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Commission justification?

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Choice of Real Estate Model


There’s a post on Active Rain right now that is getting bombarded by the people at housing panic. The post is about an agent that will not cut her commission and the comments are worth taking a look.

When we blog, our goal is to create business, our goal should be to open up dialogue and discussion and THAT is the beauty of blogging.

On a side note……I could also tell you that I don’t accept foul language or offensive comments on my blog and those will be zapped. There is nothing healthier than good discussion without personal attacks and name calling.

So here is a scenario where the consumer is letting us know how they feel and the response from most agents is to get defensive or ignore them but no one has addressed their questions…..how do you, as a real estate agent, justify your commission?

For some agents the answer will be simple: I don’t have to justify my commission, my clients don’t expect me to and they are happy to pay for my services.

What it boils down to, in this world of information, is that there will be different real estate models for different people. There is absolutely nothing wrong with that.

  • If the consumer thinks that they can do the job and do a FSBO – go for it!
  • If the consumer thinks that they can do part of the job and does not want to pay a complete commission – go for it!
  • If the consumer thinks that they don’t have time to handle all the details that are involved and sees value in hiring a full-service Realtor – go for it!

I can tell you that I will not work with someone that does not see value in what I do; before starting our business relationship, where both will have active parts, we would be starting on the wrong foot.

A lot of the discussion went into the direction of the unethical reputation of the real estate industry and the low education standards. We’ve discussed those in length here in Agent Genius and sadly enough, I agree with most of their points.

  • A lot of real estate agents don’t bring value to the table – true
  • A lot of real estate agents don’t know right from wrong – true
  • The one week education requirement is not enough – true

Then the discussion takes an interesting turn with Brian Brady’s post HousingPanic ALMOST Got It Right: How To Overcome Commodization By Employing The Dollarization Discipline.

I will end saying that there are plenty of real estate agents that are educated, are ethical and bring plenty of value to the table. We are out there showing our competence on a daily basis and for those that don’t want to work with us, we totally understand, it’s their choice. There are plenty of real estate models out there and the consumer does have a choice.

Ines is all Miami, all the time. A Miami Beach Realtor® with Majestic properties, Ines authors Miamism.com, PrimeMiamiBeach.com, and MiamismPix.com and is always on communication's leading edge. She goes out of her way to engage and be engaged, often using Mojitos to keep the mood light and give everything she does a Miami flavor. You can find her goofing off or instigating trouble at Twitter, Flickr, Facebook or LinkedIn.

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54 Comments

54 Comments

  1. Chris Lengquist

    March 21, 2008 at 10:25 am

    I believe in choice, transparency and a free economy. Therefore, as you would imagine, I don’t disagree with your post or arguments. Why people get up set at discount brokers or get upset at full-service brokers is beyond me. Choose which model you prefer and use it.

    I don’t drive by Taco Bell and scream out the window “your tacos suck!” because I prefer Taco Via. I mean, isn’t that what people are doing here? 🙂

  2. Ines

    March 21, 2008 at 10:56 am

    Chris – the power of choice is an unbelievable one and we have this amazing country to thank for that. I’m still laughing at your Taco Bell analogy.

  3. Larry Yatkowsky

    March 21, 2008 at 11:21 am

    Marjorie Garber wrote in “Sex and Real Estate: Why We Love Houses” : —

    “Realtors often find themselves functioning as therapists, psychologists, and marriage counselors.”. Stop and think about this for 10 seconds.
    This one statement justifies my commission.
    Good god! With these skill sets we are working for the same money as peasants. My solution – Let’s start a union and strike for justice and pay equity. It’s time we get paid for our cumulative professional capabilities. First thing on the agenda is consumer paid medical and a pension plan. Failing that, a lunch would be nice.
    Ines, you have been appointed the honorary shop steward. .>)

  4. Vicki Moore

    March 21, 2008 at 11:22 am

    I justify my commission by explaining the value I provide in the negotation process, contract preparation and response, and how I intend to keep them from being involved in litigation. I explain the “why.” Why you fill out disclosures the right way. Why you counter offer. Why you don’t accept a particular offer, no matter how good it looks on the face. Why it’s important for the buyer to have inspections/contingencies.

    If they don’t I agree, that’s certainly okay with me. There’s a cost to price. Low price = high cost.

  5. Bob

    March 21, 2008 at 11:38 am

    >”There’s a cost to price. Low price = high cost.”

    Price doesn’t equate to skill, professionalism or integrity.

  6. Larry Yatkowsky

    March 21, 2008 at 11:45 am

    Bob,
    Are we talking about Realtors or Presidents? .>)

  7. Vicki Moore

    March 21, 2008 at 11:53 am

    Bob – You get what you pay for. It was a simple comment and reply to a very complex issue.

    “Price doesn’t equate to skill, professionalism or integrity.” I believe, to a certain extent, it does. Again, complex issue.

  8. Mariana Wagner

    March 21, 2008 at 12:18 pm

    Yeah… That post went overboard, IMHO. I completely agree with everything that you opinted out here. Specifically, ” I will not work with someone that does not see value in what I do” Exactly.

  9. Mark A.

    March 21, 2008 at 12:22 pm

    I read Brian Brady’s post, and I listened to the infamous RE USA podcast with Broker Bryant about this subject. Brian has it right: We, as Realtors, haven’t done a good enough job of explaining our value proposition (at least those of us who actually add value to the transaction) to consumers. A stock broker who commented on AR, made a similar reference (comparing his services to Charles Schwab).
    I will write a post about this on my own blog shortly.

  10. Vicki Moore

    March 21, 2008 at 12:30 pm

    Mark – I completely agree with you. It is all up to us. A brand new agent with little to no experience should be differentiated in a variety of ways, including price, from a long-time veteran. There are many facets to this topic.

  11. Ines

    March 21, 2008 at 1:01 pm

    Larry – you know I LOVE your sense of humor, but in this industry, because of the differences in models and needs of the consumer, it’s important to set ourselves apart from the norm. Wouldn’t it be interesting if we would get paid for our time upfront like many professions? Or for the consumer to reimburse all marketing costs?……that’s another model right there.

    Vicki – those that utilize our services and see the value we bring don’t have to be convinced – those that don’t want to see the value and don’t want to use our services should not be convinced because no matter what we say, it will never be enough.

    Bob – as much as I would like to agree with you, you do “get what you pay for” – I still have in my mind a local seller that hired a discount brokerage and he wanted to show his own house. Everything he said from the time I walked in there with my buyer clients was horrid and the clients ran away scared……too bad, because it was a home with potential and he was not capable of painting a proper picture. He ended up getting a lot less for the house than it was worth, but ultimately he made the decision and walked away doing what he wanted.

