I am going to try and keep it as brief as possible. And if you’re looking at my screen, which I hope you can see, that you’re probably thinking to yourself that Brennan, it’s Friday, and you want to talk to us about lift agreements and agency agreements, the most boring topic in the entire world when it comes to real estate, which is potentially true. But today I actually want to talk to you about a couple of tips and tricks when it comes to contracts that will help you protect the commission and all of the work that you put into servicing a customer.
So I know it looks like a boring topic, but actually we’re going to keep it relatively high level today, and I’m going to talk about a couple of best practices that if you follow, then you will not lose a commission, which I hope sounds very appealing to all of you. So first, some of the boring stuff, which we’ll run through relatively quickly for all of the new agents when we talk about a listing agreement, an agency agreement, a seller mandate, there’s about 100 different ways to call this an MoU, whatever you want to call it. It’s the document that outlines the contractual agreement between a real estate agent and the property owner, which gives them the authority to represent the property for rent or sale.
So this contract can be between a private owner and Fazwas, or it can be between a developer and Fazwas. What does it cover? So the agency agreement identifies a number of things the parties involved, the details of the property, the duration that the contract is in existence, for the listing price, the commissions, but most importantly, the responsibilities and the obligations for both sides, for the developer, for the owner, or for us as the agency. So there are just a quick note here.
When you’re looking at an agency agreement, and we’ll go through our agency agreements probably next week or the week after, we’ll look at the different types of agreements that we have in place. But really, when you’re looking at an agency agreement, it covers a lot of different things. But there’s really two things that we need to pay attention to that are the most important.
Number one is the commission. So what commission rate have they agreed to pay us? And number two, what is the timing to pay the commission? If they pay us 1020 percent commission, that’s great. But if that commission is paid over the span of three or four years, then that’s not going to be great.
That’s a bit of an extreme example, but I think you get my point. Why is this document important? It provides the evidence that the owner has engaged us and said, hey, listen, I’m happy to work with you. And that document does two things as I said it protects our commission and it helps us protect the timing in which we get paid our commission.
So now diving into stuff that’s a little bit more interesting. So now that you know the background on what the purpose of a listing agreement or an agency agreement is, the question I would ask is does every listing on Fazwez have a signed agency agreement? Now the answer to that is no. And I’m going to explain why it doesn’t.
So we decided that we would rather have more listings on the website, which is going to help us generate more leads and allow us to do less co brokes rather than making it a requirement to have a signed document to activate the listing. So what I mean by that is that owners will come on property, Thailand property FazWaz hitflat and they’ll now list properties for sale directly with us. So we can take two routes.
The we get a requirement for the owner to sign and review a mandate prior to it going live on the website. We’ve tried that and it turns into a huge backlog of properties not going live on the website that we’re chasing them to sign the document. And a lot of owners aren’t ready to sign the document or they’re slow to follow up.
So we would rather put those properties on the website because it gives us the opportunity to sell and rent them and then engage in the process that I’m going to talk to you about today when it comes to getting a contract signed, when to do it, whose responsibility is it. Now we don’t just throw random properties on the website so we can see prior to activating a direct owner listing on FazWaz, the listing team confirms three things. They confirm verbal commitment as a minimum to pay our commission, number two, the listing price, and number three, that the listing price is inclusive of our commission.
So those are three things that we’re able to implement to make sure that A, these are owners that are willing to work with us. They understand that we charge a fee and that the price they’re providing us includes that fee, which is very important for us when it comes to servicing clients. So coming down, how do I know if a listing agreement has been signed? So it’s actually really simple to follow this process.
So it’s really three different things. So number one, you can see here on the right side we have the Agent View section. So that’s the little round button on your mobile or on your desktop.
When you’re logged into FazWaz, you get access to this information when other customers don’t. So the first part is the Agent View will allow you to look at the verification status, which we can see here. When a listing you can see in this case, the listing details, contact and commission have all been confirmed.
