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Old 08-05-2011, 10:38 PM
 
5 posts, read 10,290 times
Reputation: 14

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Hi all, just passed my NJ state licensing exam this week and had an interview with one of the "name brand" franchise today. Just curious to see if the commission structure is fair and curious to see what kind of offers you are getting.

$480 errors and omission insurance, flat fee paid once a year.
$390 national advertising fees, flat fee paid once a year.
$300 multiple listing service fees, flat fee paid once a year.
$300 monthly franchise software and website fees, so $3600 a year.
7% franchise fee per transaction.
$150 documentation and administrative fee per transaction to broker.
After deducting 7% franchise fee and $150 administrative fees I get 70%(me)-30%(broker) split.
Once the 30% broker portion hits $18,000 a year (I highly doubt I will hit it), it will be fully refunded to me and my commission will be 100% for remainder of the year.

Just want to see what are your opinions. Trainings are very comprehensive from national level to local office.
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Old 08-06-2011, 06:30 PM
 
Location: Louisville KY Metro area
4,825 posts, read 13,682,442 times
Reputation: 2145
Quote:
Originally Posted by nightracerx View Post
Hi all, just passed my NJ state licensing exam this week and had an interview with one of the "name brand" franchise today. Just curious to see if the commission structure is fair and curious to see what kind of offers you are getting.

$480 errors and omission insurance, flat fee paid once a year.
$390 national advertising fees, flat fee paid once a year.
$300 multiple listing service fees, flat fee paid once a year.
$300 monthly franchise software and website fees, so $3600 a year.
7% franchise fee per transaction.
$150 documentation and administrative fee per transaction to broker.
After deducting 7% franchise fee and $150 administrative fees I get 70%(me)-30%(broker) split.
Once the 30% broker portion hits $18,000 a year (I highly doubt I will hit it), it will be fully refunded to me and my commission will be 100% for remainder of the year.

Just want to see what are your opinions. Trainings are very comprehensive from national level to local office.
First of all, I am a RE/MAX broker owner, just for the record.

Now, let's separate what the broker keeps and what the broker just passes through meaning that no matter where you work, you'll pay the same fees.

E&O should be competitive no matter where you work, but you'll have to pay it . Same for all your MLS & Board fees.

The rest is a value proposition. What is the particular broker/brokerage firms success rate with "rookies?" You could pay $ 10.00 and lose every nickle, or you could pay $1000's to the right broker and make millions. (seriously)
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Old 08-06-2011, 09:20 PM
 
Location: Columbia, SC
10,514 posts, read 20,358,849 times
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Seems alright for a new agent. Meet 2 or 3 more before you make a final decision. That being said, take money out of the equation and go with the company that you feel puts you in the best position to be successful. 50% of something is better than 70 or 95% of nothing.
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Old 08-06-2011, 09:59 PM
 
Location: Snellville, GA
468 posts, read 1,311,501 times
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I hope the 'national-iss' of the franchise helps produce the business for you to cover all those fees!

I will say that, since I'm not with a 'national' company, I don't pay the franchise fees, the national adverstising fees, and our MLS is structured a bit differently here.

That being said, I agree with Brandon Hoffman - check out some more, and don't necessarily go with the money figures - training, education and support are worth their weight in gold!
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Old 08-07-2011, 05:26 PM
 
Location: Louisville KY Metro area
4,825 posts, read 13,682,442 times
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Brandon is exactly right. Peachgal has a point that must be investigated; however, when was the last time you stayed in an independent hotel-motel? There is a reason the franchises have taken over the hotel industry.

I fought the franchise models for years, but I realized the greatest reason for being with RE/MAX (I wouldn't be with any others simply for this one reason.) is the referral network. There is no middleman and I am working three referrals right now from/to other RE/MAX offices.

