SANTO DOMINGO – Timely commission payments play a fundamental role in the real estate agent-construction company relationship, as they contribute to the profitability of both parties. The collection and payment of commissions motivates agents as partners in property sales.
Lawyer Darnetty Lugo, a master in credit, collections and strategic negotiations, believes that the link between the construction company and the seller is crucial to the success of the real estate project, arguing that although their roles are different they complement each other when the sales process is carried out.
“This is why it is necessary for them to be able to collaborate in a coordinated manner in the marketing and management of payments effectively, without affecting the commission and incentive scheme,” he says.
When consulted by El Inmobiliario, regarding the article published yesterday, in which three real estate leaders expressed concern about non-payment of commissions by some construction companies, the specialist opined that construction companies, in addition to offering quality and competitive properties, should analyze the creation of clear collection policies or strengthen existing ones, in order to ensure that income from sales can be collected in a timely manner.
“This way, you can ensure there are no delays or non-payments, which would affect the seller's commissions, which are a direct result of their work. Proper collection management guarantees the sales cycle, allowing the transaction to be profitable for each of the parties involved,” Lugo stated.
Darnetty Lugo. (EXTERNAL SOURCE).
It highlights the role of the salesperson, as the person who connects with customers, who guides and advises them in their buying process, so their motivation is directly linked to commissions.
Situations that limit payment
The professional cited several factors that limit construction companies' ability to collect fees, which in turn leads to unpaid commissions. These include failing to analyze the client's profile and determine their creditworthiness during the financing and sales process; the lack of a signed contract, basing the business solely on trust; and a lack of open communication with the client. She affirms that commitment is essential to guaranteeing commissions.
Another aspect that Darnetty Lugo includes in the agent-builder business relationship is the lack of clarity regarding payment terms and the implications of late payments. In this regard, she advises considering aspects such as signing a real estate brokerage agreement for leases, with or without exclusivity, as well as a sales brokerage agreement that clearly outlines the rights and obligations. “Above all, ensure your commission, detailing the taxes so that it isn't reduced.”.
It is also advisable to have a clear written agreement outlining the agent's services, such as a signed commission-sharing letter if the sale is shared with another real estate agent. "It must be in writing, as a signed agreement is legally binding between the parties.".
She adds to her recommendations the importance of greater communication and transparency throughout the process to ensure a smooth relationship between both parties. “Flexibility and support are key; analyze cases involving payment difficulties, explore alternative payment options, and in the event of a penalty for failing to complete the sale, consider an incentive mechanism for the seller or a reservation.”.
Lugo emphasizes that timely management reduces the risk of defaults and could guarantee the construction company's financial flow and provide greater security to sellers, allowing the sale to be successfully completed.
The problem
Three prominent real estate leaders expressed their concern yesterday about the current situation in the real estate market with the non-payment of some commissions, calling on builders and developers to reflect on the matter and take into account the alliance that unites both sectors, as protagonists of an industry vital to the development of the country's economy.
“Many unfortunate situations are occurring because construction companies and trust companies forget that businesses have operating expenses, payroll payments, and that we are no longer just brokers or fixers; we are real estate entrepreneurs with responsibilities to the General Directorate of Internal Taxes (DGII), to telephone companies, to the Treasury, and many other commitments,” says Reyna Echenique, CEO of Echenique Group.
Xavier Lora, CEO of Xora Real Estate Consulting, understands that this is a “very delicate issue, since real estate agents are the closest allies of builders when it comes to marketing and selling projects, and it is sad to see how some development companies do not meet the stipulated payment dates.”.
