Why Join CCH?
CCH is an association of experienced & award winning property agents operating in the Winelands, Northern Suburbs of Cape Town & adjacent areas as an estate agency. CCH also allows for an affiliation of smaller independent estate agencies – working in close conjunction with CCH, sharing property information & combining selling power when it comes to marketing property, but still maintaining to a large degree their autonomy.
CCH is based on a co-operation agreement between independent associates & affiliates as well as estate agents to operate according to the guidelines of a Memorandum of Agreement as managed by regional franchise offices. Its aim is to strengthen the marketing capabilities of the member estate agents by sharing the costs of running a competitive estate agency for them at a fraction of what it will cost to run their own business on their own. CCH also provides an administrative back-up system to the agents – both in house and virtual.
Estate agents need to compare CCH with the other estate agency models in the property market in terms of:
(a) the advantages of joining CCH, &
(b) what makes CCH different to other estate agencies?
(a) Agents joining CCH gets:
1. Unparalleled commission splits from 55% up to 90% for associates or affiliates & between 50% to 65% for estate agents – according to the commission model chosen by the agent. Please contact Benhard Wiese (CCH Boland) or Etienne Labuschagne (CCH Northern Suburbs / Cape Town) for a comparative table of commission earnings which highlights the vast difference in the potential earnings of CCH members in comparison to agents at competing firms in the industry.
2. Printed marketing costs are partially covered & paid for the 55%, 65%, 70% and 80% member agents with part of the commission earned by the CCH office.
2.1 4 Types of Associates or Affiliates :
- 55% Associate
The 55% associate do not have any marketing cost – other than their personal expenses such as cell phone and transport cost. Joining or set-up cost is R608 which will include 11 CCH boards, 500 business cards, 22 steel droppers for boards, name tag, EAAB transfer fee from other agency.
Examples: Selling a property of R500 000 e.g. @ 5% gross commission generates R25 000 commission. The associate earns R13 750. Of the 40% commission (R10 000) share paid to CCH, R 750 (2 advertisements) will be available to help cover the associate's printed media advertisements. One transaction per month of R800 000 equals R40 000 commission @ 5%. Depending on the internal sales commission split relevant to the transaction – the associate could therefore earn by selling his own listing @ 55% (R 22 000) / by selling another associate’s open mandate 40% (R16 000) / by selling another associate’s sole mandate 25% (R 10 000).
If the associate would sell his own listing of R1,8 million at 7% commission, total commission will be R126 000 & the associate will earn R 69 300.
- 65% Associate
4 % of the 35% commission the 65% associates pays CCH per transaction is available to cover the marketing costs of the associate (internet coverage & printed media).The minimum monthly marketing expenses of the associate are therefore to a large extent covered if they would be able to sell one property per month.
Examples: Selling a property of R500 000 e.g. @ 5% gross commission generates R25 000 commission. The associate earns R16 250. Of the 35% commission (R8 750) share paid to CCH, 4% of the commission (R1 000) will be available to help cover the associate's printed media advertisements. One transaction per month of R800 000 = R40 000 commission @ 5% / CCH contribution of 4% = R 1 600. Depending on the sales commission split relevant to the transaction – the associate could therefore earn by selling his own listing @ 65% (R 26 000) / by selling another associate’s open mandate 52% (R20 800) / by selling another associate’s sole mandate 32,5% (R 13 000).
If the associate would sell a property of R1 million @ 5% commission, R2 000 will be available for printed marketing costs. If the associate will sell a property of R1,8 million at 7% commission, total commission will be R126 000 & the associate will earn R81 900 (CCH 4% = R 5 040 will be available in the marketing account).
- 70% Associate
4 % of the 30% commission the 70% associates pays CCH per transaction is available to cover the marketing costs of the associate (internet coverage & printed media) – for all transaction on a month to month basis. The minimum monthly marketing expenses of the associate are therefore to a large extent covered if they would be able to sell one property per month.
Examples: Selling a property of R500 000 e.g. @ 5% gross commission generates R25 000 commission. The associate earns R17 500. Of the 30% commission (R7 500) share paid to CCH, 4% of the commission (R 1 000) will be available to help cover the associate's printed media advertisements. One transaction per month of R800 000 (R40 000 commission @ 5% / CCH 4% = R 1 600. Depending on the sales commission split relevant to the transaction – the associate could therefore earn by selling his own listing @ 70% (R 28 000) / by selling another associate’s open mandate 56% (R22 400) / by selling another associate’s sole mandate 35% (R 14 000).
