Champlin Park Mentor Pool
Introduction & Objectives
Here at the Champlin Park Office, the level of internal support and collaboration is second to none.  This will be further exemplified through one of our newest initiatives: The Mentor Pool.  This structured approached is designed to pair up and assist both; the new 'wide eyed', eager, energetic New Agent as well as the seasoned, well schooled real estate savvy Veteran.  While each will benefit in different ways, the objective is to create a mutually rewarding relationship.
In brief, the new agent brings the transaction to the table, the veteran agent brings their knowledge and together they successfully complete the transaction.  In most instances the new agent may be "phasing in" from another career.  Because the 'phase-in' agent has another full time commitment outside of real estate, they might not be able to respond in a timely fashion to the demanding situations associated with a specific transaction.  The veteran agent's involvement brings this additional transaction support. Thus providing excellent customer support to our clients and the other parties associated with the transaction.
In establishing the mentor relationship, we will select from the associates in our office, individuals who have demonstrated an interest in helping others.  The mentor does not necessarily need to be one of the 'top-top multi-million dollar producers' in our office, but rather a full time associate who has demonstrated good judgment and career growth.
 
Both parties to the mentor relationship benefit:
New Agent Benefits Veteran Agent Benefits
Seasoned advice on their first series of real life transactions. Monetary compensation associated with a specific, predefined referral fee from the transaction.
Someone in place to communicate with the customers in the event the new agent is unavailable. Teaching increases personal mastery!
Establishing new, healthy relationships with-in the office. New ideas and contagious fresh attitudes.
Additional Perspectives. Additional Perspectives.
TERM & REFERRAL FEES & THE REALTOR'S CREDIT UNION
When establishing a new mentor relationship there are two areas that require discussion and and agreement upon.  These are; the length of the mentor relationship and the referral fees associated with the specific transactions.  It is important that both parties to the relationship understand and agree to "the terms" in writing prior to beginning any transaction.  To help with this objective we provide a written Mentor Agreement. It is acceptable to edit and amend this agreement as best fits the relationship.  The important point being that the discussions occur early in the relationship and that the agreed upon terms are in writing.
Length of the Mentor Relationship
The length of the mentor relationship is not determined by a specific number of transactions, but rather by the phase-in agent's ability to move into their new career on a full time basis.  During the initial meetings we will establish monetary goals and transaction benchmarks as to when this transition might occur.  If a new associate is unable to make the transition, then perhaps placing their license in the Edina Realty Referral Network (ERRN) may be the best option.

The Referral Fees
The mentor shall be compensated for their efforts by receiving a mentor referral fee from the new associate's share of the commission on any transaction where the mentor participated either as an active participant or in an advisory role. The mentor fee will be calculated in the same fashion as a referral fee.  It is recommended that the mentor fee in the range of 20% to 50% of the new associate's leg of the transaction.  To assist the understanding of the actual dollars involved we provide six various scenarios.  Each scenario shows a range of possible referral fees ranging between 20% to 50%.  We've converted the referral percentages over to actual commission calculations based on the specific scenario.

Commission Calculations:  For these scenarios, we assumed that the new agent was on the ERHS 50/90 plan, while the veteran agent commissions were calculated using the ERHS 90/10 schedule.  Also note that the new agent commission dollars represented includes the 4% marketing allowance while the veteran agent 90/10 commission numbers does not have any deduction of the monthly office fees. 

