Pooled buyer list or private lists with routing? Five of us can't agree.

Question

I manage rentals for a handful of the buyers these wholesalers keep selling to, so I got dragged into this argument sideways and now I'm in it.

The group is five people, mostly part-time, three counties. They've been running on a shared spreadsheet for four months. 140-odd names, every member can pull from it, everyone adds to it. It works until it doesn't. Last month two members marketed the same contract to the same buyer eleven hours apart and one of them quoted a number $4,000 under the other. The buyer noticed. He now waits a day before responding to anything from anyone in the group because he assumes a lower number is coming.

The proposal on the table is to kill the shared sheet. Each member keeps their own buyers private. When you have a contract that doesn't fit your buyers, you post the deal to the group, and the member who owns the right relationship takes it to their buyer and splits the fee with you.

Case for the pooled list: speed. A contract with a 14 day inspection window doesn't have time for a routing conversation. Everybody can hit 140 people at once and the deal moves.

Case for private lists and routing: the buyer only ever hears one number from one person. Relationships stay intact and nobody trains their buyers to wait. Cost is a day, sometimes two, and it depends on members actually answering their phones.

There's a middle version somebody floated where the top ten buyers stay private and everyone else goes in the pool. I don't know if that survives contact with a Tuesday deadline.

What have you actually seen hold up?

dmitri_v6 · Accepted Answer

@rigging that's the fourth poll option and it fails for the same reason honor-system rules usually fail, which is that the incentive to break it peaks exactly when the deadline is closest. Your member with a contract expiring Friday at 5 will call the buyer he's told not to call, and he will be right to, because his $8,000 is on the line and the etiquette rule is worth nothing to him.

Private lists with routing is the version I'd write, and I'd write it, not agree to it verbally. Three things need to be on paper before it means anything. First, what a "deal posted to the group" is, with a timestamp, because the split fight is always about who saw it first. Second, the split percentage fixed in advance rather than negotiated per deal, since per-deal negotiation is where a two-day routing delay turns into a five-day one. Third, an escape hatch: if the relationship owner hasn't produced a signed buyer within some stated number of days, the deal goes to the pool and the routing split drops. That last one is what makes the model survive a 14 day inspection period, and without it @trellis is right that the hybrid dies on a Tuesday.

On the compliance side, be careful how the group describes itself in writing. Marketing another person's contract to buyers for a share of the fee can look like brokerage activity depending on your state, and licensing triggers for that vary a lot state to state. Get the arrangement in front of a real estate attorney in each state you operate in before the five of you sign anything.

The $4,000 discrepancy was a symptom. Two people with authority to quote the same asset to the same buyer will eventually quote different numbers no matter how nice they are.

karen_whitfield · Answer

The buyer waiting a day is the part that should worry you more than the $4,000. You taught him something and he learned it. That's slow to undo.

I've bought land from small groups twice and both times what made me pick up the phone was that the same person always called me and always knew what I'd said no to last time. Pooled lists produce strangers pitching me alfalfa acreage because my name is in a column. I stopped answering one of those groups entirely.

megan_doyle15 · Answer

Genuinely asking, why can't the shared sheet just have a column that says who owns the relationship and a rule that you check it before you call? Seems cheaper than rebuilding five separate lists.

tashaford30 · Answer

@warrant the escape hatch is the part I hadn't thought about and it makes the private-list version actually work. Voted for routing.

One thing I'd add for @trellis: whoever owns the relationship should be the one who tells the buyer the group exists. Right now he found out by being double-quoted, which is the worst possible way to learn it.

Pooled buyer list or private lists with routing? Five of us can't agree.

4 replies