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Question from a newbie agent here. I have been an agent working for a "mega-firm" for only 7 months now and I have been approached by a senior agent asking if I would like to join him in a team. I have found some success on my own so far, closing 6 deals since January with 2 more close to entering escrow.
This agent has offered me a commission split off his percentage of 90% after cost of sale and expenses versus my 70% current split with the Brokerage.
He expects me to bring all of my deals into the team and run them through him and his full-time transaction coordinator, who also takes a cut, and in exchange he will bring me into some of his deals and give me the overage he cant handle. He is currently processing over 1.5 million a month in property and has over 40 listings. He has been consistently in the top 3 of all agents in our county for overall production every month and his phone is ringing all day long with buyer inquiries etc and he wants to give these buyer leads to me to handle. He has offered to split his commission with me 50/50 on every deal I help him with and he expects a 50/50 split on every deal I bring in. He is partnered with one other agent who works in the commercial division and they have thier own arrangement as well.
Overall my commission percentage will drop; however, the potential to increase my involvement in more deals will increase.
Am I missing something here? I cant decide if this is a good thing or if I am risking something here. I have not yet begun to market myself much yet and really have no name recognition etc. Most of the deals I have secured have come from my own contact circles and working the floor on "floor time."
Anyone have any experiences out there or "watch-out" situations I should be aware of? I know he wants ans answer this week.
Any opinions would be helpful.
Thank You
P.S. On the day he asked me to join him an agent sitting in the office next to me came in and cleaned out his desk. He only closed 2 deals last year and he was finished with real estate for good. This got me thinking.
You're doing good. By joining him you'd be doing more deals for less money? Will he give you enough deals to make up for the lower split? What kind of guarantees on income is he willing to give you if you're giving up a % of your own deals....
I'm not saying it's a good or a bad idea. It depends on how much business you're going to project for in the future and how much you could learn from him.
You seem to be on a good start. Many new agents would be pleased with your success so far.
Besides crunching the numbers, you have to ask how this will work if you split in the future. Can you take your contacts with you or will you have to leave them with him? Or is this something you see as a long-term solution?
Another point is to talk to your broker about the pros/cons of teaming up like this.
Almost the exact same thing happened to me when I was starting out except I was still expected to give a cut to my broker as well. So, I gave a commission percentage to this senior agent (only 25% in our arrangement) plus my broker's portion. The difference for me is that the senior agent only got a cut from me if it was a transaction that he gave to me. Any transactions I came up with on my own were not processed through him. After much thinking, I did agree because I figured that, while I was doing fairly well on my own, a portion of the pie is better than no portion of the pie. It ended up working well for both of us and we stuck with it until I left the area.
Numbers, numbers, numbers. Are you willing to give up control even if it means more income? What's your out-game? If you go in, can you get out? What will it cost you? Will you have to change brokers/firms? (emotionally if not indeed physically?)
What is your broker offering you? Is there adequate training? Is it timely?
You've asked some very good questions, now keep asking.
Thank You for your responses so far. You have brought up issues I hadn't even thought of and that is why I am asking.
Nina, good points about the contacts. Who's long-term customers would they be and who would service their needs in the future if we split?
Brandon, yes exactly. That is what has me scratching my head. Will I get enough new deals to make it worth it or would I just be giving away some of my business. I don't know.
Lindy, that's the way I anticipated it working for me. I would assist him as a partner in his overage and I could build my own business as well through my agreement with the broker on my own. He made it clear he wants my deals to go through him so he gets a cut and he would be available to help me with any of my needs along the way. Especially if I was unavailable for showings, inspections and negotiations for what ever reason. He and his TC could step in at anytime and assist If I were unavailable. He, in turn, would ask that I handle issues for him on deals when he is involved with his family and kids stuff on the weekends and sporting events, vacations etc.
Tom, I never thought of moving on to a different broker. I think I am too new and short-sighted at the moment but those are real issues I will now have to consider.
Thank You for your responses so far. You have brought up issues I hadn't even thought of and that is why I am asking.
Nina, good points about the contacts. Who's long-term customers would they be and who would service their needs in the future if we split?
Brandon, yes exactly. That is what has me scratching my head. Will I get enough new deals to make it worth it or would I just be giving away some of my business. I don't know.
Lindy, that's the way I anticipated it working for me. I would assist him as a partner in his overage and I could build my own business as well through my agreement with the broker on my own. He made it clear he wants my deals to go through him so he gets a cut and he would be available to help me with any of my needs along the way. Especially if I was unavailable for showings, inspections and negotiations for what ever reason. He and his TC could step in at anytime and assist If I were unavailable. He, in turn, would ask that I handle issues for him on deals when he is involved with his family and kids stuff on the weekends and sporting events, vacations etc.
Tom, I never thought of moving on to a different broker. I think I am too new and short-sighted at the moment but those are real issues I will now have to consider. Hmmmm..all great responses.
Thank You!
I was misunderstood. I am in no way suggesting you would change; however, if you join the team, and it's not a good fit, how do you get out? Will it mean that you might have to change brokers to get relief?
Especially if I was unavailable for showings, inspections and negotiations for what ever reason. He and his TC could step in at anytime and assist If I were unavailable. He, in turn, would ask that I handle issues for him on deals when he is involved with his family and kids stuff on the weekends and sporting events, vacations etc.
Be skeptical of this ... if this agent is truly as busy as you say, his availability to help you with inspections, closings, etc. will be minimal. I think you would end up helping him out more than vice versa.
One more question to throw in the mix . . . how old is this agent? Is he retiring any time soon? If he does retire is he willing to hand (or sell) you his book of business? You'll already be known to many of his clients at that point I'm sure.
If this agent is as busy as you say, I don't think you'll be able to learn too much from them. However, if you already have good learning resources and at the end of the day you'll earn more money with him than without him, I don't see a problem.
Thanks. He is actually younger than me. I'm 45. He's been in the business for 20 years full time with 10 in finance prior to real estate. He also has his brokers license and had his own RE agency before the bottom dropped out in 2008. He closed his own agency and then was recruited by mega-firm to sell for them and became a top agent within 12 months.
He wants to meet Thursday. I think I am gong to run some scenarios based on the groups responses by him and see where it leads. We shall see!
Thanks
Captjob
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