    Mariana – it would be a big waste of time for all the parties involved. As an architect I walked away from many jobs because the client was designing the house and was not open to professional criticism and tweaking of their ideas….they did not need an architect, they needed a draftsman.

    Mark – It’s my number one goal to show what value I add to a transaction and I go over it again and again in my blog. Those clients that choose us know and those that read the blog have a choice to make. We have to remember that it’s about the customer, not about us.

  12. Vance Shutes

    March 21, 2008 at 1:05 pm

    Ines,

    It may take a generation to change consumer perception of the value which we, as professional Realtors, bring to each transaction – but that shouldn’t keep us from the effort. We have much to learn from the legal profession (disclaimer here – “I’m not authorized to give legal advice. Please consult an attorney….:) in this regard: There are paralegals, associates, junior partners, and senior partners. Each of these titles connotes both a different perception by the consumer, and a different level of value brought to a legal matter. Each of them brings a different level of compensation to the table. As others have so ably commented, you get what you pay for – or are willing to pay for.

    While the attorney brings experience to their ability to advise their client, they do not necessarily bring a guaranteed outcome. The same is true with professional Realtors – we bring experience, advice, and no guarantee of outcome. Unlike Attorneys, whose bill is to be paid no matter the outcome, our client gets our experience and best effort, and only pays us if we get the job done.

    Again, it may take a generation to bring about a changed perception of our value as Realtors, but we shall not shy away from the effort.

  13. John Lauber

    March 21, 2008 at 1:19 pm

    I think it was Russell Shaw I heard mention a study that stated 15% of people buy strictly on price. No matter what value you may bring to the table, they’re strictly going by price. I wish them well and move on. That leaves the other 85% who may realize your value. I won’t go into limited vs full service (I’m with a full service broker) as there are stories on both sides. I’m with you Ines, it’s about the customer.

  14. Ines

    March 21, 2008 at 1:37 pm

    Vance – I totally agree with you and many of us are going full force to try to change the perception as well as show our worth. The fact that we don’t get paid until a property sells may be part of the problem and I can remember many times in my life where my services were not valued because the customer was not paying for it, both as a Realtor and as an architect.

  15. Norm Fisher

    March 21, 2008 at 2:05 pm

    Ines,

    “The fact that we don’t get paid until a property sells may be part of the problem.”

    This is exactly correct. Since most of us have only one revenue source, our clients who are successful subsidize those who are not. Until people are willing to pay a fair price for the services they want, commissions will likely remain on the higher side.

    I also think it’s time that agents stopped using generalizations like, “we’re worth it.” I accept you assertion that you’re worth it. I also believe that I’m worth it. 🙂 There are many agents in our respective markets which charge the same fee that we do who are clearly not worth it. When groups of agents who don’t even know each other band together to publicly shout “we’re worth it” to people they don’t even know they kind of come off looking foolish. It’s idiotic to assume that all agents are worth X.

  16. Benjamin Bach

    March 21, 2008 at 2:51 pm

    “A brand new agent with little to no experience should be differentiated in a variety of ways, including price, from a long-time veteran”

    Ines, I’m going to disagree with this. If someone who has little experience can still provide value, they will be able to justify the fee they believe they are worth.

    The first time I ever listed and sold a large multi family building – was I experienced selling them? Nope. Did I get my clients 100% of list price ? Yup.

    A 20 year veteran has had a similar property (16 units) for sale for 2 years with no luck . . . He has it listed at a 2% total commission (paying 1% and 1%). He has more experience, but delivers less value. That’s why my clients are willing to pay me *double* what they would pay him.

    I’ve competed in a listing presentation with a company that sells apartment buildings for 2.5% total commission – and I have listed the buildings at a much higher commission – why? Because I establish, and deliver value – and drumroll – a fat bottom line for my clients. Isn’t that what it’s worth ??

    BenjaminBach.com

  17. Ines

    March 21, 2008 at 2:54 pm

    John – and unfortunately for them, a lot of those that fit into the15% category that buy strictly on price, end up making bad deals. And by price it can mean not only commission but listing for much higher than they should. I also wish them well and move on. Without a doubt, it is always about the customer and their choices.

    Norm – talk is cheap – actions speak louder than words…..so let’s get to work! 🙂

  18. Rick Emens (R)

    March 21, 2008 at 3:03 pm

    I was with a very high end CB office (average sale price $1.5m) for over 12 years and left to open a full service flat fee discount brokerage and I’ve never been happier. The average amount of time an agent spends on a listing is 40-50 hours and to be paid a fat 6 figure commission for one sale is absurd. Since I opened my office three and a half years ago I’ve sold properties ranging in price from $140k to $2.2m and in the process saved my sellers nearly $2m in commissions they would have paid for the exact same service as they received from my office. What that equates to is some very happy sellers and a lot of referral business. If someone works the super high end market they should be paid accordingly, but given the current market conditions, paying what most agents feel they’re “worth” could very well end putting many sellers in a short sale situation.

  19. Ines

    March 21, 2008 at 3:04 pm

    Benjamin – the whole experience issue is a touchy one. Because the real estate industry does not rely on education (we all agree that the 1 week course is a joke). So then most of the 20+ year experienced agents will get on your back about knowing more because of all the transactions that they have under their belt.

    I do think experience counts for a lot – but also what your background is. There are unbelievable sales people in the industry, there are others with legal backgrounds, construction and architecture(yours truly) – or people with just great business sense. Once you prove your worth, I can agree that the experience is secondary, but you have to admit that it is worth something.

  20. Benjamin Bach

    March 21, 2008 at 3:18 pm

    Some people have 1 year of experience repeated 15 times. You can’t tell just because of a number. I’ve had 25 year veterans do ridicolous things on the other side of a transaction.

  21. Ines

    March 21, 2008 at 3:56 pm

    Benjamin – 🙂 been there!

  22. Jonathan Dalton

    March 21, 2008 at 5:01 pm

    Experience doesn’t matter if the person has been making the same mistakes for years …

  23. John Lauber

    March 21, 2008 at 5:35 pm

    Exactly Jonathan. I see some “experienced” agents (including my original “mentor”) making mistakes, IMO. Like Benjamin said, where did your experience come from. It doesn’t necessarily need to be FROM real estate. Whatever industry it’s from, may translate well to the job at hand. I was in IT before real estate. Every sale is another consulting project, IMO. Every situation is different and I need to help find the solution, keeping the customers objective in mind.

  24. monika

    March 21, 2008 at 7:07 pm

    It’s an age old problem. Most agents don’t know how to establish and demonstrate value.

