Sorry, these may sound like dumb questions, however I am very new to real estate.

My first question is...do you need to be a licenced broker to purchase a real estate franchise? Or can somebody without a licence purchase a franchise (say RE/MAX for example) and then hire a broker to manage it?

My second question is, if you are able to purchase a franchise and hire a broker, how does the owner make money? Isnt the commision split between the agent and broker? and if the owner gets a percentage wouldnt it be smaller than the brokers anyway? What would the benefit of being the owner be?

Basically, if anybody could answer my questions plus give me any other information that may be helpful it would be greatly appreciatted.

Thanks in advance.

Ok, you can purchase a franchise if your not a broker. You could create a corporation, of which you are the owner. Then simply hire someone to be the broker of record for the corporation.

There are a number of ways that the owner could make money. For the most part, it would simply be a matter of deciding what percentage of the corporation keeps of transactions. The owners pay would come out of that amount.

If your the owner, the assumption would be that you have put out all the capital to start the business and aquire the franchise, I don't see that as leading to the conclusion that the broker would get a bigger cut than you.

Your first step should be researching corporations and how they work. I don't think you will have much trouble finding brokers, the problem will be finding the right broker.

R

May franchises will offer up a broker's license for you. I know when I looked at Exit they had Brokers willing to "lend" you a license for no or nominal monthly fee. However, these brokers are not on site so it is still the owner's responsibility to run the office.

I guesss it depends on what you want your role to be in the company. Just because you hire a broker doesn't mean they need to run the office. I know many people that have a broker's license but it doesn't mean they are more qualified than you to run an office. Are you a licensed real estate agent?

Most managers (whether they have a broker's license or not) get a salary and/or % of the profit.

I guess the benefit of being just an owner is profit with very little/no work. I guess you would just be an investor in a business.

In FL, a real estate agent cannot be an officer of a real estate company if they don't have a broker's license. However, someone who doesn't have a real estate license at all can be. That may be something you need to look in to. The real estate agent/owner can be a shareholder just cannot be an officer unless they have broker's license (in FL).

I am an agent/owner still working my way to Broker. I took a partner, and under his broker's shingle we are operating. Same with the franchise. Key definately is finding the right broker. Don't be confined to Real Estate Brokers though, those in the loan business with a broker's license could be looking for a good way to expand what their office has to offer under one roof. My partner runs a mortgage company, and I run the Real Estate company, he does his thing, and I do mine, and we both do great with the arrangement.

At my former agency, the owner was the franchise owner for eight years, and he never held a real estate license -- ever. His wife was an agent, he had a 30-year agent as office manager, and he "hired" a broker. That broker was a BINO (broker in name only), and never showed up other than to pick up his check.

The franchise owner, not being a Realtor, is not bound by the same regulations and ethics guidelines that Realtors are. I think that was NOT accidental either...

Last I heard, a Century 21 franchise sells for about $25,000. Not sure about the other big franchises out there, though.