Menu

Negotiating Agency Shooting Contracts

July 16th, 2018

Logan asks:

I am just transitioning from working exclusively for one small team of Realtors to starting my own business. I will be offering photos, videos, and a 3D tour/floor plan product. I have read others on this site talk about being a “preferred photographer” for a brokerage and I was hoping to learn more about that arrangement. I am fairly certain this isn’t something that is currently being done in my area so I was hoping to learn the logistics. I think with enough volume, I will be able to offer a good product at a fair price, and hopefully this will sway some agents to hire a professional who might otherwise take their own photographs. Any insights/suggestions would be greatly appreciated.

Generally, what being a preferred photographer for an office means is that you have a contract with a particular office to provide you with an agreed level of business in return for giving that office a per shoot discount.

A number of years ago, Thomas Grubba in Oakland and Mike Miriello in Virginia negotiated agency contracts with real estate offices in their area and did a post on what to consider when setting up such a relationship. Here is their advice:

What Is an Agency Shooting Contract?
This is where a real estate photographer enters into a contract with a real estate company to shoot some number of listings per year. In return for a guaranteed level of business from the agency, the photographer gives the agency a discount on the price of each shoot. This kind of arrangement is a win for all parties. The photographer gets a guaranteed level of business, the agency raises the level of their marketing and the agents get a price break on good photography for their listings.

Agency Shooting Contracts Are Not for Everyone
I think before you try getting an agency contract, you need to be in demand by top agents. Your demand in the office you are negotiating with will help you in the negotiation. On the other hand, if you already have a large customer base and you are already shooting 400 or more properties a year, then an agency contract may not be for you. With this kind of account, you probably need someone to back you up so you can take time off now and then.

Key Items to Negotiate

  1. Price: The agency is going to expect a discount of between 10% and 15% off of your established shoot price in exchange for a guaranteed number of shoots.
  2. Minimum Shoots Per Year: Look for agencies that are going to give you a minimum of  250 to 300 listings a year
  3. Exclusivity: Some agencies may want you to shoot only for them. This consideration should decrease the discount you give them.
  4. Permissions: Don’t give away your copyright. Make sure it’s clear that any use of the photos outside the contract needs to be approved by you. That is, if the agent wants to give the architect, builder, stager, or home buyer photos, they have to come through you and should expect a licensing fee charged to the appropriate party.
  5. What’s Expected of Agents: Thomas says, “The hardest part of a contract is managing the agents and scheduling. Having a well thought out plan in advance is key to making it work.
  6. How Billing and Payment Work: Set the contract up so you don’t have to nag agents to get paid. One way is to collect upfront. Another way is to bill the agency once a month and they pay you directly. The agency can then bill the agents directly and take care of collecting from them.
  7. How Photos Are Delivered: You need a fast, efficient way to electronically deliver photos because of the high volume you will likely be shooting in a contracted situation.
  8. Scheduled Rate Increase: Once you establish your rates, it’s difficult to raise your rates. Thomas recommends specifying Cost of Living Adjustment plus 5% or a rate increase per year that you are comfortable with. If this is not agreed upon in the initial contract, it will be difficult, if not impossible to raise your rates without jeopardizing the contract.

General Negotiating Advice

  • Mike’s Advice:
    • Negotiating a contract has less to do with you, and more to do with external variables than you would think.
    • Small agencies will have the money to contract with you, but they may not have enough volume. Look for agencies that will give you 250-300+ listings a year.
    • You are in the driver’s seat when it comes to writing a contract. If you write one from scratch with the broker/general manager, you’re better off for it.
    • While negotiating price, be sure to give examples of costs like professional camera gear, lighting equipment, a reliable computer, specialized software, and travel. By doing this, it highlights the fact that you aren’t being paid just for your “eye” or “creativity”; you’re producing a product.
  • Thomas’s Advice:

The ideal contract is where there is a compulsory aspect that every property over a certain price will be photographed. That will depend on the area, but let’s say over $1 million. Everything under that price, the agent has the choice to have it photographed or not. The agent will need to give at least 3 days notice to set up a shoot, and the images will be turned around the next business day by 12 noon. A standard shoot is $xxx and generates up to 12 images and an estate shoot is $xxx (double the standard shoot rate) for up to 24 images. These designations are based upon a) How big the property is, and b) How many images an agent wants. For example, a 4,000 sq. ft. house automatically falls into the estate category even if the agent only wants 12 images. If an agent wants the 24 images, even for a 2,000 sq. ft. house, that also goes into the estate category.