    To Rick’s comment, I spend way more than 40-50 hours on my listings and I have never seen a 6 % list side commission…ever. Maybe I work in the wrong area but it is a lot less here. That aside I do believe we must as agents be able to communicate our value and be able to break it down as Brian Brady suggested… dollarization it. We won’t ever get people to understand unless we’re able to do so.
    Like you Ines…I won’t work with people who don’t see the value I bring. So far I have not had a problem breaking it down for them and enjoy good working relationships with my clients. NH is a fiduciary state and I take my responsibilities very seriously. Most of my business is repeat and referrals … that in itself is a testimonial.
    Our industry has a long way to go but there are many well trained, ethical good REALTORS out there.

  25. Bob

    March 21, 2008 at 7:20 pm

    Rick proves my point that price is not an indicator of quality service, professionalism or integrity. 12 years selling high end properties for as much as anyone is charging and now selling the same properties (and probably with many of the same clients), but at lower price to the client. Is the client getting less? Doubtful. is Rick less ethical? Doubt that too. Did Rick’s skills diminish? No.

    Bottom line is that if you have to defend your commission, you have already lost.

  26. Ines

    March 21, 2008 at 7:51 pm

    Rick – that’s exactly what I’m talking about – you made a conscious decision to change your business model and give the consumer a choice. Those customers that knew you and your worth would be happy to pay for your discount model unless of course, they want the big Coldwell Banker name behind them……which a lot of people do value.

    Jonathan – I know plenty of old timers that keep making those same mistakes over and over and their excuse is “can’t teach an old dog new tricks”….could be lame.

    Moni – when you have been in business as many years as you and Jay, it makes sense that you could break down your costs. I can tell you that it will be a nice challenge for Rick and I to do that because our market varies so much. We have listings from $124,000 to $4.2 million and their marketing is totally different as well as the services we include. I just did floor plan renderings for a historic house and staged an older 30’s…..maybe it’s time I break it down.

    Bob – interestingly enough, I do believe that those high paying customers that were happy with Rick’s performance would have stuck right by him no matter what he charged because they saw the value he brought to the table.

  27. Larry Yatkowsky

    March 21, 2008 at 8:23 pm

    What’s strange about all this topic is that the after all my time in this great business the circle just keeps on going round and round………

    Maybe it’s just me.

  28. monika

    March 21, 2008 at 8:30 pm

    Yes ines try breaking it down. you’d probably be shocked as to how fast the hours add up.

  29. Jonathan Dalton

    March 21, 2008 at 8:34 pm

    I think Ines and others are on the right track.

    Either consumers will see your value or they won’t. There are enough who do that you can and ought to dedicate your time and energy with them. As I wrote on my own blog a week or so back, I’m not just an extension of my lockbox. If all you need is someone with a SUPRA key, there are hundreds of other agents you can call.

    At least a couple of them might actually pick up their phone at whatever other job they’re holding.

  30. Ines

    March 21, 2008 at 9:02 pm

    Larry – the ironies of business! the best part of it is that those that do well in real estate are the ones that LOVE what they do and it shows………it’s not you.

    Moni – it’s a challenge…..I’ll take it on

    Jonathan – absolutely – just the thought of so many agents out there that don’t pick up their phones is absurd. We don’t do lock-boxes here, but I can see where you are coming from. Before the consumer can see the value, you need to find it yourself – look at Rick above, thought he was charging too much and changed his model successfully.

    We are only worth what we believe we are worth.

  31. Missy Caulk

    March 21, 2008 at 10:14 pm

    Ines, I don’t like defending my commission and really have rarely had too. The debate on AR is wild. I feel sorry for Kim, glad I didn’t post on it. I don’t like attacks of people, it is petty. Nothing wrong with a good honest discussion with consumers but not in an attacking, deragatoy way. The internet has changed the way consumers perceive the value of what we do, after all ………the listings are everywhere. Many feel they don’t need us.
    Fortunately for us, we must define our value in the eyes of the consumer. I think most of the people, ( not all ) commenting are upset about the housing market in general and it is a way to vent. We must be diligent in our quest to inform the consumers, why and we do what we do that brings value to the table.
    If they want to do it on there own or MLS only they have that option available to them.

  32. Florida Waterfront Real Estate

    March 22, 2008 at 6:20 am

    Providing a quality service is what one should strive to do and what consumers want any thing is less is that less. So when shopping for a real estate agent this is what the consumer is trying to find the agent that appears to be of the same mind. People go to real estate agents because they don’t want to do it themselves and value there service and a fee is expected.

  33. Ines

    March 22, 2008 at 8:26 am

    Missy – there are very few FSBO’s in my area right now, because they have realized that they need all the exposure they can get and paying $300-$400 to place their house on the MLS is not enough. My commission is never questioned, on the contrary, people are willing to pay more to get their house sold quicker.
    As for what’s going on over there – I didn’t like the comment about other Realtors not stepping in to help and answer the questions being asked. It’s her blog and she has not asked for help….I guess they don’t understand blogging etiquette either. The offensive comments should be removed without a doubt.
    There are some great questions and comments there that I would love to address…….but it’s not up to me.

  34. Toronto realtor

    March 22, 2008 at 8:30 am

    Working as one of the real estate agents, I think that ater these years in the business I bring a certain credibility to this profession. The author of this article has point, I don’t like seeing real estate agents as dishonest, mistrusted and useles in this era of the free information. I’m not saying this only because I made my living on being the realtor, but this profession made very important rules and practices that helps the real estate business. Sure, there are lots creative, highly capable players on the market out there without any help of professional, but real estate agent is still not an “antique”.

  35. Bob

    March 22, 2008 at 9:02 am

    I have been an agent before homes were ever on the Internet and consumer sentiment about real estate agents has not changed. We still rank pretty much in the same area as the used car salesman.

    What has changed is the consumers ability to be heard. HP and sites like those are AR bloggers worst nightmare because so many agents write in a condescending manner about the consumer and those comments will see the light of day.

    One of the biggest takeaways from that discussion is that you need to be willing to have whatever you write used against you, therefor you better be willing to own it in public.

  36. Bill Lublin

    March 22, 2008 at 9:23 am

    Ines: It is wonderful to see some articulation and reason to the conversation.
    I have never had a problem explaining my fees to my clients (I don;t justify my commission – I justify to myself why I order a hot fudge brownie for desert) – And I agree that experience is not by itself an indication of skill, knowledge or expertise, (some people can take a week to make a three minute egg) but experiecne can be helpful and designations should be indicative of some level of even theoreticalknowledge. That being said, we do need to explain to the consumer the how we are compensated and what of a commission is being divided, (and why) and what portion of the fee goes to the overhead of the company, and how much goes to the person who secures the buyer becuase they are not familiar with the somewhat complex compensation arrangements that we make between our companies and our colleagues. The really sad part about that whole discussion is not only how little the uninformed consumer thinks we know , but how much they don’t know about what the good competent informed agent with a good well organized company behind them actually does.