But I digress, it's the marketing aspect of real estate that franchises do best. In today's economy, few people are moving up within their own region, most real estate is being bought and sold by those coming to or leaving town. There are many excellent mom & pops and independents, but the market is turning against them. Unfortunately...
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Old 08-07-2011, 09:08 PM
 
5 posts, read 10,290 times
Reputation: 14
Thanks for all the responses. I do have a few more interviews coming up, including both national franchise and non-franchise, I will make my decision afterwards. At this particular office the broker had been in business for many years and he mentioned that other than national and regional trainings offered by the franchise, he also does one on one training for new comers like me. He mentioned he runs his office like a family office where everyone treats each other like a "family member", he discourages competition and office politics among agents within the office. There is no floor duty, "cold calls" are handled by office assistant and being directed to listing agents. I also met the office assistant and few other agents at the office finalizing paper work, they were very friendly to me and I felt welcomed there.
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Old 08-08-2011, 05:29 AM
 
Location: Louisville KY Metro area
4,825 posts, read 13,682,442 times
Reputation: 2145
Quote:
Originally Posted by nightracerx View Post
Thanks for all the responses. I do have a few more interviews coming up, including both national franchise and non-franchise, I will make my decision afterwards. At this particular office the broker had been in business for many years and he mentioned that other than national and regional trainings offered by the franchise, he also does one on one training for new comers like me. He mentioned he runs his office like a family office where everyone treats each other like a "family member", he discourages competition and office politics among agents within the office. There is no floor duty, "cold calls" are handled by office assistant and being directed to listing agents. I also met the office assistant and few other agents at the office finalizing paper work, they were very friendly to me and I felt welcomed there.
Take a chance! If you join this particular broker and the Jello doesn't jell, move on. Don't change until you are sure the morning just won't dawn, but like dating, you usually know within a few _______ (minutes, hours, days, weeks) if the fit is right. I always recommend a one year committment, but if it's really bad, move on.



BTW, there are two aspects of real estate. The listing side and the selling side. I recommend that you start from the beginning with a listing attitude. Listing agents have a solid foundation to work from, buyer brokers are always at the whelm of the next call. Yes, take any buyer opportunity that comes your way, but build your business by prospecting for and developing a solid listing inventory. If you can get to where you can keep 10-15 solid listings at any given time, you will make money in real estate. It's the difference between an ant and a grasshopper (old fable). Ants work, store, and live off their stores during lean times while a grasshopper eats abundantly, but has no way to sustain itself once the summer is over.

Another career point, as hard as it may often be, work your career as a business. Take a sizeable (10, then 20 or 25%) portion of the profits from each transaction and grow those amounts into a six month short-term reserve, then grow a permanent retirement fund.

Also, hire a financial planner, a CPA, get a solid banker, and an attorney, all about your age to coach, guide, and protect you. Your broker, if a good one, will serve as your coach.

Last edited by tomocox; 08-08-2011 at 05:54 AM..
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Old 08-08-2011, 04:08 PM
 
Location: Columbia, SC
10,514 posts, read 20,358,849 times
Reputation: 9551
Quote:
Originally Posted by nightracerx View Post
Thanks for all the responses. I do have a few more interviews coming up, including both national franchise and non-franchise, I will make my decision afterwards. At this particular office the broker had been in business for many years and he mentioned that other than national and regional trainings offered by the franchise, he also does one on one training for new comers like me. He mentioned he runs his office like a family office where everyone treats each other like a "family member", he discourages competition and office politics among agents within the office. There is no floor duty, "cold calls" are handled by office assistant and being directed to listing agents. I also met the office assistant and few other agents at the office finalizing paper work, they were very friendly to me and I felt welcomed there.
That sounds exactly like the kind of office environment a new agent needs.
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Old 08-08-2011, 07:05 PM
 
Location: Austin
7,238 posts, read 20,345,612 times
Reputation: 9977
The $18,000 is refunded back to you? Are you sure about that? How does the broker make anything if he's refunding the split back to everyone. I've never heard of that.

I'm with a National Company, and I don't have a franchise fee. 7%? Yikes! The highest I had ever heard of previously was 6%, but I also don't have out 30% so who am I to judge on that part. The main part I question is the refunding of the $18k. What would make a broker do that?

Oh, and a $300 a month website fee. Why is that not part of your split?
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Old 08-08-2011, 08:15 PM
 
Location: Snellville, GA
468 posts, read 1,311,501 times
Reputation: 163
tomocox... how about a bed and breakfast as opposed to an independent motel or national chain - as they offer a bit more personal attention and a more relaxed atmosphere

I like the 'family feel' that my non-national non-franchise broker offers.

And yes, my eyes got big at some of those $ and % figures!
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