WAR OF THE REAL ESTATE NETWORKS
It’s all about “maximum protection” for consumers.
Article originally published AUGUST 29, 2005 –Reviewed and approved.
By Neil Jenman
Some time ago – oh, it must be three, maybe four years – a real estate agent in Brisbane had a really bad day. He lost his loyal sales manager and all his best salespeople.
What happened? Why did one of Ray White’s most popular and successful franchisees suddenly become so lonely?
Well, someone made his loyal people an offer they couldn’t refuse. That “someone” was a competing real estate franchise called RE/MAX.
RE/MAX means real estate at “maximum commission”. Instead of paying salespeople the standard split of between 30 and 50 per cent – RE/MAX pays its salespeople 100 per cent of the commission.
RE/MAX has 85,000 salespeople operating out of 4,613 offices in 44 countries.
Thousands of these RE/MAX salespeople were once loyal salespeople in other franchises. RE/MAX often boasts that its salespeople are the most successful in the world – no, no, not in client satisfaction, but in bucks in their pockets sort of successful.
And certainly not successful in terms of loyalty.
For centuries, leaders have lured enemy troops with the promise of riches. But commercial loyalty is ever-so fragile. As Alexander the Great’s dad told him, “Whatever gave you the disastrous idea that men you had corrupted by money would remain your loyal supporters?”
Today, RE/MAX salespeople “run a business within a business”. In return for getting 100 per cent of the commission, the salespeople pay the boss (the franchisee) a monthly desk fee. The more desks the boss rents, the more money the boss makes. RE/MAX often poaches salespeople from other franchises which means that the other franchises make less money – and so does their head office. Not good for business at all. Unless you are RE/MAX.
A few days ago, someone complained to the Queensland Office of Fair Trading (who are responsible for protecting consumers) that the arrangement between the RE/MAX bosses and their salespeople was “illegal”. The RE/MAX salespeople are not supposed to work as “independent contractors” unless they hold a different category of license than the standard salesperson’s license.
Brian White, the boss of the Ray White franchise, in an article headed, Unlicensed contractors must be put out of business, says this practice must be stopped. For the sake of consumers.
“What a dangerous practice unlicensed independent contractors are proving to be,” says Mr White.
Ah, but what “great news” that the Office of Fair Trading is “acting to eliminate this practice.”
Not just for Queenslanders, says White, but for “all Australians.”
Today, with less sales being made, it’s getting tough for agents, really tough.
Brian White says, “A cooling market is when consumers need maximum protection.” That’s what we need in real estate – more franchise bosses showing loyalty to the public.
Yes, consumers sure do need maximum protection.
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