Thanks to Thomas and Mike for sharing all their insights in this area.

Share this

6 Responses to “Negotiating Agency Shooting Contracts”

  • An agency contract sounds appealing but remember that every agency/broker contract I have ever seen states that the brokers are independent contractors. They can not force their agents to hire you. The only exceptions have been agents that work for a builder and property managers. The most they can do is let the brokers know they will get a reduced rate from you. This doesn’t mean you can’t seek out the top producers and establish a contracted rate with them.

  • I agree with Bill Jones – I am also a REALTOR (Berkshire Hathaway) and run a my own firm of real estate photographers, videographers and drone folks. All members on my team are also either REALTORS (Coldwell Banker) and others have family members with ReMax. None of our local area office have an “in house” contracted firm to do photos since all REALTORS are independent and can use whom ever they want. The only area firm that has “in-house” photographers is RedFin. I feel have REALTOR spread across all different firms keeps your business running with new and great opportunities for referral business. Plus not every REALTOR or their sellers like all photographers in the area. Each firm has their own look with photos and video. So taking business from all different folks keep you on your toes and also gets you name out to all area in your market.

  • Larry, Mike and Thomas have some great advice. I suggest a couple of additions and modifications. Don’t bill monthly, bill every two weeks at the longest. Every week is better. You could wind up waiting 2 months to get paid for a job. The office (Broker) should be responsible for paying your invoice and they can either bill the agents or include your services. Part of the advantages of working for one office is to eliminate having to bill multiple customers. Think about what you will give versus what you want in return. If an office wants you to work exclusively for them, they should have to guarantee a certain amount of photography work in return regardless of how many photo sessions they request. I stress “photography” as you probably don’t want to be required to spend time doing general office staff work when you aren’t doing photo work. Decide if you will allow “rollover” jobs and what time the minimum job time period will be. Two weeks might be a good compromise. If you have agreed to a minimum of 40 jobs per month, you likely want to spread them out to 10 per week rather than doing nothing (and not getting paid) for 3 weeks and then being asked to photograph 40 homes the last week of the month. This also means that you are getting checks on a steady basis.

    Just like working for a big agency, you don’t want any non-compete clauses in effect when you stop doing work the the office. You may also want an exemption so you can continue doing work for especially valuable clients that you have and for family members that are in the business. You will also want to avoid clauses that require you to submit to random drug testing, open ended background, credit or driving checks if you aren’t handling money or being issued a company car or credit card.

    If you are working for just one office, you are no longer an independent contractor as far as taxes are concerned. You become an exempt status employee or even a non-exempt employee. There are some loopholes, but if the IRS decides you don’t qualify, there can be some large penalties and fines that get applied retroactively. You want to talk with a CPA and maybe even get a second opinion just to be on the safe side.

    Work out how and who is allowed to book you. Is any agent allowed to schedule you or will an office manager be a gatekeeper? Another factor is what level of service can an agent book you for. I charge extra if somebody will be the art director on a shoot since that always takes more time. The same could happen with an agent that wants to tweak, review and approve each image as you make them. You might also be asked for an excessive number of images. There has to be some cut off point that requires going up the chain for approval on the job.

    How many jobs can you do or are you willing to do in a day? Who will be doing the booking? What areas are “home turf” and what are the limitations for jobs further out? Who determines what days your are available and how to you schedule days off? I work weekends since some owners prefer to be home during the photo shoot and can’t do that during daylight hours. I won’t stay in a home if there are only minors present. Since I might be working all weekend, I will need at least one day off per week to run errands and get things done at home.

