Affiliate sales in local and regional markets. The experience of the founder of the AVENTIN Group, Corp.
Affiliate sales is a system of interaction between real estate agents, in which a buyer's request can be transferred to a realtor from another company for a fee.
Despite the fact that affiliate sales are currently in great demand in the United States and in the West, in the CIS countries only a few large companies practice such transactions. In the AVENTIN Group, Corp., more than 50% of transactions are affiliate-based.
Valery Vinogradov, co-founder of the AVENTIN Group, Corp., vice-president of Russian Realtor Guild, public figure, lawyer and business coach, spoke to us in detail about how the system functions and why it should be used by any modern realtor.
Affiliate sales in different regions of the Russian Federation
As the experience of the AVENTIN Group, Corp. shows, the number of affiliate deals depends on the specifics of the region. For example, in Sochi 60-70% of all sales are partnership-based. After the closure of the borders, residents of the Russian Federation began to actively buy properties by the sea. For this reason, buyers from all regions of Russia have become interested in Sochi real estate. Among the inhabitants of the North (Tyumen, Novosibirsk, Murmansk, etc.) there is a great demand for residential properties, while Muscovites mainly purchase properties for investment.
In St. Petersburg, affiliate sales account for 35-40% of the total. In Moscow — about 50%. Most of the deals are closed with those clients who have previously contacted the agency or have received good recommendations from other buyers.
Affiliate deal Process
There is a misconception among some realtors that, even in an affiliate deal, most of the work is done by one agent. According to Valery, this understanding is incorrect. Affiliate sales involve the close interaction of all parties to the transaction.
The stages of the process are as follows:
- the buyer turns to the realtor with a request to find real estate in a region in which the agency has no properties;
- the employee sends the application to the director of the company;
- the director contacts a partner;
- the manager of the partner agency contacts the buyer and, on the basis of the conversation, determines which of his employees will «lead» the client;
- the realtor, along with the buyer, explore the best options;
- a sales contract is drawn up;
- the commission received is distributed between the two agencies.
Despite the fact that there are a few more steps in such transactions than in ordinary ones, the process does not become more laborious. In some cases, affiliate sales can help you avoid high marketing and customer acquisition costs.
How the parties to the transaction are protected
Many countries have laws on real estate activities. In the Russian Federation there is no such law at the moment — real estate activity is regulated by the Civil Code and all other regulations at the federal and local levels.
The RRG has a register that lists professional realtors who have passed certification and received all the necessary licenses. If any agent from this list violates the rules or turns out to be incompetent, he or she is excluded from the database.
«Interregional partnership is a partnership not of realtors, but of the top officials of the company.»
When a client is handed over to the AVENTIN Group, Corp., the agency staff will find out about their needs, appoint a responsible person and accompany the buyer at all stages of the transaction. A client who buys real estate on a partnership basis does not experience any discomfort: each client receives additional protection, cooperates only with experienced professionals with a good reputation and, most importantly, does not incur additional costs.
Distribution of remuneration
All details of the partnership deal must be clearly spelled out in the contract, including the percentage of remuneration. Valery believes that the size of the commission should be fixed. Aventine has a single principle of partner sales: the remuneration is 33% of the total commission. The agency guarantees the quality of services: only the best employees are engaged in such transactions, since poor performance of one of the parties can ruin the reputation of both.
In some cases, the amount of remuneration can reach 50% of the total commission. For example, when an employee of a partner company accompanies a client at all stages of a transaction. Similar conditions are negotiated for the sale of large commercial properties. In such cases, it is not called a «handover» of the client, but a collaboration. Partnership deals with companies from abroad (Canada, USA, etc.) are also accompanied by a fifty percent remuneration: the agency commission in these countries is higher.
Tips and tricks
Valery Vinogradov advises everyone who wants to reach heights in the real estate industry:
- to constantly learn and establish contacts with both partners and clients;
- not to be greedy;
- not be afraid to ask questions and contact partners;
- to provide quality service;
- to take part in major professional events.
Valery notes that all partners are connected with each other and they have a good opportunity to get to know each other better at events such as the «Housing Congress», «Congress of the RRG», etc. The most important thing is to retain your human dignity in any situation.