I am going to be opening a real estate office, but do not currently have my broker's license. I will be working on getting the license, but probably will not have it for at least the next year. I am going to bring on a broker of record who will basically do nothing except hang the license. I will be taking full responsibility for running the office and the broker of record will not be involved at all. I am trying to figure out with that scenario how to compensate the broker of record. Any suggestions on what is typical?

Ah yes, the "rent a broker."

The broker of record will usually get either a flat monthly fee, or a predetermined fee per transaction.

Good luck...you'll need it.

Ericka,
Why do you say good luck..I'll need it? Do you think it is a problem to set things up this way?

Anyone have any ideas as to what is reasonable as far as payment either per month or transaction?

Who is responsible for supervision?
The broker of record is.
How can this broker be legally responsible without being there to make sure everything is done correctly?
It's like having the responsibility without authority.

Most brokers will want at least $500 per transaction.

I've had the joy of renting a broker and Good Luck is right! For one the DRE is cracking down on so called rent a brokers it is a major violation. 2nd if things go wrong (meaning not thier way - financially for what ever reason) they will turn on you, in a heart beat. I've been a Branch Manager of my own office for about 3 years and had difficulties with 2 brokers already. I have failed the brokers exam about 7 times, my last score was 72% but it really wouldn't even matter, since I've been in RE since 1987. I would strongly suggest a Broker/Manager written Agreement for insurance.

I am presently a broker for a local builder (was an onsite agent for him for 3 yrs b4 that). We started an inhouse brokerage a year ago. They wanted me to be broker of record at that time, but I knew they would need a lot more than a broker signature on a file. After a year of frustration, I am leaving to finally open my own brokerage. I have 20 yrs of managemnt. experience and an MBA -- so it's definitely time. The broker of record is a huge risk for both parties, in my opinion. I wouldn't do it last fall -- it wasn't worth my reputation, license and risk of legal action if an agent did something stupid and I wasn't aware of it. I would tend to recommend that you wait until you get your license, and be your own broker. Hope this helps.
Karen

My thoughts exactly. Good luck!

Why don't you get your license first?

If you don't, your broker will get paid for the all transactions and you leave it up to him/her to cut you a check for your all your hard unlicensed work? By law, he/she is prohibited from paying an unlicensed person commission for unlicensed activity (solicitation, negotiation, quotes, etc)

Are you going to be the signatory on any trust account? Do you know the legal requirements? Do you think your broker will risk his license allowing this? After he/she's only in it for the money.

If you are disciplined for doing this, you are probably going to have a rougher time getting your license later.

Save yourself the headache and lawyers fees and get a license. I have seen so many of these filings and I have only seen one rent-a-broker situation that almost flew.

"By law, he/she is prohibited from paying an unlicensed person commission for unlicensed activity (solicitation, negotiation, quotes, etc)"

When working at a RE company (major franchise) a few years ago, the owner did not have a RE license, but he had a managing broker working for him, supervising all agents.
I'm sure the owner got paid. He left owing over $100k to the Broker (previous owner) and $10s of thousands to agents and advertisers. (he got me for only $250, I was lucky)