Is a Salary Based Compensation in Our Future?
The current real estate agent base has not adapted to the changes necessary to meet the needs of the consumer. Most attribute this to the generational gap between the agent (53 years old) and the average home buyer (31).
The industry needs to get younger. An infusion of new talent that understands today's consumer and is focused on customer service.
This new generation has the communication and technology skills to connect and provide the required services. First-time home buyers will comprise 50% of the transactions in 2009 and most will hire a buyer's agent.
Will the younger generations see opportunity in our industry? If they do, how will they get started? Where will their business come from? Can they earn enough in their start-up years to survive?
Would salary based compensation (guaranteed draw) with commission overrides provide the security necessary for entry level agents? The agent will have to be accountable to the sales process in order to receive this guaranteed income (like the corporate world).
The company that offers this compensation package must have these key elements in their value proposition to the agent:
- Lead generation in order to "guarantee" a flow of business for the agent. As the agent gains experience and starts to develop their own sources of business they can demand a higher commission split in exchange for reduced lead flow. The company would then offer those leads to new agents.
- Exceptional training and support so that the agent develops the necessary skills quickly. Mentoring and coaching is part of this process.
- A performance standard for the agent whereby they are accountable to a work flow. The company is taking a "risk" with the guaranteed draw and must have a structured sales process to insure success.
If you were considering a real estate career, would this business model appeal to you?