If the associate would sell a property of R1 million @ 5% commission, R2 000 will be available for printed marketing costs. If the associate will sell a property of R1,8 million at 7% commission, total commission will be R126 000 & the associate will earn R88 200 (CCH 4% = R 5 040 will be available in the marketing account).
2.1.4 80% Associate :
3 % of the 20% commission the 80% associates pays CCH per transaction is available to cover the marketing costs of the associate (internet coverage & printed media) – for all transaction on a month to month basis. The minimum monthly marketing expenses of the associate are therefore to a large extent covered if they would be able to sell one property per month.
Examples: Selling a property of R500 000 e.g. @ 5% gross commission generates R25 000 commission. The associates earns R20 000. Of the 20% commission (R5 000) share paid to CCH, 3 % of the commission (R 750) will be available to help cover the associate's printed media advertisements. One transaction per month of R800 000 (R40 000 commission @ 5% / CCH 3% = R 1 200 . Depending on the sales commission split relevant to the transaction – the associate could therefore earn by selling his own listing @ 80% (R 20 000) / by selling another associate’s open mandate 60% (R15 000) / by selling another associate’s sole mandate 40% (R 10 000).
If the associate would sell a property of R1 million @ 5% commission, R1500 will be available for printed marketing costs. If the associate will sell a property of R1,8 million at 7% commission, total commission will be R126 000 & the associate will earn R 108 000 (CCH 5% = R 2 700 will be available in the marketing account).
- 90% Associate :
The associate’s minimum monthly marketing expenses needs to be secured with a R4 000 deposit in the CCH marketing account. It is fully refundable in the event of the associate leaving CCH.
The associate’s monthly marketing cost (account) needs to be settled by the associate by month end. If the associate do not pay the account, it will be subtracted from the balance in the marketing account. The associate’s sales commission is payable to the CCH office on registration – to subtract the CCH share of 10%. Should the balance on the marketing account of the associate be less than R4 000, CCH will also use the sales commission to first top up the minimum balance of R4 000 in the marketing account before paying out the balance of the sales commission to the associate. Any other commission (e.g. bond commission) earned by the associate related to a property transaction, will also be paid out first to CCH – to ensure that the minimum balance of R 4 000 in the marketing account is maintained.
3. Long Term Financial Security – Investment Fund for CCH members aims toprovide the estate agent with more future financial security - providing the member an opportunity to build their own wealth. Real estate is by its very nature a “high risk & high returns” industry - not a secure long term environment in which financial & retirement planning is part of the package.
CCH implemented a savings account and ultimately an investment account for each member – into which all recruiting & loyalty commission will be deposited by CCH once the savings account reaches a balance of R16 500.
3.1 Loyalty Contribution : Complementing the savings account for the 55% to 80% associates, loyalty commission of 1% is paid by CCH of e.g. the 20% commission earned from the 80% member or from the 10% earned by the 90% associates. Half the investment fund will become available to the associate after 5 years & another half of the balance after each successive 3 year periods – for as long as the associate remains with CCH & operates according to the Memorandum of Agreement. If the associate would leave CCH before retirement (at the age of 65) for another estate agency or compete with CCH, all the funds in the investment fund will be paid out to the CCH franchisee CCH – as the investment fund is ceded to CCH. The CCH franchisee may in his sole discretion waive such cessation – e.g. when the associate would retire early for medical reasons. The savings and investment fund will also act as a security for CCH against any unsettled marketing expenses or commission owed by the associate.
In the event of the associate’s death, whilst an active member of CCH according to the Memorandum of Agreement, the investment fund will be paid out to the spouse of the associate – after any outstanding debts to CCH has been settled. The owner of CCH may also in his own discretion and according to available funds improve this financial & retirement planning package with additional products such as life or disability insurance.
3.2 Recruiting Contribution - for those associates who recruits new associates paid for with 1% (a twentieth) of the 20% commission earned by the CCH office from a 80% & 1% (+- a tenth) of the 10% earned by CCH from a 90% associate. Another 1% of the commission earned by CCH from the recruit will be paid for the first 6 months by CCH into the savings account (as part of the loyalty contribution for the mentor associate, as long as both the mentor associate and the recruited associate remain with Cape Coastal Homes. The 1% mentoring commission will from the seventh month accrue towards the CCH franchisee – unless the CCH owner request the mentor associate to remain as mentor for the recruited associate for an extended period.
An associate who retires at age 65 years will get the 1% recruiting commission for five years after his retirement – if he does not act in that period as a property or estate agent in his private capacity or as a property or estate agent for another company or estate agency. In the event of the associate’s death, the associates spouse or his estate will continue to receive commissions due for five years. The savings fund will also act as a security for CCH against any unsettled marketing expenses by the associate. The 1% will be paid out to the spouse of the associate – after any outstanding debts of the deceased associate to CCH has been settled.
