The Community “Tip-Out”
If you have ever worked in a restaurant, you know the concept of a “tip-out”. The Wait staff collects all the tips and then shares a portion of that money with all who helped. Waiters tip busboys for clearing tables, bartenders for fast drinks and hostesses for those who are well-dressed. The tip-out is a well-worn, time-honored tradition.
Over the years, I have heard many real estate agents try to claim their fate is similar to that of a Waiter. They have to pay their Broker, pay their franchise fee, pay NAR dues, pay for E&O insurance, etc. From a financial distribution standpoint, I see their point. But, there is a HUGE difference between the Waiter and the Realtor. A Waiter tips out to the people who actually helped them earn money. A Realtor tips out to a system.
So much of the traditional 6% franchise listing fee is unnecessary and wildly inappropriate. Ask sellers, why their nest eggs should be exposed to vultures? And, no, we aren’t conflating Realtors to vultures, but whoever came up with the idea requiring home sellers to pay the buyers agent a commission certainly leaned that way. I have always marveled at the often caviler attitude many Realtors have toward their client’s “nest egg”.
That said, it got us to thinking: “who should get tipped out in a real estate transaction”? We have eliminated the agent commission, but have we forgotten anyone who was a contributing factor? In the case of Inman Park, the answer is most definitely yes!
Inman Park is a brand. A great brand. Every homeowner’s value has been increased because of the brand. Days on market for Inman Park homes last year was 22, compared to the area average of 105, because of the brand. This universally loved brand is maintained by one of Atlanta’s oldest and most respected Homeowner Associations. (Inman Park Neighborhood Association) www.InmanPark.org
If anyone deserves a tip for improving the value of Inman Park real estate, it’s the Inman Park Neighborhood Association. We also believe a real estate company should always work toward making the Community it serves a better place. That’s the reason we created the IPR Community Tip-out Program. Every IPR listing will include a $1,000 dollar Community donation, paid at closing. For detached homes, the full $1,000 will be donated to the Inman Park Neighborhood Association. For attached properties, the $1,000 donation will be split between the IPNA and the appropriate Condo Association.
The Tip-out program was created to add value to the Community at NO cost to the current residents. The money generated comes from those who have left. In this regard, the program acts as a perfect way for ex-homeowners to say: thank you. Their homes probably sold faster and for more money than most compatibles because of the Inman brand. A tip seems the right thing to do.
We also believe the Community Tip-out Program will help generate IPR adoption. This is our first year. If we are lucky enough to capture a 20% market share, after our first year, our program would generate roughly $20,000 dollars in Community-related donations. (Based on 3-year average of 100 Inman Park transactions per year)
Capture 65% market share, generate $65K in donations. Statistics like these often have a way of feeding off themselves. It should be noted, this is ongoing. Year after year, the donations will continue. By changing a dated industry, we can create a new reoccurring revenue stream for the Community that will only continue to add value to Inman Park’s property. So we ask; “what did the old real estate industry donate to Inman Park over the last decade”? I honestly have no idea. But, what could a new real estate industry donate over the next decade? It kind of depends on how open people are to change.
We should point out, we have absolutely no connection to the IPNA. We have never met or talked to anyone from the IPHA. The creation of this Program is based solely on the principals of common sense, community development and urban planning. Based on their historic track record, the IPNA has proven to be more than a capable steward for the Community.