    As far as flat fee or alternative business models – I have my own opinions, and I demonstrate them through the company I operate, but I believe that just listing a property on the MLS is no more effective than just sticking a sign in an electronic lawn – Even that business model relies upon the real estate community to sell the property – they (the consumer and that business model) just seem to be of the opinion that there is little value in the efforts of the listing or marketing agents and their companies. And limited service or flat fee, or discount brokers are entitled to charge whatever they want for whatever they do. After all, who knows better then they do what their time and efforts are worth? I just don’t want the consumer to think that we provide the same services when if fact, we do not.

    I only wish that the consumer didn’t view the industry and its members in such a monolithic manner so that the differences between all of these business models could be more readily discerned by the consumer. I just wouldn’t want a consumer to feel that the only difference between these companies was price when there are substantial differences in the type of work and the potential results that they might receive.

    Bit thanks again for making your points so well.

  37. Ines

    March 22, 2008 at 9:56 am

    Bob – it really is surprising that the questions have not been addressed and it’s a real shame. I would be responding to every single objection because there are really valuable points being made. What better place than to clear up the bad perception? There are plenty of people there that will not change their minds and that’s fine, but maybe they could get more information to base their opinions on.

    Bill – the whole point in that conversation is that the consumer really doesn’t know what our business entails and no one is explaining. Talk about an opportunity to explain the process, the details and the obstacles that we encounter in every transaction.

    Now about the other models – it gets a bit more difficult for the consumer to decide what services to pick and it also has to do with establishing rapport with the agent (if you choose to use one). I can tell you that even within full-service companies, the value you will offer as opposed to the one I will offer will be totally different and that’s the real beauty of blogging and explaining your value.

    The “monolithic manner” in which the consumer views the industry also applies to the “monolithic manner” in which they talk about consumer needs – THAT’s the part that intrigues me the most. For someone to say….”your full-service, full-commission model needs to change now because the consumer doesn’t need you” is ironic because there are plenty of consumers that prefer the “full-service, full-commission” model because not only do they not have the time to handle it themselves, they don’t have the interest and are happy to pay for the commission. And THOSE, my friend, are the customers I work with.

    ….Thank you for taking the time to comment and contribute to the discussion.

  38. Michael Zebold

    March 22, 2008 at 10:04 am

    I am not a Real Estate agent but a Mortgage Broker and there is always someone trying to cut my commissions or tries to justify the fees I charge. From what I learned in the business you are only worth what you ask for.

  39. Mariana Wagner

    March 22, 2008 at 11:15 am

    Ultimately, this is a private conversation between me and my Seller. It really is not the business of anyone else. I believe the financial model behind my business is sound, and my Sellers agree.

    re: HP and the AR post… Why should I try to “justify” anything to someone who will never use my services, nor any other RE Agent services for that matter? Makes no sense. I might as well try to convince a Vegan to go deer hunting. Waste of time. (I would rather watch Growing Pains reruns.)

    However, in support of that AR post, I did reply …

  40. Mariana Wagner

    March 22, 2008 at 11:16 am

    (Since the quote didn’t show up…)

    “First… I am paid for selling a home for a seller. If the home does not sell, I do not get paid. I get paid for the acceptable outcome – not for the “specific things I do” to get it sold. (I just happen to know the right things to do – and NOT do – to get it sold.) If THAT were the case, then I would bill my Sellers by the hour whether or not their house sold, which is a HORRIBLE business model IMHO … and of NO good use to the Seller.

    What I charge is at MY discretion. I am a small businees owner and it is MY decision how much I sell MY services/goods for.

    And when all is said and done, commissions are ALWAYS negotiable.”

  41. Ines

    March 22, 2008 at 11:28 am

    Mariana – your responses at AR were great and really give a clear picture. I totally agree with you – a lot of those people want us to justify our pay their way as absurd as that may be. And the whole scenario of getting paid on a performance basis……that’s exactly what we do. The house doesn’t sell…..we don’t get paid, no matter the hours and the marketing dollars and effort that has gone into the property.

    I’m still staying away…..but it’s not easy.

  42. Wade Young

    March 22, 2008 at 8:39 pm

    Mariana– Good article, and I will throw in my experience for reference. I bought a house, and at the time, I didn’t think much of realtors. I found them to be worthless, not worth the commissions they received. My wife did most of the house hunting, as is usual with most married couples. Unfortunately, she couldn’t find anything that fit her tastes, and we HAD to have a house. My wife sent an email detailing the current house that we lived in, and she wanted something similar. We arrived by plane, and the realtor showed my wife the print outs of what she had to for us to look at. The house on the top of the stack — well, it was the realtor’s best — and my wife immediately said that she refused to even look at it. The reason my wife didn’t want to look at it? Well, the garage was attached, and that is something that my wife just wouldn’t accept. Garages belong in the back, you know … circa 1929 … garages should know their place. How dare they be up with the rest of the house! Also, my wife was only interested in 1932 or before. The only thing the realtor had to show us was a brand new house with the garage in the front, but she begged my wife to at least look at the house, promising she would be interested. My wife relented, and well … we bought the house. We also wanted to look at houses in the $200 range, and the house we bought was $405. That’s a balls out real estate lady. The point is that the house was not our dream house, but she knew we would be happy there. The houses were new houses made (sort of) to look like old houses. The neighborhood was great. My son was born there. I am happy to have lived there, but I am also happy to have moved on (in a high rise now). The point is — that real estate agent was worth every single dollar. She knew my wife. She knew what my wife was willing to accept. She knew the area. She arm twisted my wife. She delivered. My wife had scoped everything online, and found nada. She earned her money. I have since changed my opinion on real estate agents. I could never have found that house online, and we spent 4 happy years there. There really are some real estate agents who know an area, and you can’t get what is in their head online, in pictures or descriptions. The good agents are worth full commission and should not compromise.

  43. Ann Cummings

    March 23, 2008 at 5:30 am

    Wade Young wrote: “There really are some real estate agents who know an area, and you can’t get what is in their head online, in pictures or descriptions. The good agents are worth full commission and should not compromise.”

    Wade, that speaks volumes to those of us who bring to the table exactly what that agent did who found you that house that you would never have considered otherwise. Hooray for you and double hooray for her!

    My professional fees are between me and my clients, and I never DEFEND my fees. I DEMONSTRATE my skills, my experience and expertise, my abilities and everything else I bring to the table for each of my clients. Most of my business is repeat clients and word-of-mouth referrals, and that speaks volumes as to my abilities.

