Great question. Hiring data entry people is exactly what a number of commercial real estate firms do. The trouble is, how do the data entry people know what to enter? The person who actually has the information has to give it to the data entry person. So a number of these firms have forms and sheets that have to get filled out by the agent, which then goes to the data entry person.

Believe me when I say that something gets lost between what’s in the agent’s head and what gets put on a piece of paper and what gets entered into the system.

It’s better than nothing, but it falls far short of what is actually required. The ideal is to have the people who are gathering the information — i.e., the agents themselves — trained on data entry, including what information is important to capture, and what is not. This is, as one might imagine, difficult to do.

Tying compensation to data entry is also something that many commercial firms have tried. Trouble is, as long as compensation is dependent on a commission split, any activity that takes time away from sourcing deals and closing deals is something that agents rightfully see as a F’ing Waste of Time. The good ones will walk to a firm that doesn’t demand such things.

As I see it, the only way around the problem is to pay people for their time, not for their production. Maybe it’s a Base + Comm or Base + Bonus system, but without paying people for their time, I just don’t see how it’s possible to instill and enforce data discipline.

-rsh

Thanks Joe! You’re right of course — nothing prevents the Firm from hiring some 1099′s, so long as they recognize and agree to the deal before them.

But those splits have to be crazy low.

Someone more financially astute than I should really calculate what a brokerage pays out in agent splits and compare that to paying someone a salary + benefits.

-rsh

The tools are no longer the issue. Even the analysts and the marketers are not the real issue.

The real issue is data entry. My experience working with real estate people on trying to get them to do proper data entry teaches me that it simply ain’t gonna happen.

Institutionalization is the only way out of that.

-rsh

So much of the tools required to enact the data-side of your vision are available and not exceptionally pricey. The analysts making meaning from the data might be pricey but it should pay off.

1040 v 1099? As you point out, it need not be an either/or proposition for the Firm, which has the ability to tailor compensation. The Firm sports a finely crafted suit, while the traditional brokerage dons an off-the-rack-one-size-fits-all.