Teresa Boardman is a long-time columnist with 400-plus Inman columns under her belt. She writes about her real estate observations and experiences as an officeless indie broker in Minnesota.
Last night, I had a nightmare. I had done something wrong at the real estate company I was working at and was asked to leave the company. The management helped me pack up my stuff and walked me out the door.
On the way out, I asked what would happen to the commission checks from my upcoming closings and my listings.
I woke up feeling stressed out and answered my own question. Technically, listings belong to the broker. They would probably have to pay the commissions, but it may be at a different split, and it could take some time.
That happened to me when I left one company. They took half of the check. It had something to do with a team agreement. I don’t remember the details. I just remember being surprised.
Looking back on my checkered career, I was somewhat traumatized by the way checks were handled and the dream made me feel the same way I felt when my pay was withheld. My dream might have been the manifestation of a little post-traumatic stress.
I would work hard for months to win a client. Then, I would work some more to sell a house, and then get through the inspection period and the underwriting process, all the way to the closing. The check would go to my broker who in turn would pay me, but only if another set of conditions were met.
The struggle to get paid
The broker gets a cut of every check and expenses are taken out. Most of the time I owed money to the company store. We paid for everything, and most of it was purchased from or through the company. I knew agents who did owe their soul to the company store and had to work hard to get it all paid off.
Getting paid wasn’t as simple as having a successful closing. One time when I was representing a buyer on the purchase of her first home, everything went smoothly until someone in the real estate office discovered that the seller’s initials were missing from a section of the seller’s disclosure that required initials.
As a result, they would not give me a check until I got the initials.
As luck would have it, the seller had left the country, and this was back in the day before I had an electronic signature system. I don’t remember what I said or did to get that check, but I got it without those initials. The seller’s agent wasn’t very helpful, and apparently his broker didn’t even notice the missing initials.
Another time, I went to the office to pick up a commission check, and it wasn’t there. The office I was with had a system. We brought in a check from a closing on day X, our commission check would be ready on day Y. As I recall, it was a two- or three-day turnaround time.
When I inquired about the check, I was told that the people who could sign it were all at a conference out of town and that I would have to wait until they got back.
At another company, they would call me when the check was ready, and I would pick it up. I remember waiting and waiting for the call and wondering where my check was. It wasn’t our listing, and the listing agent had received a check to bring back to his office. My broker should have gotten a check in the mail a few days later, and my pay would come from that check.
My broker felt it was my responsibility to track down the check from the closing. I made several phone calls and was unable to reach the listing agent. Eventually, it all got straightened out. The agent had left the check in his car and had gone on vacation. I got paid two weeks after the closing.
Then, there were what I call “gotcha” checks, where there was something taken out of the check. The broker was owed a fee from the buyer, but the fee wasn’t collected at the closing. I had to pay it and was responsible for collecting it — even though it was owed to the broker, not to me.
Occasionally, fees that I did not know about ahead of time were taken out. I can’t think of any instance where I would take something out of an agent’s check that we hadn’t agreed upon ahead of time.
I can think of one instance where I did not take my cut from an agent’s check and sent her the whole thing. I would think that was a good surprise.
There’s plenty of stress and uncertainty for people who work on a 100-percent commission basis. I always did a good job putting money aside so that we had enough to go for at least a few months without an income. I never know how much money I’ll make each year or when I will get paid.
Take out the stress, and make paying agents a priority
For me as a broker, getting a check to an agent is a top priority. If there’s missing paperwork, as long as there is documentation that it closed that clearly shows where the money came from, the agent gets a check.
I can’t imagine working with anyone I don’t trust. I can’t imagine asking for initials on a contract and withholding someone’s paycheck until I get them. I would be inclined to help get those initials if there was a problem. Isn’t that part of my job? I’m responsible for all of our contracts.
Real estate companies bring on agents they don’t trust so they have to use money as a way to exert control. The larger the office gets, the more rules the broker has to have to police everyone.
There isn’t much I wouldn’t do to get a check to an agent. I don’t have a problem paying to have money wired to my operating account from the closing so that it is immediately available. If needed, I can have checks sent via courier or money wired. I wouldn’t hesitate to pay it out of my own pocket in an emergency.
Most of us work because we need income. There is little that is more important than paying an agent the money she has already worked hard to earn. I certainly wouldn’t want to do anything to anyone that would cause nightmares a decade later.