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Contract Management is for recruiting and managing of offers and contracts to leverage time of agent.

Overview
As you grow and handle more deals, more and more of your time and emotional energy is consumed by handling offers and contract negotiation. For most agents, contract negotiation is one of the most critical skills and roles that they play. However, as the volume grows to 50-100 or more deals per year, it is better to delegate some of the contract management.

Recruiting for Contract Manager
The following are goals of having part-time Contract Manager:
  • The goal is to free up 1-3 hours of time per deal to delegate to Contract Manager.
  • The emotional ups and downs and the pressure to be sure to be fast and responsive causes additional stress for the agent. Anything that can be delegated and managed more smoothly will reduce emotional wear and tear on the agent.
  • Most deals happen over 1-3 days of calendar time but split into small chunks.
  • If template contract requirements can be handled by Contract Manager, then work can flow without having to pause to deal with contracts.
  • If you have two part-time Contract Managers, then you can likely have one of them available when a deal pops and they can cover seven days a week as needed.

Summary from Client using Contract Managers
This is summary from someone who is currently using the Billion Dollar Agent concept of Contract Managers:
We are paying $35 per hour and not using a checklist. I send them the contact info for the client and a copy of the documents and some basic info about the situation and people. They call the client and set up the appt to present the documents (listing or buyer) most often over the phone and internet and occasionally at the office. This frees up my time of at least 30 minutes for buyer agency and then 2 hours usually for a buyer contract and all disclosures. The listing contract usually only take about 30-45 minutes.


There is another hour that that involves an unlicensed assistant the prepares the contract documents. I have 3 people trained and available to set these up. I have a template for our contracts that tells them exactly what to do for each situation. I then review the documents and make any minor changes before it goes to the client and Contract Manager. That only involves about 20 minutes of my time and can be done on my phone if needed with very limited stress.

The major benefit is saving the emotional wear and tear is worth $100 per hour to me. I am only paying $35/hour and not having to take time out of my day or vacation when I can be doing something far more productive than what I consider to be a high level clerical task.

Job Postings for Contract Manager
These job postings can be shared with agents in your brokerage, or agents you know well who may be looking for extra work.
Change the pay rate to what is decided to offer. We suggest $30/hour to start and increase to $35-40/hour after X deals completed or if the person is very good.

  • Seeking part-time Contract Manager for offers/negotiations
    • Busy team seeks part-time Contract Manager to help with preparing and responding to offers and helping with contract negotiation.
    • The goal is to cover 1-5 hours of time per deal helping to draft contracts, review contracts, convey negotiation issues and get a deal under contract.
    • The person will not be on the team, but will continue to do their own business. This is a part-time job with expectations of 1-3 deals per week.
    • Pay is $XX/hour paid monthly as independent contractor.


Contract Management Discussion
Click link to listen to a recording between Steve Kantor and Vicki Westapher of Remax Properties regarding Contract Management.

Transcript of Steve and Vicki about Contract Management
THIS IS UNEDITED - 4/24/13

Steve Kantor and Westapher Contract Management Transcription

SK: Hi, this is Steve Kantor with Best Agent Business, the author of Billion Dollar Agent, and I am super excited to have with me my sister, Vicki Westapher. Vicki, can you introduce yourself and where you’re located?

VW: Yes, I am, um a realtor in Colorado Springs with Remax Properties, and I’ve been a realtor here for 17 years now and am one of the top realtors in the area.

SK: Got it. So, Vicki and I go way back, in fact, uh she’s my older sister and uh we roomed together until she was about thirteen and I was probably around 5-6 years old until we moved into a second house, and we grew up in San Diego. She lives in Colorado Springs now, and I live in Bethesda, Maryland. And we’re both entrepreneurs. When I had my software business, I went with Vicki to a Brian Matheny(sp) conference maybe back in early 2000. Loved that and when I started my new business back in 2005, I partly chose real estate because I thought Vicki had some interesting ideas about how to run the business. Over the last six or seven years, she’s continued to grow. She runs one of the most profitable teams of her size that I know of, and we trade ideas back and forth along the lines of the Billion Dollar Agent model. You’re gonna hear a few of them right now. So, Vicki, um, one thing that you’ve automated pretty well, and gotten off your plate, is the buyer’s side of the business. So, if I understand correctly, you put about what 500,000, 550 GCI last year?

VW: No, I did a little over 600.

SK: Okay, 600,000 GCI, and about how many buyer sides was that?

VW: Uh, that, oh offhand I would say that it was probably around, um, 25 buyer sides that I personally handled.

SK: Okay, what do you mean “you personally”? There’s nobody else.

VW: Well, personally, rather than referred out.

SK: Got it. Okay, so actually of your six...

VW: ...because that’s part of my business model.

SK: Right, so of your 600,000, how much of it did you get from referral income probably?

VW: Uh, last year it was a little bit on the low side. We did almost 90,000 in income.

SK: Okay, so, everybody listening, she did 600,000 GCI. She did 90,000 in referral income. You probably wanna know why? I’m not gonna tell you. It’s a secret. You gotta email me at sales@bestagentbusiness.com. That’s a whole separate story, but of the buyer sides she did, right?