    For all we are and all we do and all we bring to the table, I see absolutely no way and no reason to ‘dollarize’ that. How do you ‘dollarize’ all the education and networking we do to stay on top of our game, to stay ahead of the majority of agents in our given areas? Sure, you can ‘dollarize’ some marketing and advertising, and you can ‘dollarize’ the physical hours put into each client, but what about what’s in our heads, as Wade put it? What about the mental and emotional hours put into clients? No way on earth to ‘dollarize’ that!

    And as for trying to answer most of those who left comments on that post on AR, I firmly believe that it wouldn’t matter one iota to those people what any of us would write there as their sole purpose is to bash each of us and rip our profession apart. That’s very clear when you look at the website they all are part of. My time and my energies are better spent with those who really do appreciate what I stand for, and it’s also better spent learning even more ways to bring even more value to my clients by reading and networking online.

    Healthy realistic discussions are great and are also educational – nasty ones have nothing to be gained from them and are total time-wasters.

  44. Blue Ridge Cabin Rentals

    March 23, 2008 at 5:53 am

    People use a realtor for a service and are charged for the service. The breakdown of what all is included is not necessary it is understood.

  45. monika

    March 23, 2008 at 7:41 am

    I agree nearly one hundred percent with Ann except the dollarization part.

    I think especially if you are a new agent you must learn to do it. Is it line by line? No. But in some basic categories you can and should know your value point. I know that for me, doing a CMA may take an average of 4 hours and that is before I even do the presentation and get the listing. I also know what my out of pocket expense is to do that CMA.

    I know what my experience is worth. So what would I charge to do CMA…is it as detailed as an appraisal? Yes and do I charge more? Yes I do. Why?… because of my knowledge of the area, my working knowledge of what buyers are looking for. My years and years of experience… all add up. Can I break my experience down to a dollar value per hour…probably not. My resume speaks for itself.

    Same thing when I’m a buyer agent. I know what I charge and what I do and can clearly articulate to the buyer why they should hire me.

    Like Ann, most of my business is repeat and referrals and that says a lot. But new agents in my opinion need to be able to dollarize what they do. ..the hard part for them is the experience part. They need to be able to say here is what I do and here is why it benefits you…the “why it benefits you” is the value piece the consumer cares about.

    How much am I worth and why that benefits my clients… I need to demonstrate that.
    I would never push myself onto someone who does not value my expertise …saying “next” works for me.
    I’m far from rich and I remember once years ago I tracked a listing and in the end I made 16 cents per/hour. Yuck! I said never again. There is so much of what we do that can’t be wrapped in a pretty package…we just do it and know how to do it.

  46. Ines

    March 23, 2008 at 8:08 am

    Wade- THAT’s what I’m talking about! When you move into an area you know nothing about, it’s crucial to work w/ an agent that knows the area, the other agents, the inventory, and understands your needs. I love to hear good success stories and congratulate you for recognizing the effort.

    Ann- there are some people out there that will never hire a Realtor (and that’s ok). I compare those people to the ones that would never hire an architect and let their contractor do the designing. When all is done and the project is horrible, they realize that they shouldn’t have cut such an important step….but it was still their CHOICE

    Blue ridge rentals- I think the whole argument started about some transactions taking a lot less time than others and how you can justify the difference in pay.

    Moni- I think you have an extremely interesting concept- and like I said before, if only as an exercise, I will take the challenge.

  47. Sue

    April 19, 2008 at 3:56 pm

    I don’t cut my commission. This is a market in which we are definitely earning our commission. I usually defer discussing commission until I am done with my listing presentation. By time I’m done there is little argument. They want all the services that I offer to highlight their home and bring in the best buyer.

  48. CMR

    August 25, 2008 at 8:05 pm

    Background:
    I am in executive search;
    selling for the first time in years.

    You are correct: I’ve already heard several times agents
    will cut their commissions, what I couldn’t figure out was why?
    What’s the incentive?

    I would like to understand the communication gap, however,
    because it’s huge, and hurts everyone in the process:
    ? is it that sellers don’t want to pay the 6%, period?
    ? ?a current survey by Consumer Reports
    states a high number of agents are adjusting commission, without an impact on service.

    In my business, recession requires vast amts. of time spent to educate people,
    and “with so many candidates to choose from”, (part of the same perception),
    why shouldn’t we cut the commission?”

    When I sign on with an Agent I realize the expertise is there.
    If I network and bring in a buyer, however, am I entitled to the other 3%?
    Now that would be fun! More importantly, not
    to cheat my Agent, but to acknowledge my time bringing in a buyer…if
    that were to happen!

    There may be creative ideas that are worth consideration
    on occasion. I want repeat business too, but I’m looking for possibilities here, and always respect a professional. I sincerely look forward to comments, thanks.

    https://www.consumerreports.org/cro/money/real-estate,

  49. ines

    August 26, 2008 at 10:28 am

    CMR – you bring excellent points to this discussion and I thank you for leaving a comment. As you well know, every Realtor will treat their business differently and will have good explanations why they can or cannot cut their commission (keep in mind that a lot of the big brokerages don’t allow for agents to cut them, so a lot of times it is not even up to them).

    The reality of today’s real estate market is that we, as agents, need to be flexible and need to adapt to change. As a seller, you need to make sure that your property is exposed as much as possible and that usually means money out of the agent’s pocket which they will not get back until the property closes.

    You also need to be aware that finding the buyer is probably the easiest part of selling a home – the actual transaction management – making sure that buyer follows deadlines (inspections, loan commitments, etc) is of utmost importance. And keeping a deal alive in today’s market may be challenging.

    I was having this conversation with a colleague in Miami yesterday where we discussed how sometimes dealing with a cooperating agent that is inefficient and inept is more work than doing both sides of the transaction alone.

    You, as a seller have every right to pick was services you are looking for – but make sure you compare apples to apples.

  50. Daytona Beach Real Estate

    November 7, 2008 at 2:18 pm

    I couldn’t agree more! Real estate right now is definitely a hurting market, but it doesn’t mean that the services quality real estate agents provide are not worth commission or that just because times are hard, the work we do is any less valuable. Florida real estate is hurting, but there are still markets where real estate agents can flourish. High end luxury market, etc. Good luck to you!

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Opinion Editorials

Decision-making when between procrastination and desperation

(EDITORIAL) Sometimes making a decision in business can loom so large over us that we delay making them until it’s absolutely necessary. Why?

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decision-making between procrastination and desperation

I need to confess something to you

So, a little confession’s good for the soul, right? I feel like I need to confess something to you, dear reader, before we jump right into this article. What follows is an article that I pitched to our editor some months back, and was approved then, but I’ve had the hardest time getting started. It’s not writer’s block, per se; I’ve written scores of other articles here since then, so I can’t use that as an excuse.

