HI - Ive been thinking about beomcig an agent but it seems quite expensive and just wondering how others started and if brokers covered any costs....


I know there is the

principles & practices training
state exam
licensing fee

then depending on broker:
desk fee
technology fee
training fees
errors & omissions

Then MLS fee
board of realtors fee


So far I takled to one broker - Prudential and this guy told me that they sponsor people for training and all you have to come up with is the licensing fee and test up front and they pay 4 the principles & practices. But he said the tech fee was $540 a yr, E & O was 350/yr but it covered me as well as them. then training is $100 upfront and $250 off the 1st 4 sales I make. then MLS $100 a yr and RE board $500 yr.

He said that commission starts at 50/50 between broker and agent and then as time goes by goes to 60/40 and then 80/20.


Does this sound normal>?

I have a meeting to go to at century 21 this week so i'll see what they say so I figured I'd see what you all think

Thx
Rae

I feel that many of the consumer who look at getting into this busienss does not really undertand it is a business. You have done some leg work which is good. Keep in mind. You should have at least $5,000 ready and prepared to invest so that you can run it like a real business. As a new agent you may have to start off at 50/50, but keep in minde everything is up for discussion.

The two biggies you left out are marketing and living expenses.

First of all you need to find clients. That takes either prospecting (you go out in the world and personally meet people who are or know buyers and sellers) or marketing. Prospecting is effective and cheap to free but it's very hard for most people. Marketing takes money.

Secondly, even if you do find clients (most new agents don't) then it'll still take a while before you close a sale and get paid.

Thx JFlynn... Unfortunately there is no way I could afford to jump into it full time and not work my day job to pay the bills until I'm up and running, so living expenses is all set, and I have experience in promotion/ marketing/ prospecting but thanks for reminder about costs associated.

Whitteg - that's exactly why I'm posting. If I'm saving aside 5 grand I want to know what it's for and not just "what if" money - ya know?

Thanks
Rae

I am not opposed to starting part time. I did it and I still am. However, especially this year, I treated this business more seriously, do things that will eventually get me off my full-time job, which I will do at the beginning of 2007. I think that can set you apart vs. one that will think this PT job is better paying, work less than a Walmart job.

Good luck.

You should have a few thousand dollars set aside. If you're getting into the business part-time, then you will have to expect a slower start. That means that the costs and fees associated with the business will probably be higher, because it's taking you longer to generate business. Most new agents start off by selling a home for their family/friends. Makes sure you let EVERYONE know what you do for a living. You should also act like it's a full-time business even though it's not. If you treat it as part-time, people will see you as only a part-time agent. Many people don't want to deal with part-time agents. Just my 2 cents.

I do 30 hours a week at Tarbell and 30 hours a week at my regular job. Not alot of sleep but it definently is paying off. All they offered was a 50/50 split upfront? Is this normal for alot of brokers? I started at 65/35 and can move my way up to 90/10.

When you are a new agent, 50/50 split is normal for large brokerages.

I am in Northville MI for Keller Williams Realty I started at 70/30 on my to 100/0. My franchise fee is 6% and we collect profit sharing checks at the end of every month and training is free. Operating Expernses for me are the following
$33/ month realcomp/mls (not kw related)
$30/ month E & O insurance
$50/ month KW adverttising for listings
$10/ KW e-mail.

Good Luck

Thx everybody . I was figuring a couple thousand - basically to cover 1 yr of fees to start.

Patrick - what do you mean your franchise fee? Why do you pay that - are you an agent or broker?

Thx
Rae

most large brokerage companies have franchises all over. like my office. i am with prudential. but my franchise is prudential americana group. those franchises make the agents pay the franchise fee that they pay to the large corporations, usually like 5 or 6%.

Oh ok. the guy I talked to was from Prudential but he didn't mention that fee. Do they all pay that? and is is 5-6% of commissions? seems liek money just comes out left and right from those..lol

thx
Rae

They usually range from 6% to 10%. Every real estate company takes that percentahe off of every sale you make. Theres no way around it, lol.

I wonder since this guy didn't mention it that it's a part of the commission split or something.. maybe that's why they only go to 80/20... or he just didn't tell me about that fee..lol

Thx
Rae

I went to century 21 today and thery said their franchise fee is built into their broker/agent split so that must be true at the other place as well.

C21 seemed to have a lot less fees then the prudential guy i spoke too.. and free training.. and ability to work part time... so i'm leaning towards them right now... still have 2 others to dal with. but C21's upfront costs are about 2000.....


Rae

Pound for pound C21 has the best training. Just converted in June and I have interveiwed and hired many agents.

Make sure the broker has you on a set training schedule. Much of the training can be completed online.

Good Luck!

i coneverted from c21 straight to prudential. the c21 franchise i was at had great training, but prudential offers great training too.

I'm sure it varies by offices but the prjudential guy i spoke to was kind of a jerk but he did offer training but charged about $1000 for it....some upfront and some off 1st 4 houses..... c21 was free and seemed like it would be more intense,..... not sure.. the jerk guy turned me off by his attitude though so who knows....


RAE

Actually, our Keller Williams brokerage does not charge a franchise fee. We have the normal 70-30 split, 16k cap and desk fees of $75/mo. So, it does depend on which brokerage you are with. Interview and check with several!

Steve, what is the 16k cap for/mean?

Thanks!

Once the company's share of the split (30%) reaches $16,000 during each year starting on the date you started with the broker, you then go to 100% commission for the remainder of your year.
At the start of each year based on your start date, split reverts to 70-30 and you start over again.

Yeah, our C21 office offers the 70/30 including all franchise fees, training, business cards, sign installation, E & O and more. No production quotas unless you close 4 sides per month then you go to 80/20 straight split.

Trust me when I say anyone who doesn't charge a franchise fee already has it built into the split.

Great question. I read this book by Robert Greco, which can be found at www.realestatecareersecrets.com He actually goes over his actual expenses on a monthly basis. His chapter on finances has helped me greatly!

why are all of your first few posts about this website you keep advertising? are you robert greco? if you are, just come out and say it instead of hiding your identity.

I actually posted on another real estate message board and the same guy posted the same mesage abot a comlpetely different subject. Boy I hate that.

Nobody cares about your stupid book.

I work for Prudential, excellent training and support, at least in my office. In training they said 1st year expenses would be about $1,800, and I have found this to be true. Also, plan for 1 commission check to be taken up in expenses each year.

I want to go back to the original topic: How much money do I need to start?

You can figure out the basic costs you need from your State Commission fees/ dues, and on top of that your Realtor board associations. You can also find out how much it costs to take all the required classes, exams and prep-exam courses if you wish. That would be the minimum you will need just to have a licence. On top of that, alot of people say 6 months of living expenses, at minimum. I think that's a good number, assuming that you will be in business in/ around 6 months.

Some agents do get their first few transactions within the first few months. But the amount they make is generally very very little. So, do consider this factor seriously also.