    Who decides what gear you use and who owns it? Ideally, that’s you. You may also want to have it in the agreement that if the office requires that you add something like drone aerials, video, 3D scans, etc, that they have to acquire the gear on your behalf on a plan that allows you to pay off that equipment so you keep it or that the office owns it and pays you to operate it. If you don’t already have a drone and the office requires you to get one (and get licensed/insured for it), you don’t want to be in the difficult position of not being able to budget for it and they are in the position of tearing up the contract if you don’t. Special purpose gear like Matterport that need an additional subscription should be negotiated so that he office is responsible for the service subscription if you have to sign up for a term contract and your relationship ends with the office.

    I suggest making a list of questions that you can ask yourself about what you are willing to do in exchange for guaranteed income that puts you somewhere between being self-employed and being a de facto employee. You are putting your eggs in one basket. If you have been working as an independent photographer, you will be taking yourself out of the marketplace and if things end with the office you sign up to work for exclusively, you will have to put in a bunch of work to get your name back on the call lists of other agents who may have found a replacement for you if they were your clients before and you will have to get out and prospect for new clients. Hope for the best, but plan on what you might need to do if things don’t work out.

    Be sure to clarify what an office means by a “preferred supplier”. With some offices, it means that you have to pay them a percentage or fixed fee for every job you get from agents in that office. Some brokers want an annual fee to be on the list regardless of how much work you may get. The best situation is where you are on the list due to the quality of your work and service. All of the above is predicated on being the exclusive photographer for the office. The “pay to play” situation is a bad one. I don’t mind paying a commission for a referral, but once I’ve done work for that referral, I do not continue to pay commissions. There are some exceptions such as an agent that refers a builder that wants images at the same time I’m making them for the listing and refers that same builder again later on when I might not know that the same builder is involved. If the builder were to call me directly to have me make the photos some other time, I wouldn’t pay the agent a commission on THAT job.

  • While most of the discussion was on “# of shoots, reduced pricing, exclusivity” there are two major downsides.
    Ken touched on the first…”How much are you willing to pay for “Preferred Supplier.”” For firms, building a benefit package works both ways. Sone the have to pay for benefits not enjoyed by others – such as Realtor.com and Zillow special deals who are not called “Preferred Providers”. Then there are people/firms that want to be recognized by the firm as a “Preferred Provider” where the firm can charge for it. Realtors are increasingly becoming aware that “Preferred Provider” is simply paid advertising.

    The next issue is can they really guarantee X# shoots when Realtors are independent contractors? The only reason they work under a Broker is State Law requires that work relationship under the Broker umbrella, and by Independent Contractor they rear relieved of other employee statutory requirements – workman comp, health and other insurance benefits, although insurance agents may be “Preferred Providers”. In my office with around 120 agents, each are free to choose to work with and from my review, most do not choose Obeo who has the “Preferred Provider.” Likewise, the local MLS provides competition with a free (garbage) tour on listing for all realtors in every member firm and few upgrade to the freebe’s premium tour or pay for MLS’s contract with RealTour, both presented by MLS as a Realtor member benefit.

  • Being a preferred photographer for one brokerage sounds great, but let’s be realistic, it severely limits the upside you can develop with your own business. You are better off developing an excellent reputation with an office and earning referrals and consistent business, organically. Don’t discount your prices, just provide excellent service, on time, and when opportunities present themselves, go the extra mile a bit. Do this for LOTS of different brokerages and you’ll be better off. What happens if the brokerage you’re tied to has a down quarter, change in management, or their top producer moves to a different brand? Brokerages would love to promise the world and lots of business in exchange for a “deal” that they can present to their agents to add value to being a part of their office, but the reality is, it’s impossible for them to guarantee business. Diversify and you are better off.

  • Agree w/Darren but also want to add that most of the offices we deal with already have their in-house photographers/drone operators, etc. So, essentially we’re in competition with them.

Comments RSS

Leave a Reply