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Paid at closing?
I know it has been brought up as an option, but has anyone actually done a tour with the understanding that you'll get paid upon closing (at a hefty tariff)? I just finished a job for a broker who liked the idea of putting off payment until closing, with the understanding that his final video price would be triple. Of course you would have to draw up a contract, and be prepared to get stiffed. My thoughts are that if you trust the broker, get a contract, and include the stipulation that as soon as they renig, ALL of their video tours get shut down, that it may work. In my particular situation, I'm thinking of offering the deal to this one broker (whom I trust, but will still get a contract). And I'll only offer this deal on homes within a close radius of my home. He currently has listing all over the place. If I'm driving 45 minutes for no money till closing, or worse yet, no money if the listing is lost, it could get expensive. I'm a true beleiver that if you want to make a big splash, you've gotta take a chance here and there. Although there is a fine line between a big splash, and a big splat! Thoughts? Comments?
But!!!! Sometimes you won't know if it's a splash or a splat until you go for it?!?! I'm very analytical, but being an entrepreneur, I'm starting to realize I need to step outside that zone in order to move forward in business. Thanks for putting it that way, Hal... I may even begin to consider toying with this idea...
I've had (literally) about 3 customers who actually even told me that something has closed! I hear about it second hand, read about it on Facebook or hear about it 6 months later.. maybe.
When I get free time I actually hunt listings down on the MLS and see if they're still active or not... then remove them. Otherwise my server would burst with old listings!
I can't imagine me actually having to depend on an agent to let me know when something closes so I could get paid! I understand the concept behind that idea, but I can't imagine that would be a sustainable business model - I'd spend all my time chasing down agents!
If you're going to do something creative in regards to payment, I like to suggest to agents that they SPLIT the cost with the seller... or let the seller pay for it and then get reimbursed by the agent upon closing.
Why? Most importantly, I get paid NOW. Secondly, sellers generally 'get' video far more than realtors do! They understand the value of it, therefore very often they will go for something like this more often than you would think. They DO want to sell their house!
This way everyone wins. I get paid. The agent doesn't have to come up with the entire amount up front. And if they reimburse the seller upon closing, they don't have to incur any expenses until they get paid.
Heck.. I was just (nicely) told by a client that I neglected to invoice her for 2 tours/ photos (about $900!) from several months ago. So I have a hard enough time remembering to invoice people up front, let alone chase after them months later if/ when they close the deal!
Fred has a good point! But, there are other business plans that can work quite well for you. I do many transactions where I get paid from the closing, and I get 3.00 per thousand of the sold price per video under this plan. (A good way to appreciate a fee plan like this is to calculate the bottom line, so get a prospective agent to get you the "Sold" price of the avg property in your area and multiply that by .003)
Being a 20 plus year vet in real estate has taught me much about the disbursement process in the real estate closings. So, I have NO problems getting paid or keeping up with my transactions. I would be happy to explain how anyone can do this but honestly, it would be easier for me to talk about how this process can work really well for you. Contact me if you would like a different prospective.
A surveyor once told a client who wanted to pay after the closing, "My services are not contingent upon the deal closing". That same philosophy should be applied to Video Tours as well. Do not sell yourself short fellow videographers, show them the value of your product and show them how it will help build their brand and business...and then you will not have to get creative to get "paid", they will write you a check on the spot.
In Fort Wayne, IN we cannot command a $250-350 Video Tour. Realtors are just now getting aquainted with "Virtual Tours" 'round these parts, and they are only paying $30-50 per month for unlimited tours. We are going to start offering a "HD Hosted Tour" later this month and hope to charge $199 per tour.
Why is it that the seller knows more about the benefit of video more than the Realtor? I am not a big fan of getting paid out of closing. I just invoice them and give them a Net 30 Term. I do have a couple overdue invoices out there though. One thing I am starting to do now is tell newbies I will design their own custom YouTube channel (with a branded Photo Shop background) that they can send their clients to. Simple enough for me to do and they can brag all about it, which they should, they are on the cutting edge of RE. When I design the channel I only select Favorites to be displayed in their feed. Then I Favorite their video from my YouTube channel. This way it keeps the viewership universal among the different channels. But here is the big kicker in my theory. At first they are thinking WOW, this is neat. Then after a couple calls generated from that video they are thinking, hey this is cool, but I only have 1 video on my new and clever YouTube channel. Next thing you know they are calling me up.
The only way a pay on contingency will work is if you can set up a system with the company that a check will get cut to you automatically at closing for the agreed upon fee. Having to research or rely on the client to find out if a property sold would be a nightmare.
Paid at closing is a terrible idea, unless you can afford to hire a collections person..forget it. You don't want to waste your time or energy on chasing debts from old business, you need to be focusing on new business. I've said it before, and I'll say it again, the biggest problem in real estate is that agents do not yet know how to use the Internet as a sales tool. Thus, they don't understand the how/why they should be doing things. The only reason to list something online..is to sell it, any other reason is a waste of time.
Tourflix mentioned value, and nothing is further from the truth. Here's a link to a sales trainer that I've learned a lot from explaining value/price. Video
I can see the "Big risk big reward" thought that is behind the original writer's comment. We all work on a wide spectrum of project size etc., so what fails for a bigger volume guy like Fred L may well be a "good enough" idea for a smaller volume or smaller market producer to try. There are no absolutes in any marketplace. Everyone's mileage may vary. For example, my 8th grader goes to school with another kid whose mother is an RE agent. So doing something with her seems a bit mroe palatable to me, if only becasue I know her and our kids know each other, so the "no pay" thing is harder to do because she sees me at least weekly. However, if she loses the listing then I still lose. In this case, working directly with the seller has some appeal because if they yank the listing or it expires, they carry the video with them onto their next agent. Or at least that is how I would work it.
To me, the important big picture concept here is that as video becomes mainstream it will lose value. This is an age old problem. As a high value specialty, with all of its inherent features, evolves into a mature product with widespread use, understanding and consumption, it becomes a lower value but higher volume COMMODITY with all of its inherent problems.
Video is becoming a commodity. That means it WILL LOSE VALUE. Broadly stated, as producers we should all know that lower pay is going to be our reward with each new viewer, user, and fan. The only way to avoid this commoditization problem is to evolve back up into the next specialty.
Jeff
There is a very clear difference between a commissioned salesperson and a service provider.
A salesperson on commission incurs more risk (and higher reward) and knows that they only get paid if a certain action/purchase takes place down the road. A service provider, be it a hairdresser, plumber or videographer provides a service that results in a physical product the buyer then possesses.
As a videographer, I have provided a physical product that took time, effort and skill. Whether an agent ever sells their listing or not has no bearing on whether I provided them with a product or not. I make you a Video Tour, I get paid.