4. Each associate or affiliate have total control over each transaction & can negotiate the % commission necessary to ensure a successful conclusion of each deal, The national estate agency franchises are fairly fixed on the % commission they need to charge per transaction – in order to keep their business model viable. CCH strives to grow with independent estate agents – professionals who treasures their autonomy & flourishes under the combined strength of the network provided by CCH.
5. CCH is at present the largest estate agency in the Strand & one of the largest in the Helderberg. CCH Northern Suburbs have opened an office in the Vodacom World Golf Village in the Tygerwaterfront, Durbanville, and is at present recruiting associates & affiliates as well as office agents. Member agents share property stock & marketing tools such as the internet & printed media. Our “stock” - that is the range of properties we have available, is therefore on par with the national brands…. +- 500 properties to choose from e.g. in the Strand alone. The associates have good working relationships with other property agencies in the Helderberg, Stellenbosch & Paarl as well as in the Northern Suburbs. CCH offices do not ever exclude other agencies from mandates with stifling office marketing rules – neither on warped commission sharing arrangements nor by excluding outside agencies from access to their mandates.
6. CCH has no hidden agendas to the detriment of the member agents. The CCH associates is not subject to any office rule to close his sole mandates to other agencies OR indirectly deter other agencies by enforcing an unfair commission sharing amongst them – in order to earn the maximum commission per transaction especially when they obtain well priced mandates. The broker owner do not prevent associates to close a deal below a certain % commission - penalising them by subtracting the commission the company “stand to loose” directly from the agent’s share. (Please see Commission Tricks below)
7. Allowing low cost home offices for independent agents by doing away with compulsory & expensive desk & administration fees to be subsidised by the associates or affiliates – which can be as high as about R2000 to R4 000 per month at competing models in the industry. At CCH the associates can, by running their own home offices, allocate such a burdensome & potentially cash flow crippling expense towards running an individualised media marketing campaign. This ensures that the fixed costs remains lower & gives the CCH associates & affiliates also a competitive edge when e.g. negotiating for a mandate based on commission levels.
8. Access to & sharing the cost of a Virtual Assistant / Personal Assistant. The associates have the freedom to choose how much or little assistance they receive from a travelling, qualified & computer literate assistant (most has even passed EAB exams). They literally can pay from as little as R300 per month for virtual or individual assistance for a shift in their own offices (more than sufficient to cover the basic administrative functions – setting the associate free to concentrate on income earning actions).
9. CCH internet coverage is the widest available of all companies in the area we are operating — if not in the country! All CCH members are allowed to have their own website. Each listing will be advertised on up to 47 other websites & property portals. The proof is in the Google & Yahoo pudding….see how many times you will find CCH inside the websites on the first 2 pages of the search engines. Remember, people looking for property on the internet do not search any further than the first 2 pages. There is NO other agency in the Helderberg with such a wide presence on the internet as CCH.
The average estate agency will offer you internet coverage for your listings ranging between 1 & 17 websites. They simply do not invest the same time, money & effort that CCH does into internet marketing. Our mandates are being marketed on e.g. the following websites :
www.cch.co.za , www.capecoastalhomes.com , www.property24.co.za , www.privateproperty.co.za , www.myproperty.co.za , www.g.co.za , www.msn.co.za , www.cyberagent.com , www.cyberprop.com , www.cellproperty.co.za , www.sundaytimesproperty.co.za, www.real-estate-south-africa.com , www.propertygenie.co.za , www.propertytrader.co.za , www.propertywarehouse.co.za , www.sahometraders.co.za , www.farmtraders.co.za www.saproperties.com etc. .
10. No Commission Tricks – applying an inclusive rather than exclusive marketing plan
At CCH we do not operate with a “closed agenda” about the commission.
A selling agent who indirectly excludes other selling agents or agencies with a slanted commission split (70/30 or 60/40 in favour of himself), or preventing other selling agent's clients access to his mandates for a certain period of time, is working for a company who do not have the sellers interest at heart!
CCH associates & affiliates share a very small % of their commission with the company (Cape Coastal Homes) every time they negotiate a sales agreement. Agents working with most of the companies are dependant on either the broker owner or the company – to cover their marketing costs. This dependency forces them contractually to pay between 55% to 30% of their commission to the broker owner. CCH associates do not work with such constraints or financial liabilities……they earn what they are worth as independent agents and can change their commission structure up to a 90% commission split - whenever it suits them and to mirror their cash flow!
