Real Estate Agency Best Practice – Protect Your Commission Before You Give Out Details

If you haven’t figured it out yet, the commercial real estate market is like all others when it comes to the competition in your area and people taking your business away from you. Be mindful that contact details given to the wrong person and without some written protection of your commission will likely mean that you loose the deal or loose the client or both.

Trust no one when it comes to your commission. Get all verbal facts and agreements in writing before you release your prospect information; and it’s not just the other agents that you need to worry about.

Experience proves that even clients will take verbal information and use it to their advantage if they can to close the deal directly and avoid commission. This means that you must have a paper trail that supports your claim on commission and the introduction of the prospect. You appointment to act for the client or that of the other agent should be valid and in writing. There is only one way to do things and that is the right way.

If you are approaching another agent to do a conjunction deal on one of their listings, do not presume that they have a valid appointment to act. Ask for some proof or commitment from them before you offer to work with them in conjunction.

Can you trust a verbal agreement from the client or another agent that your introduction of a prospect will be honoured when it comes to commission? No, is the simple answer.

Always back up any verbal agreement by supporting it in writing before you release details of the deal or the prospect to others. Money speaks many languages and influences many decisions. If commission can be saved because the deal with you as the real estate agent is not in writing or evidenced in some way, then expect that such will be the case.

An agreement is not a solid agreement until you have firmly tied it down with written instructions. Many people conveniently forget what was said when it comes to contracts or leases involving lots of money. In commercial real estate that is just about every deal. Expect disagreements and problems, so protect yourself and your commission at all times.

Take your own notes from any verbal instructions or agreements but then take it to the next level and put it in writing. It is quite common to have legal battles when it comes to commercial property, clients, and real estate agents. Critical statements and information must be checked and evidenced back to the source.

In any conjunction with another agent there is a temptation to act on a verbal agreement that the other agent will work with you if you introduce a qualified prospect to their listing. If you know the other agent, the temptation is to do the deal and do the paperwork later. So many commissions have been lost simply with this one situation.

Many clients have said that they will pay you commission if you bring them a purchaser for the property at the right price. Heard that before haven’t you?

So the way you can protect your commissions with other agents is to create a well-crafted letter of conjunction or agreement that can be sent to the other agent at a moment’s notice. It should contain key descriptive details on:

  • Name of the agents involved
  • Details of the owner or of the property
  • Details of the commission
  • Details of how the commission will be paid and by when
  • Date of agreement
  • Signatures of all key parties

Acting on unchecked or incorrect property information will also open the door to debate and legal claim. If you are in the property game long enough, you will be involved with such disputes, and the only way you can protect yourself is by diligence to detail and the evidence of everything. Stay legal and stay safe. You will create better deals.