After watching Claytons new Real Estate Act on Parliament TV last year, and due to come into effect in the next few months, there was, well certainly according to the way he was voicing it, a couple of principal drivers.
The thrust of those were;
1. reduce the amount of unprofessionals entering the industry, whilst increasing current standards.
2. increase the transparency and alongside that, penalties for any wrong doing.
The increased requirements on new entrants will mainly involve a longer training period (up from the current 3 weeks to approx. 12 weeks) and the need for ongoing continuing education.
In effect for new entrants this will stifle some. Under the current situation, an individual with a professional attitude, mixed with all round sales, marketing and negotiation skills, and topped off with professionalism, best practice and ethical standards could hope to earn a commission cheque within the first three months.
Under the new Act, I suspect that this will elongate to 4-5-6 months.
Today’s debt ridden society is different than the situation was when I entered the workforce back in the 70’s. In fact today its almost mandatory for both partners in a relationship to be working full time jobs.
Now for one of those to take a six month income break may just be enough to stop many aspiring potentially very professional & successful Real Estate prospects from entering the industry.
The world is littered with failed accountants, lawyers, CEO’s, corrupt individuals from all walks of life, who after even longer and more rigorous training regimes have still gone off the track.
You could say to yourself there are cowboys in every industry out there. Does the fact that a police recruit go through a rigorous training course over 6-12 months I think it is, ensure that one or two won’t go off the rails in 5-10 years?
So what’s needed.
Well I think NZ agencies might have to look to see how others have tackled this issue.
From their blurb Exit Realty in the USA say….
Whenever a salesperson is introduced to management and recruited into EXiT, bonuses are generated from transactions closed by the new recruit. These bonuses are payable to the individual who sponsored them into the company, which is equivalent to 10% of the gross commissions earned by the recruit; to a maximum of $10,000 annually.
This bonus is paid by EXiT’s head office and it in no way affects the commissions due and payable to the new recruit. This bonus simply continues perpetually for as long as the new recruit stays in the EXiT system and generates sales.
Plus, sponsoring is unlimited across the nation. Where ever EXiT Realty has an office, salespeople can get residual bonuses. Thus, everyone can participate in the growth of the company and receive bonus monies at this very substantial rate.
Should a reduction in the flow of new recruits happen , that will potentially have a compound effect on more experienced & successful agents, in other words making them more “valuable.” In light of that, a Branch Manager will find themselves spending even more time & energy on “retaining talent.”
In Exits case, they most importantly recognize that sponsor person, and via this method of remuneration practically ensure that the sponsor becomes a “mentor” to the introduced recruit. In other words, the talent is retained in-house.
But wait, they don’t stop there, they go a step further…..
At Exit, should you decide to retire from active selling, you will continue to receive residuals at the rate of 7% of the gross, paid out to you by the corporation for as long as those you sponsored into the company continue to make sales. This also translates into a 5% beneficiary program to give added security to the families of Exit associates. Very simply put, good for the sales person, good for their family.
And in their own owrds
This unique EXIT remuneration system produces Real Estate sales people who are more financially secure and more highly trained and this is the ultimate benefit for the customer. And the customer is why we are in the business!
Interesting concept, or just food for thought?