In the Phoenix real estate market, specifically the Phoenix rental market, here is how real estate agents get paid. At least in theory…
An agent shows a prospective tenant a home. Said tenant decides, “this is it. THIS is THE home. I want to rent it and live out my life here.”
So the agent submits a rental application to the listing agent, who then processes the application based on whatever criteria the future landlord has deemed appropriate. Credit checks, criminal background check, employment verification, blah blah blah. At some point, said tenant will either be rejected or approved to lease the property.
If approved, said tenant then signs a lease and moves in to begin or carry on with their life.
This is the point in time where, at least in theory, the listing agent’s broker issues the agreed upon payment to the broker for the agent that produced the tenant.
And here is where, in what seems to be in a remarkable and ever-increasing frequency, things spin out of control.
Keep in mind that most commissions due to a leasing agent’s brokerage are measured in a few hundred dollar bills. We aren’t taking thousands of dollars here. Maybe three, four or occasionally five hundred bucks. Sometimes less, on rare occasion slightly more.
So it’s not like the listing broker has to jet off to Fort Knox and find their keys to the stash of gold bars to make a payment. It’s a simple as writing a check.
At least in theory.
I’m perplexed, flummoxed even at the rate that I have to call real estate brokerages and say, “Excuse me. When can we expect the payment for finding a tenant for your client’s home?”
Typically what happens when I make these calls/send emails falls into three categories:
1) I get no response. This happens roughly 96.37% of the time.
2) The broker answers the phone or email and states, “The check is in the mail.” Statistically the odds of getting this response increases with the fourth attempt at contact.
3) The broker eventually responds with an asinine statement along the lines of, “We process payments monthly,” or some other such nonsense.
Lately it seems no matter the response (assuming that a response is even generated) the damn check never shows up without making two, three or fourteen additional inquiries.
It’s madness, madness I tell you!
It’s not the money for the brokerage I’m concerned with. After all, we pay our agents handling rentals on what is called a “90/10 split”. They get 90% of the payment, 10% is retained by the brokerage. Recall the typical payment on a rental is $300. Ten percent of that, well, you see why it’s not the money to the brokerage that concerns me.
Even the agents aren’t getting a ton of money. But they did earn that money, and they deserve to be paid in a timely fashion.
How freaking hard is it to write a check and drop it in the mail?
How freaking hard is it to tell the truth? If you say, “the check is in the mail,” and subsequently it never shows up, then you never put the check in the mail. Spare me the “it must have been lost in the mail” routine. I used that story when I was 23 years old and was floating bill payments from paycheck to paycheck. You’re a real estate broker for Pete’s sake. If you can’t make a $300 payment – FROM MONEY YOU ALREADY COLLECTED FROM THE TENANT – then you need to consider another profession.
Please, for the love of fluffy bunnies, just write the check. Help an agent out. Help me lower my blood pressure.
Just. Do. The. Right. Thing.
Cool graph generated from Brian Shaler’s brilliant Crappy Graphs.