Sunday, October 7, 2012

1130. Urban stress & barking dogs

On Saturday, Oct 6, 2012, I was having a business meeting with a 62-year-old slim man who was introduced to me by an old acquaintance realtor. This businessman had this offer of a S$150,000 rental commission per year from an oil rig company sending expatriates to Singapore. As he is not a licensed Singapore realtor, he could not handle this "lucrative" account. S$150,000 is a large source of revenue for a small-time realty.

My acquaintance said I needed only to pay 15% of the commissions to this man and to house the expats in serviced apartments. I agreed to meet him.   

During the meeting, he said the 15% would go to the American who would give him the exclusive deal. "I will get 40% of the commissions from you," he said. "This is a $150,000 yearly income. Both sides will sign an agreement to pay a penalty of 10% if they don't fulfill their obligations. However, you and I have to pay this American $6,000 upfront, otherwise, he will not give us the deal. You foot $3,000. This $3,000 is deductable from the 15% of the commissions you get. I give you 2 days to consider before I contact my other agents."

So, I was to pay $3,000 to somebody I don't know. I have to pay this American 15% and then 40% of the commissions to this broker. The expat arrivals would live in long term housing which means I have to co-broke with other agents at 50:50.

Assuming $150,000 commissions per year and 2/3 of it is due to co-broking as the other agent represents the Landlord. The gross income from co-broking will be 50:50 and this equals to 2/3x$150,000/2 = $100,000. 50% is given to the co-broker. So, the balance will be $50,000 for me. 15% goes to the American. The balance for me is $42,500. 40% goes to this man. I get $25,500.

Assume 1/3 of $150,000 is full commission to me.  Following the above formula, I get $25,500. The estimated income per year is $50,000. This assumes that there is $150,000 worth of business. I would have to provide 24-hour services to pick up the expat on arrival in Singapore at any hour of the day and give advices on education and provide after-sales services.

The man gets $50,000 for introducing this expat to me. He wants the $3,000 upfront and 2 days to decide.

Suddenly a thin balding man with a worried look passed by.  I knew him as an industrial park tenant and as a Landlord of a cluster bungalow in Punggol for many years. He had come to my Surgery 3 weeks ago to complain that the dogs were barking and depriving him of sleep. Now he brought up the same topic that I was not feeding the dogs and that was why they barked all day long.

"Please have a seat," I said to him. He did not want to sit.
"Why are you confrontational?" I asked him. "You came suddenly to complain about the dogs barking as they did not get fed some 3 weeks ago. I invited you into my Surgery to see the dogs. You saw the feed bowls were filled with dog food. Water bowls were full. "
"Your dogs are still barking today. They are not fed."
I was patient with him as I understood he had some loss in his business in this extremely competitive world where China is the world's factory, leaving little for the small-time businessman or manufacturer.
    

2 comments:

  1. If the dogs have really been barking, maybe you would like to try switching the radio on for them throughout the day ie Classical Music from Symphony 92.4? It sounds unconventional but has somehow helped my anxious beagle calm down when I am not in the room. music therapy may help soothe the ill dogs and cats at your practice and help them heal faster. Just a suggestion Dr.Sing. No harm trying it out(: Maybe the landlord should test this theory too.

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  2. Paying an unknown person, especially an American, so much money for the possibility of some business deal. Sounds like a bum deal but as they say, a fool & his money is quickly parted.

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