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Lately, I've been having a lot of issues with my current broker and am looking around for a different one. I won't state my grievances here, but I want to get an idea of what kind of commission is common these days.
I've heard a lot of people say 50/50, but here is what I was offered at my last interview:
40/60
- 25% training fee for 6 months
- 20% transaction fee
- $1500 per month desk fee
= Take home: before expenses
This seems like an insult to me as my sales/rentals numbers are good vs. how well the market is currently doing, but many firms in my area have hit me with similar commissions/fees. I was told that with higher desk fees comes greater commission splits; typically $1500 per month fee with 80/20 split.
I am currently with a 50/50 split, no fees and all advertising expenses paid. Can someone explain what is going on?
Haven't seen any splits like that. Just contact the different companies and schedule a meeting. Ask for what you think you're worth. I think CB/ERA/C21/KW/Exit/ReMax are all good companies in no particular order. CB/ERA/C21 are going to be similar. Exit/KW are similar with some differences in caps or recruiting structure, ReMax is a unique model. All are good, just a matter of which is the best fit for your personality, knowledge, and production. Good luck.
My deal... I am a small RE/MAX Broker in Kentucky. About $1000 to the office, $ 226 to the Regional Ad/Management Fund/ 95/5% split on all deals. You pay for all personal advertising. This is about 85/15 real split at $100,000 gross commission income.
Our office pays all expenses (with exception of MLS Dues/Board Fees) and pays 50/50 (for even the lowest level producer) & a $100 transaction fee. I bet we spend about $3,000 a month on marketing and the company still makes a decent profit (I'm also the bookkeeper). I'm not sure what the norm is in your market but the 20% transaction fee sounds crazy to me.
My office is a 90/10 split, I looked at large companies (mine has 70 agnts) and the splits were 50/50-70/30 and had ALL KINDS of fees. A couple of the larger companies were mentioned above and they're more like recruiting factories. And they fee you to death. My broker charges small transaction fees on a sliding scale depending on the sales amount.
You get hired because people like and trust you, not because of your broker's name.
My office is a 90/10 split, I looked at large companies (mine has 70 agnts) and the splits were 50/50-70/30 and had ALL KINDS of fees. A couple of the larger companies were mentioned above and they're more like recruiting factories. And they fee you to death. My broker charges small transaction fees on a sliding scale depending on the sales amount.
You get hired because people like and trust you, not because of your broker's name.
Derek, I almost agree with you. I hate the "recruiting factory" moniker, but you know you are on to something. It's a sad fact that part of our business model of today's world requires recruiting.
Be careful about being fee'd to death. I am the broker-owner of that model that is often most identified with fees. While fees can be obvious and therefore become a target, agents must remember that the total of fees is nearly always lower than the total of the splits. Bottom line, brokers require "X" amount of income to provide "Y" amount of services to their agents. Profitability has to be part of the equation too.
Derek, I almost agree with you. I hate the "recruiting factory" moniker, but you know you are on to something. It's a sad fact that part of our business model of today's world requires recruiting.
Be careful about being fee'd to death. I am the broker-owner of that model that is often most identified with fees. While fees can be obvious and therefore become a target, agents must remember that the total of fees is nearly always lower than the total of the splits. Bottom line, brokers require "X" amount of income to provide "Y" amount of services to their agents. Profitability has to be part of the equation too.
There's no doubt that one may become a Broker and expect to make money to have a successful business...why bother other wise?! My unique situation is that my broker is a VERY successful Realtor who was at one of the aformentioned brokerages that fee'd her to death. Even if you have no sales for a month you still have to pay desk fee's etc...she got sick of it and obtained her broker's license. Turns out she's a phenominal broker (for 10 yrs now) and is always avaliable to her agents. A very open door to many loyal agents!
There's no doubt that one may become a Broker and expect to make money to have a successful business...why bother other wise?! My unique situation is that my broker is a VERY successful Realtor who was at one of the aformentioned brokerages that fee'd her to death. Even if you have no sales for a month you still have to pay desk fee's etc...she got sick of it and obtained her broker's license. Turns out she's a phenominal broker (for 10 yrs now) and is always avaliable to her agents. A very open door to many loyal agents!
Ok, let me see if I understand. A broker offers agents an opportunity to make hundreds of thousands, if not millions of dollars in commission incomes. Then the agent fails to close a listing within a month. Ok, let's see... the broker's expenses didn't stop. There is a utility bill, maybe e&o, general liability expense, etc. There's even a payroll, and the agent thinks that its ok to let the broker cover all the expenses from his/her reserves because unless the agents sell enough to cover those expenses, there is no other income. Did I understand you correctly?
Instead of a "it's your deal" mentality, let's start looking at agency as being a small business. I assure you that at my office, an agent has a better chance of success than any other office in the area, but they must operate as a business and not as a real estate splitting deal.
Ok, let me see if I understand. A broker offers agents an opportunity to make hundreds of thousands, if not millions of dollars in commission incomes. Then the agent fails to close a listing within a month. Ok, let's see... the broker's expenses didn't stop. There is a utility bill, maybe e&o, general liability expense, etc. There's even a payroll, and the agent thinks that its ok to let the broker cover all the expenses from his/her reserves because unless the agents sell enough to cover those expenses, there is no other income. Did I understand you correctly?
Instead of a "it's your deal" mentality, let's start looking at agency as being a small business. I assure you that at my office, an agent has a better chance of success than any other office in the area, but they must operate as a business and not as a real estate splitting deal.
Well, it's a law of averages. While one agent may close three transactions in a month and another has a blank month, broker is still ahead. She has 70 agents and only hires experienced agents who bring their clients along. Broker didn't work (for however long) to gain these clients but benefits non the less because these clients become her clients. Sure she has expenses but her over head is kept low. Plus, as you can imagine at this split amount (90/10) there are no leads distributed and if there are those are handed to you and aren't cold or warm leads. They're red hot leads at a 70/30 split. She owns her business and business name; doesn't operate under a large brokerage name so there's no type of franchise charges or splits for her....
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