Scenario 1
Buy Side
$235,000
2.7% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 2,753 $ 1,593
40 %  /  60 % $ 2,202 $ 1,911
35 %  /  65 % $ 1,927 $ 2,071
30 %  /  70 % $ 1,652 $ 2,230
20 %  /  80 % $ 1,101 $ 2,549
Scenario 2
Listing Side
$250,000
7% w/3.15% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 4,200 $ 2,429
40 %  /  60 % $ 3,360 $ 2,915
35 %  /  65 % $ 2,939 $ 3,158
30 %  /  70 % $ 2,519 $ 3,401
20 %  /  80 % $ 1,680 $ 3,887
Scenario 3
Buy Side
$330,000
3.0% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 4,321 $ 2,500
40 %  /  60 % $ 3,457 $ 3,000
35 %  /  65 % $ 3,025 $ 3,249
30 %  /  70 % $ 2,593 $ 3,500
20 %  /  80 % $ 1,729 $ 4,000
Scenario 4
Listing Side
$295,000
6.5% w/3% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 4,508 $ 2,607
40 %  /  60 % $ 3,607 $ 3,129
35 %  /  65 % $ 3,156 $ 3,390
30 %  /  70 % $ 2,705 $ 3,651
20 %  /  80 % $ 1,803 $ 4,173
Scenario 5
Buy Side
$280,000
3.15% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 3,845 $ 2,224
40 %  /  60 % $ 3,076 $ 2,669
35 %  /  65 % $ 2,691 $ 2,891
30 %  /  70 % $ 2,307 $ 3,114
20 %  /  80 % $ 1,538 $ 3,559
Scenario 6
Listing Side
$425,000
6% w/2.7% co-op

Commission Income Calculations
Mentor % / Agt % Mentor $ Agent $
50 %  /  50 % $ 6,140 $ 3,551
40 %  /  60 % $ 4,912 $ 4,262
35 %  /  65 % $ 4,298 $ 4,617
30 %  /  70 % $ 3,684 $ 4,972
20 %  /  80 % $ 2,456 $ 5,682
Example of a 6 Transaction Mentor Agreement
Let's take this one step further.  Let's assume that the mentor relationship lasted over 6 transactions.  With the mentor's percentage on each of the six transactions structured as follows:
50% on the 1st Transaction
50% on the 2nd Transaction
35% on the 3rd Transaction
35% on the 4th Transaction
20% on the 5th Transaction
20% on the 6th Transaction
The reasoning behind the declining percentages received by the mentor is based in the assumption that with each successive transaction, the new agent becomes more proficient and therefore takes on more responsibilities.
Now let's apply the agreed upon referral percentages to the 6 different scenarios, converting the percentages over to actual commission income:
Scenario # Mentor % / Comm $ Agent % / Comm $
Scenario 1 50 %  /  $ 2,753 50 %  /  $ 1,593
Scenario 2 50 %  /  $ 4,200 50 %  /  $ 2,429
Scenario 3 35 %  /  $ 3,025 65 %  /  $ 3,249
Scenario 4 35 %  /  $ 3,156 65 %  /  $ 3,390
Scenario 5 20 %  /  $ 1,538 80 %  /  $ 3,559
Scenario 6 20 %  /  $ 2,456 80 %  /  $ 5,682
Total Comm $: $ 17,128 $ 19,920
The Realtor's Credit Union
A very important step to successfully phasing in to this career, is to open an account at the Realtor's Credit Union.  Once opened, you will then need to establish an automatic deposit of your real estate income into this account.  As you begin to have successful closings, your account balance will grow.  You are not to touch this account unless it is for real estate related expenses!  Your goal is to build up a cushion!  This cushion can make a huge difference in the successful transition to your full time real estate career!
WHAT NEXT
Are you looking for a Mentor?  Agents who are phasing in from another career certainly require a mentor.  However, there may also be new agents who are full time, however for what ever reason they would like to have a mentor on their first few transactions.  This is absolutely acceptable.  You are encouraged to sit down with Paul to discuss this option.  The initial discussion usually takes about 40 minutes.  We will discuss your financial objectives.  What income level do you need to obtain to make the move into this career on a fulltime basis?  We will go over the mentor agreement.  We will also discuss your time commitments as well as the available time that you will be able to focus on real estate.  We will answer all your questions.  From there we will move to the mentor selection phase.
I would like to be a Mentor.  Let Paul know if you would be interested in being a mentor for an associate who is phasing-in to this career.  We will set up a time to go over the mentor agreement, as well as other areas associated with being a mentor.
Mentor Agreement   < Click here to Down Load and Print The Mentor Agreement (Word Doc)