It’s become a bit of a punch line around the office, too; I was asked if I was delaying the article about knowing the sweet spot in decision making between procrastination and desperation as some sort of hipster meta joke.

Which would be funny, were it to be true, but it’s not. I just became wrapped up in thinking about where this article was headed and didn’t put words to paper. Until now.

Analysis by paralysis

“Thinking about something—thinking and thinking and thinking—without having an answer is when you get analysis by paralysis,” said St. Louis Cardinals pitcher Matt Bowman, speaking to Fangraphs.

“That’s what happened… I was trying to figure out what I was doing wrong, or if I was doing anything wrong. I had no idea.” It happens to us all: the decisions we have to make in business loom so large over us, that we delay making them until it’s absolutely necessary.

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Worse still are the times that we delay them until after such a time as when making the decision no longer matters because the opportunity or market’s already moved on. So we try to find the avenues for ourselves that will give us the answers we seek, and try to use those answers in a timely fashion. Jim Kaat, the former All-Star pitcher said it well: “If you think long, you think wrong.”

Dumpster Diving in Data

In making a decision, we’re provided an opportunity to answer three basic questions: What? So what? And now what?

The data that you use to inform your decision-making process should ideally help you answer the first two of those three questions. But where do you get it from, and how much is enough?

Like many of us, I’m a collector when it comes to decision making. The more data I get to inform my decision, and the sufficient time that I invest to analyze that data, I feel helps me make a better decision.

And while that sounds prudent, and no one would suggest the other alternative of making a decision without data or analysis would be better, it can lead to the pitfall of knowing how much is enough. When looking for data sources to inform your decision-making, it’s not necessarily quantity, but an appropriate blend between quantity and quality that will be most useful.

You don’t get brownie points for wading through a ton of data of marginal quality or from the most arcane places you can find them when you’re trying to make an informed decision. The results of your ultimate decision will speak for themselves.

“Effective people,” said Jack Welch, former CEO of General Electric, “know when to stop assessing and make a tough call, even without total information.”

Great. How do I do that?

So, by what factors should you include (and more importantly, exclude) data in your decision-making?

Your specific business sector will tell you which data sources most of your competitors use already, as well as the ones that your industry disruptors use to try to gain the edge on you.

Ideally, your data sources should be timely and meaningful to you. Using overly historical data, unless you’re needing that level of support for a trend line prediction, often falls into “That’s neat, but…” land. Also, if you’re wading into data sets that you don’t understand, find ways to either improve (and thus speed) your analysis of them, or find better data sources.

While you should be aware of outliers in the data sets, don’t become so enamored of them and the stories that they may tell that you base your decision-making process around the outlier, rather than the most likely scenarios.

And don’t fall into this trap

Another trap with data analysis is the temptation to find meaning where it may not exist. Anyone who’s been through a statistics class is familiar with the axiom correlation doesn’t imply causation. But it’s oh so tempting, isn’t it? To find those patterns where no one saw them before?

There’s nothing wrong with doing your homework and finding real connections, but relying on two data points and then creating the story of their interconnectedness in the vacuum will lead you astray.

Such artificial causations are humorous to see; Tyler Vigen’s work highlights many of them.

My personal favorite is the “correlation” between the U.S. per capita consumption of cheese and people who died after becoming entangled in their bed sheets. Funny, but unrelated.

So, as you gather information, be certain that you can support your action or non-action with recent, accurate, and relevant data, and gather enough to be thorough, but not so enamored of the details that you start to drown in the collection phase.

Trust issues

For many of us, delegation is an opportunity for growth. General Robert E. Lee had many generals under his command during the American Civil War, but none was so beloved to him as Stonewall Jackson.

Upon Jackson’s death in 1863, Lee commented that Jackson had lost his left arm, but that he, Lee, had lost his right. Part of this affection for Jackson was the ability to trust that Jackson would faithfully carry out Lee’s orders. In preparing for the Battle of Chancellorsville, Jackson approached Lee with a plan for battle:

Lee, Jackson’s boss, opened the conversation: “What do you propose to do?”

Jackson, who was well prepared for the conversation based on his scout’s reports, replied. “I propose to go right around there,” tracing the line on the map between them.

“How many troops will you take?” Lee queried.

“My whole command,” said Jackson.

“What will you leave me here with?” asked Lee.

Jackson responded with the names of the divisions he was leaving behind. Lee paused for a moment, but just a moment, before replying, “Well, go ahead.”

And after three questions in the span of less than five minutes, over 30,000 men were moved towards battle.

The takeaway is that Lee trusted Jackson implicitly. It wasn’t a blind trust that Lee had; Jackson had earned it by his preparation and execution, time after time. Lee didn’t see Jackson as perfect, either. He knew the shortcomings that he had and worked to hone his talents towards making sure those shortcomings were minimized.

Making trust pay off for you

We all deserve to have people around us in the workplace that we can develop into such a trust. When making decisions, large or small, having colleagues that you can rely on to let you know the reality of the situation, provide a valuable alternative perspective, or ask questions that let you know the idea needs more deliberation are invaluable assets.

Finding and cultivating those relationships is a deliberate choice and one that needs considerable and constant investments in your human capital to keep.Click To Tweet

Chris Oberbeck at Entrepreneur identifies five keys to making that investment in trust pay off for you: make authentic connections with those in your employ and on your team, make promises to your staff sparingly, and keep every one of them that you make, set clear expectations about behaviors, communication, and output, be vulnerable enough to say “I don’t know” and professional enough to then find the right answers, and invest your trust in your employees first, so that they feel comfortable reciprocating.

Beyond developing a relationship of trust between those who work alongside you, let’s talk about trusting yourself.

For many, the paralysis of analysis comes not from their perceived lack of data, but their lack of confidence in themselves to make the right decision. “If I choose incorrectly,” they think, “it’s possible that I might ________.” Everyone’s blank is different.

For some, it’s a fear of criticism, either due or undue. For others, it’s a fear of failure and what that may mean. Even in the face of compelling research about the power of a growth mindset, in which mistakes and shortcomings can be seen as opportunities for improvement rather than labels of failure, it’s not uncommon for many of us to have those “tapes” in our head, set to autoplay upon a miscue, that remind us that we’ve failed and how that labels us.

“Risk” isn’t just a board game

An uncomfortable fact of life is that, in business, you can do everything right, and yet still fail. All of the research can come back, the trend lines of data suggest the appropriate course of action, your team can bless the decision, and you feel comfortable with it, so action is taken! And it doesn’t work at all. A perfect example of this is the abject failure of New Coke to be accepted by the consumer in 1985.

