There’s always something to howl about.

Why a flat fee for buyer representation? Because the money is in the meter drop . . .

Many years ago, I read the first couple of chapters from a book by an investment guru — “How Dilberts like you made me rich” or something like that. I must have seen it while I was staying with someone, because, as you might guess, I don’t have a huge store of respect for that kind of book.

But the first chapter, at least, was interesting. The author was talking about his youthful experience as a taxi driver, how he discovered that every other driver’s ideal — the long trip out to the suburbs — was in fact a money-losing proposition. His epiphany was that the real profit in driving a cab came from dropping the meter arm, and the more times he could do that — the more short trips he could make, in other words — the more money he would make.

When I started thinking about moving our compensation for buyer representation to a flat fee, I went through my own sales for last year. I had a great year, as did every agent with a pulse in Phoenix. I sold some very expensive houses — although Cathy landed my ultimate prize when she showed for me one day when I had a class. But I did many less expensive homes, along with some work that I did for no compensation at all. At the end of the year, I netted out to $7,638 a side. Not great, not awful.

But you can look at $7,638 as my gross value “per trip,” in taxicab terms. My belief is that, with the right marketing, engineering and support, I can do at least five times as many trips, and possibly more than that. I believe that one good agent, properly supported, should be able to sell 300 buyers a year, maybe many more. And, incidentally, throw off a lot of listings and referrals.

I did rentals when I was first licensed. I knew I needed experience, and I wanted it fast. New residential agents can starve for months, but I made money in my first week. It was lousy money, but the demand was unlimited, so it was easy to engineer it to be better money. I split my day into six 90-minute appointment slots, and my goal was to work with six parties a day. The best month I ever had, August of 2001, I closed on 30 leases for around $6,000. The money seems absurd by now, but the production was and is much to be desired.

The point of all this is that I think the money is in the meter drop. I want to do a lot of short trips, and I’m willing to pay a premium to well-prepared clients to bring me their business.

Can you say “smart”? Can you say experienced, integrity, strong negotiation skills, family values, sports hero, beauty queen? The question is, what can you say that 30,000 other agents aren’t also saying?

What I’m doing — and I may crash and burn at it — is giving a certain type of buyer an incentive to prefer my taxi to all those others out there. I could be giving up $25,000 that I might have earned on a million-dollar home. But, instead, I could make $5,000 while other agents make nothing, because that buyer came to me and not to them. And, as a bonus, I have a shot at the listing on that buyer’s current $800,000 house.

I like our business the way it is now. We make good money, and I know we’ll make better money year-by-year. But there is no limit to how big I can grow this business if we take a different approach.

This is not about discounting. This is about turning a poor way of marketing a personal service business into a better way of marketing a personal service business…

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