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Our KW office is about $80 per month, includes one of the MLS monthly payments (the other is paid per transacton), the technology fee, phone extension, and a few other things. Splits are negotiated on entering based on the volume of business you have been able to demonstrate (i.e., if you're closing $30-50 million a year, your negotiating position is much stronger :-) But at KW, everyone caps at $18,000 and stops paying the split, so actually a lower split just means that you "cap" sooner. *shrug* There's no "transaction fees." Of course, it may vary a bit by office, but that's the basic model.
If you want a desk in the office, the desk rent depends on if you want a private office wth a door, or a desk carrel, prices range from $50 a month to $200 a month (prime view private office)
That does not include any administrative assistance beyond basic receptionist duties -- you take care of your own photos, you take care of inputting your own listings, your own flyers, your own signs, your own advertsing, and you are also charged for copies, etc. Usually lots and lots of on-going training, though.
At $1,000 a month, by god, they better be providing lunches, mani-pedis and taking care of a LOT of the "paperwork" with listings and contracts.
Our KW office is about $80 per month, includes one of the MLS monthly payments (the other is paid per transacton), the technology fee, phone extension, and a few other things. Splits are negotiated on entering based on the volume of business you have been able to demonstrate (i.e., if you're closing $30-50 million a year, your negotiating position is much stronger :-) But at KW, everyone caps at $18,000 and stops paying the split, so actually a lower split just means that you "cap" sooner. *shrug* There's no "transaction fees." Of course, it may vary a bit by office, but that's the basic model. ...
At $1,000 a month, by god, they better be providing lunches, mani-pedis and taking care of a LOT of the "paperwork" with listings and contracts.
$1000/mo x 12 months = $12,000 and you keep 95% of your commission. Doesn't seem that bad to me?
$1000/mo x 12 months = $12,000 and you keep 95% of your commission. Doesn't seem that bad to me?
So you do $5 million @ 2.5% means 125,000 GCI, and another $6250 to the firm?
12000 + 6250 = $18,250 is the agent's total cost of business in your office?
Includes any corporate or franchise fees?
No tech or document fees?
E&O included?
No Office referral fees for business given by the office?
Assuming MLS and Realtor fees are separate anywhere you go.
Signs and business cards, etc, all additional?
So you do $5 million @ 2.5% means 125,000 GCI, and another $6250 to the firm?
12000 + 6250 = $18,250 is the agent's total cost of business in your office?
Includes any corporate or franchise fees?
No tech or document fees?
E&O included?
No Office referral fees for business given by the office?
Assuming MLS and Realtor fees are separate anywhere you go.
Signs and business cards, etc, all additional?
I can only speak for myself, but yes all fees are included in the monthly cost. There are no lead referral fees, transaction fees, tech fees, doc fees, etc. The agent pays the desk fee which is based on my cost to run the office (the brick and mortar, copier, e&O, etc.) The franchise royalty is included in the 5%.
If an agent is more comfortable with splits than desk fees we offer a no fee 70/30 split with a cap that is $5,000 higher than the cost of the yearly dues. In the above example if it's $12,000 that means the cap would be $17,000.
The agents only additional cost is for their copies (2 cents b&@/7 cents color) and I just pass that on because that's what I pay or if they want a desk in the office (125/mo for desk/50 for cubicle). Agents pay for their own marketing so if they want MLS, business cards, zillow leads, car magnets, whatever, they pay for it out of pocket but that's true anywhere I believe.
Last edited by Brandon Hoffman; 04-13-2015 at 12:32 PM..
So you do $5 million @ 2.5% means 125,000 GCI, and another $6250 to the firm?
12000 + 6250 = $18,250 is the agent's total cost of business in your office?
Includes any corporate or franchise fees?
No tech or document fees?
E&O included?
No Office referral fees for business given by the office?
Assuming MLS and Realtor fees are separate anywhere you go.
