In speaking with my friend Bill Archambault several weeks ago, he pointed out to me his simple yet effective rules of real estate. I just love this guy. He has sage wisdom that comes from significant life experience.
Here are Bill’s Rules of Real Estate:
I. Thou shall protect thy license above all.
II. Thou shall protect thy client above all, but thy license.
III. Thou shall protect thy referral source above all, but thy client and thy license.
IV. Thou shall protect thy commission above all, but thy referral source, thy client, and thy license.
While these rules are certainly not equal to the Ten Commandments that Moses received from God, they do provide some good guiding principles for real estate professionals.
As real estate professionals, we are often put into situations where we are made to feel uncomfortable. We could be asked to do something that we are not certain is within our ethical framework, or we could be asked to do something that is not even legal. Clearly, you should never do anything that is illegal. But, you should also never do anything outside of your comfort zone, and never anything that could put your license in jeopardy. Without your license, it’ll be curtains for you.
According to a 2012 report from the Bureau of Labor Statistics, there are 422,000 full time sales agents and brokers. Yet, in the very same year, the National Association of Realtors® reported their membership at nearly one million members. It would stand to reason that there are thousands of real estate professionals who are not making a living selling homes. Those same folks may be challenged financially. And when you’re challenged financially, sometimes you take risks that you shouldn’t take. But, by all means, it’s a good idea to follow Bill’s rules and protect your license above all.
Along those same lines, Bill advocates never throwing your client, your referral source, or your commission out with the baby and the bath water.
One thing that always strikes me as I am cutting agent commission checks is how readily agents give away their commission at the eleventh hour. It’s one thing to have a policy of always buying your clients a gift or providing them with a one year home warranty, but it is entirely another to provide them with a closing cost credit from your commission check.
When you gift your commission, you set a precedent. Consumers will begin to expect these handouts across the board, and a lower commission undervalues the work we do—the work I do—as an industry professional. Commission is generally high because we pay for everything up front. Not only that but we are taxed at a higher rate as independent contractors. Given those facts and the fact that most real estate professionals share a piece of their commission with a broker, the errors and omissions insurance company, and possibly other industry professionals, you’ve got to protect what you have left if you expect to earn a decent living in real estate.
Those four simple rules—Bill’s rules of real estate—are an amazing set of stone tablets. If you keep those in mind, you will see much success. And if you follow those other commandments (the ones that have been around since the beginning of time) you probably won’t do so bad either.
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