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What To Do If Your Agent Client Won’t Pay You For Your Services?

August 7th, 2012

I got the following question from a reader today:

I’m dealing with an client that has decided not to pay me for whatever reason. She hasn’t returned my emails or phone calls. I’m not sure what the problem is… Have you ever encountered this or done a post on how to deal with agents refusing to pay. I’m not even sure how to go about get my money.

In the last few months I’ve gotten more comments that real estate photographers are expending more energy than they’d like to on invoicing and getting agents to pay their bills. That’s what motivated several recent posts (herehere and here) on ways to set your business up to make sure that agents pay you before or in the process of delivering your work. Many people commented that they do just fine just doing business on a trust basis. Sure this is always preferred and usually works if you are dealing with successful business people but I know from direct experience that not all real estate agents are successful business people. So what do you do if an agent doesn’t pay you? Here’s my recommendation:

  1. Verify your communication is working: Email isn’t always verifiable. That is, your email could be going into there SPAM filter. So mail an invoice and use the phone to verify they are getting your invoice.
  2. Contact the principle broker for the office where the agent has their license: In every real estate office there is a principle or managing broker that is in charge of the office. Once you are 100% sure the agents is trying to avoid paying you, in a professional business like manner, contact the principle broker and discuss the matter. My experience is that the principle broker in an office is very interested in making sure that agents under their supervision are following good business practices and they have considerable influence over agents in their office. They can usually get this kind of issue resolved quickly.
  3. A last resort you could take the issue to small claims court: Small claims courts are run by local judges for settling small debts.  My guess is that #2 above will always work and you should never have to resort to small claims court but it’s there to resolve these kind of disputes.

Throughout the above process be polite and persistent and expect all the players to behave like respectable business people and they usually will! A significant part of not getting into these kind of situations is your success at working for agents that are successful business people. If you work for successful business people you will usually get paid on time.

 

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22 Responses to “What To Do If Your Agent Client Won’t Pay You For Your Services?”

  • I invoice my clients at the end of each month and (touch wood) haven’t had any problems getting paid. If this happened to me, I’d first check whether the photos are up on the ‘net then contact the agent and ask nicely whether they’ve received the invoice. Never assume they have. I’ll probably repeat this another week later then write it off until they want another property done. It’s just not worth going any further for a couple of hundred dollars.

  • Addendum: In these days of digital photography and the internet, the biggest variable cost incurred in each shoot is car running expenses (mostly fuel), which is minimal as I concentrate on local agencies. You could say there’s also lost time and lost opportunity costs (i.e. you could have taken another job that actually paid at that time) but it’s debatable as to whether they’re actual costs. Hassling an agent never pays off – they’ll just avoid you more and if they talk to other agents, you’re more likely to lose than them. Better to take the high moral ground, put it down to a valuable business lesson learned and move on. If they get a bad rap because they stiff people all over town, well, they’ll soon be out of business. Then you can gloat…

  • Tell the agent if he or she doesn’t pay, you will file a complaint on them with the state real estate commission. Even if non-payment of a bill is not a violation of the commission rules, no agent wants complaints on his record, or to have to respond in writing to a complaint. This may get a response faster than many other methods. I am a real estate broker, and this would work with me.

  • I know there are good reasons to bill monthly for good reliable clients, so this is not about them. What we do – and it is for all real estate clients is as follows:
    Book the date/time – we send a paypal invoice for 50%. When pictures and tour ready to send – we send paypal balance for 50% and then send everything via drop box or yousendit.
    Book the same day – we take a check for the full amount when we arrive at the house.
    Suzanne

  • I had this issue recently with a (now former) client. The advice to go to the managing broker is bang on. I did this and was paid within a day. The managing broker was very concerned with the reputation of the brokerage…go this route when, as Larry said, you are sure you are being avoided!

  • I’ve never had a problem with payments because I require payment prior to delivery of photos. Most Realtors pay me at the shoot, sometimes before. I’ve noticed that taking credit cards has helped in prompt payment. I got a Square reader but there are other methods including one that allows you to take pictures of the card with no dongle. Of course unlike a check or cash I get charged for the CC transaction so I just charge a few extra dollars for the processing but the Realtors don’t seem to mind, they like the convenience.

  • I have this problem very rarely, but one thing that worked for me was that after sending numerous emails and leaving messages, I contacted the managing broker, apologized for doing this, but withdrew my rights to use the pictures on MLS and asked them to remove them. Magically, the real estate “team” started to communicate and promptly paid. Whether or not I still had digital rights, it got the ball moving.

    The 2 other agents that have stiffed me over three years (not a bad percentage) I just wrote off. More time spent on getting new agents.

  • Did anyone ever consider billing…or threatening to bill…the seller? I’m a realtor and a broker-in-charge and I agree that approaching the principal broker or managing broker is a good idea. However, I also managed an exhibit house for several years and got pretty good at collections. Our “jobs” were often pretty complex and could involve lots of logistics, graphics, and the exhibits themselves that we billed the clients for. I found that the more explicit and documented the expectations where on both sides the fewer problems we had. This was especially true with new clients or those that were in trouble financially.

  • One one time I had this problem, it was a mess. This agent wasn’t afraid of her broker so I had to take it to the next level when talking to the broker didn’t work. I went to the board and had the photos pulled from MLS. Funny, once I had the photos pulled and the board sent a nice letter to the agent. I had a check in my hands in 2 hours.

