There are some real professional owners in this business. Most of them have outstanding policies and procedures, they make sure their agents understand them, and run their company accordingly, while others lose good agents all the time to "misunderstandings."

Brokers get in the most trouble when they either:

• Don't have good, clearly-written policies.

• Don't enforce their policies.

• Don't communicate their policies.

• Don't include "policies" in their training.

• Or all of the above.

Before I got into real estate about 30 years ago, I had the wonderful opportunity to work under a retired air force colonel, Ed Stansbury, who was comptroller of the 18th Air Force at one time. Later, he retired, and worked for me in my real estate company. He's 96 years old today and still going strong. Here are some things he taught me that I use even to this day:

It is not enough to "understand." What is important is to make sure they don't "misunderstand." When we hear the statement, "It was my understanding that..." it means that someone misunderstood.

It is not enough to send a memo or to place a note on someone's desk, and assume you have communicated with that person. "Don't ever use that as an excuse," he explained. "Always follow-up to make sure, that the other person received the message and understood it."

Policy, and the procedures to implement the policy, must be in writing. "Oral policy and instructions are not worth the paper they are not written on."

If people don't trust you with their money, they won't trust you with anything else. You can make a mistake with the floor time schedule or advertising, and once its corrected the problem goes away. Not so with money issues, he said.

Most misunderstandings within a real estate office occur because the agent doesn't understand the policy, and/or the procedures in the office. Worse yet, they don't agree with a policy or procedure that they leaned about after, not before, they joined the office.

For example, commission and fee polices should be discussed in detail before the agent ever places the license. A surprise deduction from a commission can do a lot more than destroy rapport and trust. It can cause an agent to rethink the fact that maybe, they should have joined another office.

Recently, a new agent brought a "new listing" into the office and started requesting free yard signs. It turned out to be an 'open' listing. The seller said they would pay x percent if the agent sold it. The new agent didn't know the difference.

Why did this occur? Pick one.

a.) The agent should have known better.
b.) The seller should have given an exclusive listing.
c.) The agent did not know the company policy.
d.) The broker was in a bad mood that day.

Answer: c. The agent did not know the company policy.

So when is the last time you had a policy discussion, or had "policy" discussions as part of your sales training or sales meetings?

What usually happens when there is a misunderstanding between the agent and the broker? The agent either leaves, or starts thinking about leaving. Or stays with the broker, but continues to grumble about what happened.

Multiply that incident by the multiple issues that are not addressed or communicated, such as floor time requirements, commission issues, who-pays-for-what issues, and you've got a company that can't keep agents, and probably blames it on "the economy."

Fortunately, in this company, the broker decided to bite the bullet and update his policy manual and started including it in his training program.

What is so interesting, is that most independent contractor agreements signed by the agents have a clause that says the agent has read, understands and agrees with the policy manual and the fact that the broker can change it any time. Maybe most do read the manual, but if it isn't understood, it has not been communicated.

As a broker, you could take the position that you don't have time to hold their hand. True. But do you have the time to continue to replace agents, who leave because they felt underappreciated due to some policy misunderstanding?

It is easier to blame turnover on 'that's the way it is' instead of the way you run your business and treat your agents.

Try this instead:

• Make sure your policy manual is up to date and the procedures are clear and are in operation.

• When recruiting, have the prospective agent read the policy manual before they make their decision to join you.

• Ask them to write down any issues or concerns they might have so you can discuss them at that point.

• Make sure once your agents are on board, the policy manual is reviewed, with a clear review of anything to do with money: yours, theirs or the customers.

Agents can prevent misunderstandings, too. Try this, agents:

• During interviews, ask to read the policy manual. If the company doesn't have one, and you are a new agent, move on.

• Take your time reading it. Don't be intimidated. Ask any question that might come up during our review of the manual.

• Clearly understand "the money." Understanding the commission split is the easy part. The hard part is understanding, exactly, what your start-up expenses will be, and what is taken out of commission checks (E & O insurance, for example), and what you are expected to pay monthly, regardless of whether you have a sale or not (desk fees, marketing fees).

Communicating and understanding policy is, well, just good policy.

Published: April 28, 2005

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David Fletcher has been a Florida real estate condominium and new homes broker for 30 years with more than $3 billion in new construction sales. In 2008, Keller Williams Realty International named him a "Lifetime Achiever." Along the way he has chaired the Florida Homebuilders Associaiton Sales and Marketing Council, trained thousands of general agents and on-site agents to work together, and was a featured speaker at the National Association of Realtors. Recently he founded New Homes Niche, a builder-certified co-broker training system "to meet the growing trend we see in short sale buyers moving to new homes for a lot of reasons." Call David at 407 234 2349, , and visit his website.