VW: ah hmmm.

SK: Did you show any buyers or did you...

VW: No.

SK: Have people show ‘em?

VW: I it it. I may have shown a maximum of three houses last year.

SK: Okay. Fine. Do you have a buyer’s agent or are you a solo agent?

VW: I’m a solo agent. I have no buyer’s agents.

SK: Okay, follow carefully, everybody. You have no buyer’s agent. You’re solo bought, solo agent, but you didn’t show the buyers. How many staff, part time or full time, do you have currently?

VW: I currently believe I have somewhere between 18 and 20 staff members. All...

SK: Okay.

VW: ...of which are part time. Except...

SK: Correct.

VW: ...for one full time...

SK: So, she...

VW: ...assistant.

SK: She’s got 18 or 20. So who calls used Tiger Leads which is like Boomtown, Commission Link, etc.? Who calls the leads?

VW: I have three dedicated part-time lead callers.

SK: Okay. Great. We call lead callers the same as ISA’s.

VW: Correct.

SK: Who shows the properties?

VW: Um, I’ve got about 10 trained and available showing agents.

SK: Great.

VW: Those are agents that are in my company who are working for me as needed, when available, strictly to show property, nothing else.

SK: Okay, so we’ve got the calling off your plate. We’ve got the showing off your plate. Correct? And if...

VW: Yes.

SK: ...I am correct, you have actually gone to closings for your buyers, and you had never met them until you got to the closing table. Right?

VW: Well, yes that’s true but even moreso there have been times where I have not only never met the buyer, but I have never seen the property.

SK: Correct, correct.

VW: Until the day of closing when we did the walk through.

SK: So this is the beauty of the showing agent model. Vicki using the Billion Dollar Agent model pays out about $500 per deal for showing agents while other teams who are right next to her in her office are paying out $3,000 for 50/50 split. It makes for a huge difference in profitability. My guess is Vicky made an extra 100-150,000 net profit by having a showing agent model and having zero buyer’s agents. Is that a reasonable statement, Vicki?

VW: At least, yes.

SK: Got it. Okay. So the issue is we’ve got to get more off her plate. Basically for five or six years we talk. I say you gotta delegate more. You gotta delegate more. She delegates a little bit. I say you gotta delegate and get that off your plate. Vicki tells me, “Oh, I could never delegate that.”

VW: (chuckles)

SK: And what we’re talking about now is a piece of it. Meaning 3,4,5 years ago, doing the contracts, contract management, you gotta get it off that plate. She said, “Oh, no, I could never get that off my plate.” Well, a year ago she finally got it off her plate. So, explain the concept of what we came up with of having part-time contract managers.

VW: Well, the idea is that I, as with everything else in my business to this point that I delegated, I took the part of it that really feels like it is much more high-level clerical work, and I took licensed agents and trained them to know how I want things presented. They all know how to present a contract to a buyer or a seller and explain that contract, but there are certain things that I normally put into my contracts that I wanted them to be able to explain, ah, clearly the way I normally would. So, I took them, brought them in, trained them to do that. I already have a few different inside staff members who are available to draft the contract documents for me using a template format. I still review them, but these people also have been the contract managers, also been trained to review them, and then once it’s been reviewed the contract manager gets in touch with the buyer or seller and arranges to have a meeting to review those documents. And that meeting 9 times out of 10 is on the computer over the phone, not in the office. Occasionally, we’ll have somebody that needs to come into the office and meet with them face-to-face, but usually they can do it at a time that is convenient to everybody just over the phone and on the computer since all of the documents are e-contracts now. Once they’ve finished their job and everything is signed, then usually I come back into place. And I take over in terms of negotiating with the listing agent, sellers, if it is a buyer’s side, um, if we are doing a buyer contract, until we get under contract. And then I use a transaction coordinator to help me manage all of the communication, um, from contract to close.

SK: Okay, so, a key point I wanna point out is that the stuff she got off her plate was a combination of assistant work and higher level contract management work. The assistant work she’s paying $15-$20 an hour. On the front end, the assistants are helping her prepare the contract documents just like they prepare listing agreements and stuff like that, and on the back end, the assistants are doing the closing work. We call it closing management. Vicki calls it transaction coordination. The high level stuff, you’re paying the contract managers how much currently, Vicki?

VW: I’m paying them $35 an hour, and it rarely...

SK: Great.

VW: ...rarely takes them more than two hours presenting a buyer's contract including all of the multiple disclosures that are needed.

SK: Okay, so $35 an hour, I’m fine with that. I’d suggest that that’s a $30 to $40 an hour function. Right? Now, on the buyer’s side, am I correct the buyer’s side you save a bit more time than the seller’s side. Is that right? Buyers a little bit more complicated....

VW: Yes.

SK: ...to do?

VW: It’s a little more...

SK: Okay.

VW: ...time consuming, correct.

SK: Okay. But the buyer’s side itself, it’s not like it’s a lot of hours. I mean, how many total hours of labor time do you think you’ve gotten off your, compared to a year or two ago for each buyer deal, you’ve gotten off your plate? The assistant with the contract documents and the contract manager--about how many hours per buyer’s side?