  • The advice in going to the broker does work I’ve had to do this in the past. But get a square card reader and either accept payment in check at the time of the shoot or use square and tack on the processing fee, it will save you so many headaches!

  • I ask for payment at the time of the shoot. If they can’t/won’t pay I leave. This avoids any issues down the road and keeps us both honest right from the get go. We started using Square with our iPhones and the agents really appreciate being able to use their credit/debit cards onsite.

    Billing once a month adds another administrative layer (and carries risk of no payment) to an already busy schedule. Collecting payment at the time of the shoot eliminates that overhead and risk.

  • I don’t understand why so many seem to collect payment after the product has been furnished. Why not either collect a portion in advance (Say 25%) and the remainder upon delivery? Or provide the product to the client upon payment in full?

    I use a digital download system on my Website where the photos are downloaded by the agent from my Website after the payment has been received (Also collected via the Website).

  • I bill weekly using Freshbooks (best online system by far) and give 30 days to pay… and have rarely had an issue with non payments. On the rare occasion that a agent fails to pay after repeated reminders and is a pain in the ass….I wait until I get the payment and drop them, wont work with them again. There are enough agents and work out there to not have to deal with deadbeat agents.

    Like Larry said, going to their broker works wonders. Or maybe removing the multimedia website immediately and replacing the index page with a “this tour has been removed due to non payment from agent” would work pretty good too I would assume….I would bet the deadbeat would be jumping to pay so his client wouldnt see that!

    Like anyone, some agents are forgetful and need to be reminded, which Freshbooks does automatically at the times you specify…you invoice once and it does the rest for you, including letting them pay right through the bill using paypal. When the agent pays, freshbooks again does everything for you, takes care of absolutely everything.

    To me collecting money before or at a shoot just isnt professional (unless the agent asks to pay of course), it basically screams either “i dont trust you at all” or “I am living cheque to cheque and need this money asap”. As a business owner you need to be able to trust your clients or you shouldnt be working with them.

  • How much is Freshbooks… I looked on their site and all it says is FREE FOR 30 DAYS. I hate these sites that don’t make it easy to find out the cost… a pain.

  • As someone who has freelanced for more than forty years I’m pleased to report that I haven’t often encountered this problem, but when I have I’ve found that persistence (re-sending invoices, gentle prodding by phone, mail or email) usually works. (Agents who have been in business for three years or less don’t typically make a lot of money, so they have the same cash flow problems that you have. Be gentle.)

    And you might find that knowing you aren’t alone when dealing with difficult clients to be of some comfort: Visit http://clinetsfromhell.net

  • My typing finger is dyslexic. It should be http://clientsfromhell.net

  • @Patrick

    There is a link that shows a pop up of the pricing when you choose the free for 30 days option….its on the right “Paid packages”

    Or just use this: http://community.freshbooks.com/support/how-much-does-freshbooks-cost-2/

    I like it because:

    – send one invoice and it will send out reminders for you at intervals you set (30 days, 60 days etc)
    – Paypal is fully integrated into the invoice you send, so an agent just needs to click on the link in the invoice and pay.
    – posts any invoices paid online for you. Any cheques you simply enter it in yourself.
    – it keeps track of each clients invoices for the year, allowing them to view a Detailed Summary of all past/present invoices
    – 100% custom branded for your company
    – you can edit what any messages are on the emails sent by the program.

  • I use Freshbooks as well, and it was one of the best things I’ve done. The automatic 30 day reminders is awesome, and it makes it so easy for agents to pay online. I use Square as well, and between those two (and a feisty German who does my bookkeeping) I can’t say that getting paid is an issue for me. I pay $431 a year for about 600 clients. Best $400 a year I can spend, for sure!

    I also understand that agents don’t get a regular paycheck and sometimes you have to work WITH them a bit, and I don’t mind doing that. In return, they are usually great ongoing customers and I will get paid when they close a deal. Most are usually grateful for the understanding.

    I have to think that a big part of my large repeat business is that I try and work WITH my clients (not against them) in whatever way I can. Having those solid connections is a huge part of building and maintaining a good working relationship. In the end, we all win.

    So far, I’ve never been stiffed. The only losses I incurred is before I started using Freshbooks when I (literally) forgot to bill people because I got so busy. Now THAT’S pathetic.

  • After having gone the route of sending a PayPal invoice after the shoot and having to send numerous reminders for payment, I found I was spending too much time trying to collect. I had to contact one broker regarding an agent’s non-payment on one occasion and found that to be effective (although she wanted to know why the photos were delivered without payment). Currently, I have one client who is billed monthly. Many of my clients have provided credit card authorization which is processed after each shoot. The remaining clients are sent an invoice which must be paid prior to photos being delivered. I’ve found that if I don’t treat my business seriously no one else will, either!

  • This is why we created http://www.PaymentTab.com
    Let your clients pay and download your photos.
    Get paid instantly.
    Guaranteed.

  • I send my images with watermark for approval. When approved and paid, I’ll send without watermark.

  • I have recently run into middle eastern and Indian brokers having me photograph their renovated houses for sale. I have never had a problem with brokerages. I am thinking of filing mechanics liens on both houses for sale and adding a hefty service charge.

    Usually all my clients pay me when I complete the shoot. I think adding 10% to the total and using PayPal may be the way to go or simply declining all business if the realtor cannot be present to pay on site. I would rather lose the business than be stiffed for all the work.

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