that percentage out with party they’ve aligned themselves with, either the seller or the buyer. If you had no job, be happy you have some money coming in. If this is your only job, start your next sale waiting for this check to hit your account.
So, we know we’re getting money, we know when it’s coming to us, how do we keep it coming in? You network. If you sold an apartment in a building and established a great relationship with the owner, the owner may give your brokerage firm exclusive rights to the building. If your broker gets exclusive rights to the building, you just may get the rights from the company owner to be the sole salesperson within that development. Let’s repeat. The building owner likes you, therefore, they give your company exclusive rights to their 8 units. Your broker says you are the only one to sell the 8 units in that building, going for $75k. You have, roughly, $40,000 waiting to be made. Nod once if you’re ok with that?
Just to clarify, you can’t speak to other broker companies and have them market to certain areas while you market to others, that’s illegal. However, owners can choose whoever they want to work with, so bring a slow smile and a firm handshake, and that could be you. Your network is your networth.
This weeks’ lesson is relatively simple and straightforward so let’s go out there and get money honey!
Until next time,
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