VW: Um, probably a total of an average of three hours.

SK: Okay.

VW: It’s not a lot of hours.

SK: Got it, but follow my logic everybody. This is important. About how many total buyer’s sides did you do. You told me you only did 25 buyer’s sides?

VW: Probably about 25. I did a total of 54 total transactions last year, and, um, just slightly over half were listings. So that would, it’s probably around 25. I don’t have it off the top of my head.

SK: Okay, fine. So, the number of hours is not that much. Three times twenty-five is seventy-five hours. But what I feel is the emotional wear and tear which is even the larger savings, if that makes sense. So, these deals, this part of the process, does this happen like within 24 hours, within 2 days, 3 days? What’s typical...

VW: Normally within...

SK: ...from start to finish?

VW: Normally within 24 hours, and that is the key. It isn’t the money. It isn’t the hours. It’s the complete wear and tear on you mentally. While they’re presenting an offer which I consider to be very, um, tedious-type work, I can be out meeting a new buyer or talking to a new seller and doing a new listing presentation that’s much more productive and is income-producing time rather than what I consider to be clerical time, even though it absolutely must be taken care of.

SK: Got it. Got it. So, it’s also the, in my mind, it’s also the interruptions, right? Might mean that that interruption...

VW: Absolutely.

SK: ...having to break your routine, even though it may have taken you 10 to 15 minutes. It really sucked down a half hour to an hour of your mental focus. Right?

VW: Absolutely, and depending on what I was doing at the time, it may create chaos for me in terms of completing something else of real value.

SK: Okay, so right now we figure your time is worth about how much would you say?

VW: I haven’t really thought about it.

SK: It sounds like about 150 an hour from what I know about your numbers.

VW: Minimum, minimum, yuh.

SK: Okay, so those three hours I’m gonna estimate that relevant. Three hours was really maybe five hours, okay, that you’re saving because of the wear and tear times twenty-five is, you know, a hundred plus hours etc., and basically by eliminating the wear and tear it not only saves you time and money it allows you to do more deals with less stress basically. Right?

VW: Correct, exactly. That is the biggest piece of the puzzle.

SK: Okay, so hopefully, that makes sense to everybody. The question is at what point do you do that? It’s when you are feeling that the contract management stuff is holding you back from doing more things that you enjoy doing more. Such as going on another listing appointment, meeting with somebody, doing a buyer consult etc. Now, interestingly, Vicki is still doing contract negotiation, and I will predict that two years from now Vicki will no longer be doing contract negotiations because that is not a high-value task. Most everybody listening is gonna disagree with me. Right? And Vicki may disagree with me right now.

VW: (laughs) It is a high-value task. It just isn’t going to be a requirement, and I absolutely agree with you that in two years I will not be doing it. I already have...

SK: Right.

VW: ...the wheels in place to make that happen.

SK: Okay, and let, let, let me sort of make my slight argument. So you did maybe 50 deals. Right? So...

VW: Yes.

SK: ...of the fifty. First of all, my view is that every deal crashes and burns a few times before it completes, and if it runs smoothly that’s just like a miracle. So of the 50 deals.

VW: Mmmm, (chuckles)

SK: How many do you think...

VW: Not mine, but that’s okay.

SK: But, but look forward two years, you get the contract negotiation thing off your plate, which is huge stress. Right? And of those 50 deals, probably how many would have actually moved forward smoothly without you having to be involved, if you had solid contract negotiators? I think there’s some that would still kick back to you of real problems to solve, but how many do you think would have actually flowed?

VW: A good 75% of them.

SK: Okay, so here’s something we’ve never discussed. There’s two different. We’re, we’re breaking down contract management into separate functions. What you consider contract negotiations, I wanna break into two separate functions. One is contract negotiation, and the other which, is what I’ll call problem solving. Okay? Your real value ultimately is creativity and deep experience with hundreds of deals and knowing how to crack a very difficult nut. Does that make sense?

VW: Correct.

SK: Those, those...

VW: Correct.

SK: There’s 10 deals.

VW: That’s where my value is.

SK: There’s something twisted and with many other agents the deal would have crashed and burned, but you figured out the solution. And I know from my interviews with other top agents is that’s a huge part of their value. Is they can, they can move forward either emotionally buyer seller side or keep the deal in play and get to closing.

VW: Um, hum.

SK: What’s your thoughts on that?

VW: Absolutely. In fact when I discuss this with my new clients and how many people are going to be involved, I explain to them I am reserving my time with them for the things I bring the most value to the table for, and it’s problem solving, yes.

SK: Got it.

VW: Problem solving and getting them through my experience through the transaction smoothly.

SK: Okay, I wanna wrap up by you pay your showing agents $25 an hour, correct?

VW: I do.

SK: So, I,I, I. That’s okay, but I recommend, in most markets $20, some markets $15, maybe if someone has been with you a while $25. Um, to summarize now and wrap up, please note that, if you ask most real estate agents what’s the most valuable three things you do, right, in your business. I believe one of them is, they’re gonna say, buy [END OF RECORDING]