What motivates the best real estate agents?

—Is it just money? Or is it something else?

For some excellent background to this question, take a look at this YouTube video that explains some interesting research on the topic of motivation. It runs for around 10 minutes but it’s really worth seeing (over 6 million people have already watched it!).

http://www.youtube.com/watch?v=u6XAPnuFjJc

What comes through from many studies that have been done is this: while money is part of the overall picture, it is not the strongest driver of peak performance. We’ve found this to be very true from practical experience at Whale & Co.

What we learned was this: if money is used as the main motivator, agents instinctively look for short cuts and avoid doing the important things that give customers the best experience and service—simply because these things take time and don’t offer any immediate reward. We found this applied particularly with agents getting paid on commission.

In real estate, customers need considerable service and assistance in the often lengthy period leading up to the time they want to buy or sell. They need more help then, than right at the time they’re actually doing their buying or selling. It’s this “pre-sale” service and support that makes the biggest difference to people. An agent motivated by commission will be reluctant to invest much time with customers who are still in the early pre-sale stage—because there’s no certainty of the agent earning any money from it.

The best real estate service, we believe, comes from agents who are paid salaries, not commissions, by firms that recognize two needs: (a) customers need significant pre-sale service (whether buying or selling), and (b) agents need financial peace of mind.

As the video points out, people who don’t have any financial pressure on them are then free to put their heart and soul into their work—and consequently create the best outcomes for their employers and their customers.

For all these reasons we adopted the salary model at Whale & Co—and we’re very happy with how it’s working. So are our customers!

See also our related article, “Why we pay our salespeople by salary and not by commission.”