Opinion Editorials

I Hate Business Expenses, But …

I love cost of sale.

Our business is run as lean as possible (to yield the most possible profits…) and one way that we do this is by making MOST of our “business expenses” actually “costs of sale” … meaning that if for some crazy reason a deal doesn’t close, we only pay out a wee bit o’cash.

Often, we get asked how our team “works” … so here is a breakdown of how WE (currently) use “Cost of Sale” in our “Rock Star” real estate team:

Our Team

Buyer Agents: They only get a check if they make the deal happen. Motivation to work hard to make things Rock and Roll.

Listing Manager: Small “fixed” expense for each listing that gets initiated, and a percentage of the commission when the listing sells. Motivation to aggressively price and promote our listings.

Short Sale Advocate: Small monthly salary and “dain bramage fansaction trees” for each deal closed. Motivation to schmooze the banks and get these puppies CLOSED.

Lead Coordinator: Paid purely at time of successful close. Motivation to keep Buyer Agents accountable throughout the entire process.

Transaction Coordinator: Paid purely at time of successful close. Motivation to NOT let a contract fall apart.

We believe that we have some of the BEST talent in the local industry  – super motivated, productive, successful (and held accountable). … and one of the reasons that they ARE so awesome is because they are nicely rewarded … but they EARN it, just like we do … at time of close.

I love cost of sale.



  1. Craig Ernst

    November 21, 2008 at 5:16 pm


    This is a great example of the smart way to run any business. In terms of total expenses, minimize your fixed expenses and maximize your variable expenses (those tied to actual increases in revenue and production).

    So many businesses (and agents!) go broke because their fixed expenses are too high or even out of control. And too many agents don’t even understand the difference between the two types of expenses.


  2. Jim Gatos

    November 22, 2008 at 4:58 am

    I hope your transaction coordinator is a licensed agent.. So many aren’t and they should be on straight salary, otherwise it’s illegal…

  3. Mariana the Wagner

    November 22, 2008 at 8:23 am

    Craig – Thank you. We spent plenty of years doing thing the other way.

    Jim – Yes she is, but another way around that is if the TC is an Independent contractor and doing TC work for more than one team/agent.

  4. Missy Caulk

    November 22, 2008 at 2:06 pm

    I’d love to know how you use the listing coordinator in greater detail. That will be my next step.
    Sounds like they are doing the CMA’s and meeting with the clients.

    I’d like to know how you do that and they don’t want to meet with you and Derek?

    I know it is all in explanation but what do you actually say?

  5. Mariana the Wagner

    November 22, 2008 at 4:50 pm

    Hi Missy – She is our Listing “Manager” and is in charge of all the online and offline marketing and seller contact AFTER we take the listing, all the way up to the home going under contract. She also draws up our listing contracts and disclosures and maintains the showing feedback.

    Derek and I are the ones who do the CMAs, goes to the listing appointments and negotiates all offers. At this time, we are still a very involved part of our business.

    I hope that helps clarify things…

  6. Missy Caulk

    November 22, 2008 at 5:22 pm

    Ok thanks that is pretty much what I do; although I still take the photos, I’m too picky.

  7. Paula Henry

    November 23, 2008 at 8:40 pm

    Mariana –

    Sounds like you have a great team, part of which is knowing your expenses! I too share a TC and it works great for both teams.

  8. Steve Beam

    November 23, 2008 at 10:08 pm

    Great insight. It sure helps get over the brick wall of starting a team.

    My biggest hurdle has always been worrying about payroll or over head.

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