Generating maximum commission is of more importance to dependant estate agents than marketing their mandates as effectively and widely as they can. Their business model therefore leans towards excluding indirectly or directly other estate agencies from their mandates – which can be very detrimental to their success in difficult property market situations. If the dependent estate agents do not generate a high enough % commission – they in effect earn a relatively small commission. Sometime even as low as 22% of the total commission when e.g. an outside agency provides the seller, effectively diluting their 50% of the commission even further.
At CCH we believe that it is VERY important that the seller knows as per written agreement or marketing plan EXACTLY how exclusive or inclusive the sales agent will be marketing the property vis-a-vis the rest of the selling agents in his area! The argument that the selling agent carries the burden of the marketing costs does not hold (sufficient?) water—especially in a period where the market is in a buyers phase. A CCH associate has to provide the seller with a pro forma inclusive marketing plan. Something the buyer can expect to be implemented…
11. CCH has obtained the marketing rights to 2 new developmentsto be launched during 2010 in Durbanville (an exclusive golf estate) & Stellenbosch, thus creating more opportunities for our member agents.
(b) What makes Cape Coastal Homes (CCH) different for Estate Agents?
1. The Estate Agent is more important than the Brand
Estate agents sell property & not the office, region or international headquarters of an international franchise with a strong brand. Our sole purpose is to provide the best estate agents an environment and support needed to reach whatever level of success they desire.
2. Empower & Support Agents to grow their Own businesses
CCH has been created to empower dependent estate agents to become independent agents to develop their own businesses & earn more income. CCH do not earn disproportional high commission off dependent agents whilst keeping them dependent on “the system” - creating & feeding the myth that the better agents need a brand to be successful. The CCH recruiting & mentoring program is designed towards experienced agents having a vested interest in recruiting & mentoring new members to improve their own business – as they would benefit financially from the new CCH member’s successes.
3. Persistent Service Levels = Market Presence
CCH consists of independent & professional agents practicing their trade and providing customer satisfaction in especially difficult market situations. The growing number of associates is not only creating “a brand name awareness” – CCH at the same time gained a big market share in the Strand & Helderberg and is at present recruiting agents in the rest of the Winelands & Cape Town. Every new individual agent joining in the CCH system directly benefits as a result.
4. Agent's Nett Commission Increases without high office overheads
In conventional 50/50, 60/40 or 70/30 companies, the commission split never favors the estate agent. The net commission per transaction can be as low as +-20 % - after the broker owner & the listing agent has taken their shares!
At CCH, members know exactly what their business expenses are and exactly where that money is going. CCH do not burden the associates with crippling monthly office expenses & desk fees as a means of financing new or dependent agents & covering the office’s overheads such as expensive office sites.
5. Income Increases when More Business Is Generated
With CCH, the agent's income does not just increase with a maximum commission structure, it increases because the agent generates more business. An increase in income or personal time is achieved through the increase in productivity an agent gain upon joining a system designed exclusively to benefit top-producing associates.
There is nothing more reassuring to a seller or buyer than working with a successful person—but not one that is over-worked. People want to know that you have the energy, the health, and the resources to effectively represent them. People also want to work with a real estate professional who uses proven tools and systems. CCH will equip you to deliver that reassurance to your clients. In so doing, you will find personal victories and a more balanced quality of life.
This is the most powerful aspect of the CCH Concept.
There are five core causes behind an agent's productivity increase when joining CCH. The move to CCH brings an increase in business because:
5.1 All features and benefits of CCH association or affiliation exist to increase agent productivity.
5.2 CCH Associates are “in business for themselves not by themselves”. CCH associates have maximum control over their business, and report only to their clients….not to the broker owner! The combined effort of all the associates working together within the virtual office system of CCH, strengthens the agent’s own business.
5.3 CCH associates get all their own sign or advertisement leads. When a customer makes a call from a sign, an advertisement or other marketing material, the CCH system connects the call directly to the agent paying for the advertisement or promotion that generates the call. The associates even have their own personal websites! CCH encourages the associates to register their own web domains – building their own name awareness in the market.
5.4 CCH association or affiliation is limited to top professionals who are serious about their careers & business. When you are surrounded by the best, there is a natural tendency for your performance to match or exceed that of the best. This concept is the driving force behind CCH’s growth.
5.5 The move to CCH increases agent's confidence and self-esteem.
Everybody knows you have to produce to be with CCH. The office system behind the 50/50, 55/45 or 65/35 office agents are also geared towards empowering agents to make the move up the commission ladder towards independency : you have what it takes or you do not. There is no room for inexperienced, part-time or marginal agents not being able to support & maintain themselves. Being with CCH means being with the best or developing your skills to become the best…..