So you can see that the owner has confirmed those three things that I just spoke about and that the commission rate is 3%. Now, in section two to note is that in some cases in a market like Pattaya or Chiang Mai or even Bangkok to some degree, sometimes we try to get a 5% commission but the owner is only willing to pay us 3%. So you can see that that’s noted in the notes section here.
So those are the first two things to look at when you look at a listing, what’s the verification status and number two, what has been reported in the notes. Now, if it hasn’t been verified, then you’ll see that it’s an unverified listing here which means that we haven’t confirmed those details but most of them you’ll see are in this status. But we know that even though the commission has been confirmed, this might just be a verbal agreement.
So that doesn’t actually mean that an agency agreement has been signed. And this is why you need to look on the back end. So all you need to do is click this button here that says open unit on back end.
And you can see that under the document sections you’ll see assigned agency agreement updated or you’ll actually see a screenshot of the verbal of the written commitment because a lot of the time it’s in line or it’s in a message, which the listing team will upload here for your reference. When it’s on the phone, it’s obviously hard to do. They’ll send an agency agreement to them, everybody gets sent an agency agreement but whether they sign and they return it, it’s too much of a process for us to chase these owners, particularly when we don’t even have a buyer or a person that is interested in the property.
So you can see here this is a contract that has been signed and that’s updated in the back end. So now that we understand that, the question then becomes whose responsibility is it to get the signed agreement and when should this be done? And this is where I’m going to introduce you to a very simple process that if you follow it, it’s going to protect yourself. It’s very easy for us as agents to do and it actually falls in line with the other power calls I’ve been running in terms of speaking to owners, right? It’s a chance to get on the phone and have a chat to the owner about the property.
So that’s why it’s our role as agents, right? So now that we know that it’s our role, it’s a very simple process to follow and it’s all about having leverage. Right now, leverage essentially means being in a position of control and I’ll explain what that means in these examples. So the first best practice is that anytime you have a client that is interested to view a property prior to you viewing the property, when you call the owner to say hey Brennan, in this case is the owner’s name, I guess.
Hey, Brennan, I have a client that’s interested in viewing your property this Friday. Can I just confirm that the property is still available at 10 million Baht, and that includes our 3% commission rate, right? So that’s very simple to do. You’re calling the owner anyways to arrange access to the property.
And that’s a perfect time to confirm that a, the price is still the same because the price might have changed, it might have gone up, it might have gone down, and then B, that just to get the confirmation again before you do the viewing, that the commission is included in that price. Now, why is that important? Because if the owner wants the viewing, then they have to agree to pay you the commission, right? And that’s where you have leverage. If you go do the viewing and the viewing is done, and then you say, oh, by the way, does that include our commission? You’re too late, you’ve lost your leverage, right? And if they say, no, you’ve already viewed the property, your client might be interested in it, and that now you’re in a bit of a pickle, right? So if the price has changed, it allows you to update the client prior to the viewing versus post viewing when they’ve seen the property and they like it.
So that’s best practice number one. Every time before you do a viewing, you make sure that the price has been confirmed and that the commission is included in that price. You’re calling the owner anyways, you’re speaking to them anyways.
Very simple process, and that provides you leverage at that point. Now, moving on. So let’s say that the client’s actually now interested in submitting an offer.
So prior to submitting an offer, this is when you have to get the agency agreement signed and it’s still about leverage if you submit an offer before the agency agreement is signed. Then again, you’re setting yourself up to be in a tough situation. So in the same example, hey, Brennan, my clients narrowed down their interest into a handful of units, right? So you’re expressing to them that they might be interested, right? It’s not that, yeah, they really want your unit, but it’s just playing a bit coy and saying, hey, they like the building, they’ve seen a few units, I think they could be interested in yours, and I’m going to try and push them into submitting an offer.
But in order to do that, I’ve just got to get an agency agreement signed, right? It’s not about trust, it’s about best practice. And at the end of the day, this is a business and I need to follow the processes in place that protect my efforts, my commission and the business as well, right. So I’ll send you across that document if you can get that signed, right? So again, why is that important? It’s important because you haven’t submitted an offer yet.