Signs and business cards, etc, all additional?
Can't speak for KW nationally, but around here . . .
If you do $5,000,000 around here, then at 3.0% (usual and customary commission around here is 6%; so half that), your GCI is $150,000. A 95/5 split (which is very, very generous, and only given to the top producers - you'd need to be booking $12 million plus to get a split like that), would be $7,500 to the firm, plus your monthly office fees (about $100/month, if you don't have a desk.) Most new hires would be at a 80/20 split, which would result in an $18,000 contribution. (20% of $150,000 is $30,000, but KW around here "caps" at $18,000 - the cost of doing business in the big city :-) So your net with an 80/20 split of $3,000,000 would be $138,000.
So, basically, around here, with an 80/20 split, you would be paying to your office for all sales up to $3,000,000 and GCI of $90,000. After $3,000,000, you keep everything.
At the lower sales levels, it's not much difference. At $5 mil, assume Brand X has a 95/5 split, resulting in $7500 to the office, plus the $1,000 a month, equals $19,500 total to office. KW would be $18,000, plus office fees of $100/mo, for a total of $19,200. Eh, not enough to spit at. BUT . . . the higher producers end up with significant differences. One team I work with booked over $25 million last year. Figure a total of 2.7% on $25 mil, that was a GCI of $675,000. With a 95/5 split as described at Brand X, that would have been $33,750 to the office, plus $12,000 in office fees, for a total of $45,750. At KW, it was still $19,200 to the office. That's a $26,550 savings.
Mileage may differ, depending on referral fees to other agents (there's no office referral fees for business referred by the office), concessions (i.e., 2% on a sale instead of 3% to get both sides of a buy/sell transaction), etc., etc. Also, KW has the profit share program, which is a whole 'nuther ball of wax (basically, a small percentage of the income generated in by agents you have brought into the office -- your "downline", so to speak) and a source of passive income.
In our office, we provide the first 500 business cards -- after that, you're on your own for signs, cards, lockboxes, MLS input, photography, etc. There are no "closing transaction fees". Other offices may offer slight differences -- but that's the basics.
Can't speak for KW nationally, but around here . . .
At the lower sales levels, it's not much difference. At $5 mil, assume Brand X has a 95/5 split, resulting in $7500 to the office, plus the $1,000 a month, equals $19,500 total to office. KW would be $18,000, plus office fees of $100/mo, for a total of $19,200. Eh, not enough to spit at. BUT . . . the higher producers end up with significant differences. One team I work with booked over $25 million last year. Figure a total of 2.7% on $25 mil, that was a GCI of $675,000. With a 95/5 split as described at Brand X, that would have been $33,750 to the office, plus $12,000 in office fees, for a total of $45,750. At KW, it was still $19,200 to the office. That's a $26,550 savings...
So if someone is doing 25mil they have a team. How much do the additional team members cost? What are you getting for $19,200? What are you getting for $45,750? It's not just money, it's value also.
I would expect a brokerage affiliation to provide adequate buyer or seller business contacts for the associates to cover their costs paid to the brokerage from GCI generated from that business.
I would expect a brokerage affiliation to provide adequate buyer or seller business contacts for the associates to cover their costs paid to the brokerage from GCI generated from that business.
KW may have a "cap" of $18k, but that doesn't include the franchise fee. $18k is the lowest cap I've ever seen across the country for KW, and they all have the $3k franchise fee as each one is now a franchise, even the Austin ones where they didn't charge the fee for a very long time, so it's really a $21k cap. True numbers should always be used when you're trying to compare apples to apples, not figs or kiwi.
And when I was with RE/MAX, I never EVER paid anywhere near $21,000 for my monthly office fees plus split. I left RE/MAX after 11+ years, for greener pastures for more money in my pocket, and still don't understand the Kool-aid that some people drink when they meet certain brokers.
There are thousands of brokers out there for a reason, and it's because there is no one-size fits all model.
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