Not only was it a failure to revive lagging sales, but public outrage was so vehement that the company was forced to backtrack and recall the product from the market. Sometimes things just don’t work out the way they’re supposed to.

You have to be comfortable with your corporate and individual levels of risk when making a decision and taking action. How much risk and how much failure costs you, both in fiscal and emotional terms, is a uniquely personal decision, suited to your circumstances and your predilections. It’s also likely a varying level, too; some decisions are more critical to success and the perceptions of success than others, and will likely cause you more pause than the small decisions we make day-to-day.

In the end, success and failure hinge on the smallest of factors at times, and the temptation is to slow down the decision making process to ensure that nothing’s left to chance.

Go too slowly, however, and you’ve become the captain of a rudderless ship, left aimlessly to float, with decisions never coming, or coming far too late to meet the needs of the market, much less be innovative. Collect the information, work with your team to figure out what it means, and answer the third question of the series (the “what”) by taking action.

#TakeAction

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Opinion Editorials

Managing bipolar disorder and what I wish my employers understood

(EDITORIAL) This editorial offers a perspective on living with bipolar disorder in the workplace, giving employers insight into how to support similar team members.

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bipolar disorder

I met Jacob Martinez (Jake) a few years back at one of our offline events. He is an eager and ambitious person that always wears a smile (and seriously, it’s an infectious smile), always seeks to help people around him, and is kind and positive at every interaction.

In his most current effort to help others, Jake asked what I thought about his writing about his new bipolar disorder diagnosis, something that most people hide and pray no one discovers. But not Jake. As he dug deeper into the rabbit hole of available information, he realized there was little available discussing how this diagnosis impacts career paths, and almost nothing available to help employers to understand the nuances.

And let’s face it – there are plenty of people hiding their diagnosis, and employers that could be missing amazing talent simply for not understanding how to accommodate.

The following is about Jake’s journey with his diagnosis, how it has impacted his career, and his ideas on how hiring managers and business owners could interact with people living with bipolar disorder in a way that keeps their talents in full use on the job. This isn’t scientific and the suggestions aren’t based on some HR seminar, no, it’s meant to give you unique insight that most people don’t share – I want you to read this through Jake’s eyes. It’s a brave look into working with this challenge:


As someone who suffers from bipolar disorder, I’ve struggled to find resources that would help individuals like myself jumpstart our careers and learn to navigate working full time with a mental health disorder. Most generalized stories about mental health disorders and the workplace focus more on how things didn’t work out and not on how they started or advanced their careers.

Many give examples of individuals with mental disorders in high-ranking positions who end up leaving their specialized field to work as part-time cashiers or other less stressful and less triggering roles in order to seek a better work environment for their mental health.

I’ve also found that there is a lack of resources for employers when it comes to helping employees with mental disorders. Not many employers are prepared to do so, nor have this skill in their wheelhouse. Without this knowledge, training, and experience, how could they understand the struggles of what it’s like to work with a mental disorder and be expected to provide the necessary support to help their staff?

Many factors contribute to this being overlooked or left unaddressed, such as the stigma behind people with mental disorders in a work environment, or simply because no one knows how to talk about it. When I apply for jobs, I always ask myself “Do I put in an application that I am someone with a condition that needs reasonable accommodations? Is that even an option?” How would I even begin to ask an employer to understand what I am going through? And while I’m still figuring this out and working through what my diagnosis means for my career, I’d like to share my experience and start talking about it.

Like many young individuals, I started college bright-eyed and with a hopeful outlook. I navigated internships, jobs, and full course loads but only to exit with a mountain of debt and depression that can be best described in a meme. Many, with no prospects out of university and an average GPA, end up working menial jobs to get by, hoping for their big break.

For me, this time was spent at Torchy’s Tacos, a local Austin Texas favorite. My luck finally came through when I found a new opportunity. I thought to myself, how hard could it be to deliver packages to people? Especially in a city like Austin where anyone could make a business out of cleaning cat litter boxes. This company, I thought, was going to be my lucky break – my jumping-off point. And it was for about a year. That is until my bipolar diagnosis came in.

Suddenly dealing with bipolar disorder…

I experienced sporadic shifts between depression and hypomania. With my diagnosis came a new understanding of what my limits and strengths were. I understood that stress only made it worse but that physically moving around was the best way to cope with it. Working in a warehouse-type environment allowed me to run around, helping to melt my stress away physically.

But when it came down to job performances, some weeks were better than others.

When I did well, management would make comments like, “I like this new you,” or “whatever is happening, don’t change it.” But nothing was said when I didn’t do so well. Comments continued to dismiss the real issue that I was heading towards an uphill climb of mania. And as I climbed higher and higher, more mistakes began to happen – small ones that added up beyond anything I could control. With each and every episode of mania or depression I had, the trust I had taken time to build and cultivate slowly began to fall apart.

Then came the drop – an episode of depression so deep that it’s hard to recover from. For myself, this began as a result of multiple episodes and when several “options” were laid out on the table by my employer.

First, my employer recommended that I take Family Medical Leave Assistance (FMLA). For someone like myself who never knew what FMLA was, I didn’t know where to start and what this meant. No one told me I would not be getting paid and that I would have to use my sick and personal time off to supplement my income. As someone who has built their identity around working, taking time off felt like an attack on my identity at the time.

Subsequently, I was also told I could be released for making any mistake (no matter how small or slight), attempting to change the work culture, or requesting anything unreasonable such as requesting time off for anything other than medical. My manager also called my episodic shifts a “stunt.”

Every time he said this, I lost faith in him, and he lost trust in me.

Some of the hardest words someone with a mental disorder can hear from a manager or mentor are, “When you pulled that stunt, I can’t trust you anymore” and “we will no longer be working together if you do that again.” His words cut deep and only made each episode worse—finally leading me to turn in my two-week notice.

During my time there, none of my managers ever asked if something was wrong when warning signs showed up. They just assumed that I had already checked out and given up. I felt like a cog that was replaceable and could easily be overturned. Trust was required to help me battle my mental demons, and in this case, that trust was broken on both ends. No one came out of this on top, coping skills were not utilized as they should have, and no one reached out like they said they would.

After reflecting on this experience, here’s what I’ve learned and wished my employer did:

Trust: Trust is earned, not given as the adage goes. But for an employee living with bipolar disorder, trust is given before it is earned. I made the choice to trust my employer (and my entire team) by opening up about my mental health and battles – I had to. And while not everyone may be prepared to open up about what they’re dealing with internally, it can help.