So in order for the owner to get the offer, they have to agree to our agency agreement, right? No agreement, no offer. Right. At this point, you’ve already talked to them about commission before you did the viewing, right? They’ve already confirmed price.
They’ve already confirmed that they’re going to pay you a commission. So there would be no reason now that they wouldn’t sign the agency agreement, right? Now, I’ve seen examples where some of our agents haven’t signed the agency agreement before they’ve submitted the offer. And then you’ve lost your leverage as an agent.
Right? And that what happens, is that the owner can then say that, you know what, Brennan? I’m not happy with the level of service that you provided. I’m only going to pay you 1%. And there’s not much you can do about it because you don’t have a signed agreement, because you didn’t get that signed agreement before you submitted the offer.
So, again, it’s about leverage. If you skip either one of these two steps, you lose your leverage and you expose yourself to not getting paid your commission. So there is one note where there’s an exception to this.
And I’ve come across this. I’ve had an experience. Sometimes you do an inspection and the property owner lives in the property.
You can’t control whether they’re there or what is said. And it’s a very risky situation to be in. I always tried to keep the owner and the seller separate.
Sorry, the owner and the client separate. And in most cases, that works, but in some cases and as the transaction progresses, sometimes they meet, sometimes they want to talk. Before you have anybody in the room together, before you introduce anybody, it is critical that you have a signed agency agreement and that you’ve registered that client so that you’re double protected.
You have the mandate that outlines that the owner is happy to work with you, that they’re going to pay you this commission, they’re going to pay you within this period of time. And then you’ve registered the client by name with them saying, hey, listen, this is the client that I’ve introduced to the property. And again, you’re protected.
So if the owner lives in the property, then, like I said, it’s hard to control what happens. You put two people in a room. It’s a risky, risky thing, so try and avoid it at all costs.
But a lot of the times, or some of the times rather, you can’t. So if the owner lives in the property, make sure that you have a signed agency agreement prior to viewing, and you register that client by name. So I hope those two tips help.
And if you follow those things, you maintain your leverage, and it puts you in a situation where all the effort and hard work that you put in, you will be protected. Right? So the takeaways are, before you inspect any property, check to see if an agency agreement has been signed. So we know how to do that.
You look at the agent view, you check the status, you look in the back end, and if the agency agreement is signed there, then you know you’re in good shape, right? If not, always call and confirm the price and the commission prior to viewing. If the owner lives in the property, make sure you get an agreement assigned, agency agreement prior to viewing, because, again, you never know what’s going to happen. Always have an agency agreement signed prior to submitting an offer.
That’s a no brainer. That is an absolute must, because if you submit the offer, then you’ve lost your leverage when you’ve got an agency agreement. Make sure that you upload that signed agency agreement into the document section in the back end.
And we will provide you guys with Esignature software so that you’re able to do that signature sorry, exchange the contract and get that signed more simply. And that will find an easier way to get that uploaded. But again, it’s only two or three clicks now with the agent view, so that should be done.
And make sure that you’re always leaving notes for the next person so they’re not repeating the steps that you’re taking, right? So we have so many agents in each market now that we want to make sure that do the best thing for you, do the best thing for your colleagues. Work together as a team, so that when you’re signing a listing agency agreement that you’ve uploaded it, you’ve put it in the notes, and that will just make everybody else’s job much, much easier. So that’s it for today.
We’ve sent out Friday’s feedback form. Again, we’re asking for your feedback in terms of changing up the format of these Power calls, in terms of making it more engaging and bringing in other people to speak and having Q and A sessions and making it a little bit more interactive, or following up with a Power call like this with a workshop in the afternoon. So anybody that wants to ask questions can then join the workshop in the afternoon.
We’ll allow the host of the Power Call in the morning to go into deeper detail of each area. So we’ve asked for your feedback. Let us know what topics we’re missing.
Let us know do you want more training on taxes? Transfer fees on regulations? What is it that you want more training on? And we’ll get the best people in the business to host a Power Call and make sure that we’re providing you with all the training and all the information you need to be the best agent that you can be. So that’s it for today. Thank you again and enjoy the weekend ahead and we will see you next week.