Doing this tells people that you’re asking for help and are making yourself ready to receive it. It signifies your willingness to allow others inside. This can be beneficial to you as it helps your team members become better at recognizing warning signs and understand when to check in to see if you need help. My recommendation here to anyone working with someone who has a mental disorder: Listen if we choose to open up, don’t be dismissive of our efforts, and trust us when we ask to carry more for the team.

 

Don’t assume: Someone opening up about a diagnosis can’t expect everyone at work to have a background in psychology or psychiatry and to understand when comments like “I like this new manic you” are harmful and dismissive.

Not everyone is going to be interested in researching and learning how best to help a team member who is dealing with a mental health disorder. So, don’t assume that they know.

What would have helped me and maybe changed my situation would have been to be more honest and direct about my specific needs upfront. For employers, try to also understand our needs and limits with stress. Ask your employees directly what they need from you in order to make them feel more comfortable. Another way of tackling this would be to ask your employee about some of the coping strategies they are learning in group therapy sessions. If you know your employee is going to group therapy, if you feel comfortable with it, check in with them and encourage them to keep up with those sessions. When assigning unique projects or extra tasks, it’s also helpful to explain what you are asking and offer employees the best ways to achieve it.

 

Ask for and give reasonable accommodations: In my case, I eventually learned that taking time off was not an ‘attack on my identity’ as I had previously felt. I learned to accept it as part of living with bipolar disorder and know when to ask for it. Pushing for myself was empowering and was the best thing that could happen in that given moment.

So, if you’re someone who struggles with bipolar or other depressive mental health disorders, the best thing you can do to help yourself, while building courage and confidence, is to speak up and be your own advocate. Ask for accommodations.

For employers with a team member struggling with a mental disorder, when it comes to giving that team member time to themselves, it should never be a fight or argument. Change the schedule, do what you can to make accommodations, and support someone who needs time away for treatment.

 

Give helpful feedback: In my experience, my previous employer either avoided giving me feedback completely or made dismissive comments like, “I don’t know what the hell happened…”, followed by something positive. Like many others who suffer from bipolar disorder, ineffective and unclear communication can easily lead us to spiral from misinterpreting details and having self-doubt.

I would have benefitted from receiving clear and specific feedback, whether that was immediately after a mistake or as a conversation during team lunch. This small amount of open dialogue could have allowed us as a team to resolve conflicts, improve teamwork, help me build my self-esteem, and improve my performance.

 

Show appreciation and have open dialogues: What is equally important for employers to do is to let us know that you are paying attention to and appreciate our efforts, regardless of how small or large of a task we complete. In a warehouse, things are extremely routine, but it doesn’t take a lot to thank someone for trying.

A few small words and gestures could have been really helpful in breaking me out of a depressive funk or a manic episode and can certainly help someone else in the future.

 

Practice mindfulness: At this moment, let’s check in with our emotions. In Dialectical Behavioral Therapy (DBT Therapy), some of the questions they ask are about checking in with your emotions and your thoughts. Are you in control of your thoughts or are they in control of you? Are we still in touch with our emotions? Perhaps we are cross at ourselves for playing the victim to our mind’s frustrations?

When it comes to mental disorders, employers need to be more understanding of what their employees are going through. However, we as individuals should also be able to look inwards and see what we are feeling. Core mindfulness is a skill to develop no matter what position you work in or what you’re dealing with. Mindfulness teaches awareness of thoughts and feelings, the focus on the here and now.

From my experience, learning to control my thoughts and emotions is an effective way of dealing with my bipolar disorder. While it took time to discover, I learned that my mindfulness practice was running around the warehouse and moving. This allowed thoughts to flow in and out of my mind without having to give them any power over me. Knowing this made me feel stronger and clearer. Finding a mindfulness practice to help you cope takes time and experimenting – so try different things and figure out what works for you.

 

Ask for help: If you’re struggling with a mental disorder at work, there is nothing wrong with asking for help. That help may look differently for everyone, be it talk therapy, telling a co-worker, or taking time off. Either way, sometimes the best way to help yourself is to start asking for help. If you’re someone who has a co-worker struggling with a mental disorder, pay attention and reach out to them if they need help.

While I’m still learning to navigate my bipolar disorder, this experience has taught me (and hopefully others) some helpful lessons. I have learned to manage it better and am continuing to advance in my career path.

My hope is that companies make a more concerted effort to improve their training on mental health disorders in the workplace. I also hope that by sharing my story, I can help others with bipolar disorder to excel at work.

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Opinion Editorials

How to ask your manager for better work equipment

(EDITORIAL) Old computer slowing you down? Does it make a simple job harder? Here’s how to make a case to your manager for new equipment to improve your productivity.

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better equipment, better work

What is an employee to do when the work equipment bites.

Let’s be frank, working on old, crappy computers with inefficient applications can make the easiest tasks a chore. Yet, what do you do? You know you need better equipment to do your job efficiently, but how to ask the boss without looking like a whiner who wants to blow the department budget.

In her “Ask A Manager” column, Alison Green says an employee should ask for better equipment if it is needed. For example, the employee in her column has to attend meetings, but has no laptop and has to take a ton of notes and then transcribe them. Green says, it’s important to make the case for the benefits of having newer or updated equipment.

The key is showing a ROI. If you know a specific computer would be a decent upgrade, give your supervisor the specific model and cost, along with the expected outcomes.

In addition, it may be worth talking to someone from the IT department to see what options might be available – if you’re in a larger company.

IT professionals who commented on Green’s column made a few suggestions. Often because organizations have contracts with specific computer companies or suppliers, talking with IT about what is needed to get the job done and what options are available might make it easier to ask a manager, by saying, “I need a new computer and IT says there are a few options. Here are my three preferences.” A boss is more likely to be receptive and discuss options.

If the budget doesn’t allow for brand new equipment, there might be the option to upgrade the RAM, for example. In a “Workplace” discussion on StackExchange.com an employee explained the boss thinks if you keep a computer clean – no added applications – and maintained it will perform for years. Respondents said, it’s important to make clear the cost-benefit of purchasing updated equipment. Completing a ROI analysis to show how much more efficiently with the work be done may also be useful. Also, explaining to a boss how much might be saved in repair costs could also help an employee get the point across.

Managers may want to take note because, according to results of a Gallup survey, when employees are asked to meet a goal but not given the necessary equipment, credibility is lost.

Gallup says that workgroups that have the most effectively managed materials and equipment tend to have better customer engagement, higher productivity, better safety records and employees that are less likely to jump ship than their peers.

And, no surprise, if a boss presents equipment and says: “Here’s what you get. Deal with it,” employees are less likely to be engaged and pleased than those employees who have a supervisor who provides some improvements and goes to bat to get better equipment when needed.

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