I am currently working to get my brokers license and will be opening an office. I am going to be offering a very aggressive commission split and as one of my main ways to keep costs down I am looking to have my office based out of my home. I do not want to have agents in my house. I would want all the agents to work out of their house and meet clients at other locations. I am wondering how agents would feel about not having an actual office to ever go to. Has anyone that has done this with the goal of recruiting agents had a hard time recruiting agents? Do agents or clients if they are made aware of this uneasy with that idea? How do you handle showings? Do you have agents call directly to the listing agent to set up a showing or use one of the eshowing type places? How do you handle earnest money deposit checks? The listing agent would need to get the check for settlement, but if I don't want people in and out of the house, how else can you work this? How do you handle conveyancing? Do you still have staff that handles that or do you have the title company handle it or the listing agent?

See my comments on the other thread, no need to repeat yourself!

its almost as expensive this way (trying to replicate an online environment through technology) I had the same vision you did and currently employ over 50 agents and I work out of my house. However, I spend just as much money as a broker with an office. The savings is minimal.

VM,
Based on your experience, can you address any of the questions in my original post?
Any help would be appreciated.

the main difference is that you will not have a commercial office environment. so, you will need to have a conference room available somewhere for meeting clients. with this type of organization, you will be attracting the more experienced, autonomous agents that don't need or want a structured office environment to work from, and don't need mentoring. you will inevitably have less immediate control of your operations, but of course, as broker you will still have the same duty of supervision. communication between you and the agents will be critical. you must be very well prepared with all systems in place BEFORE you start the operation, or you will be in disarray and lose clients. YOU will be the critical hub of the operation, so you need to be prepared to perform that function competently and efficiently.

ericka said it best, not to mention since you will be attracting the more experienced agents, they will expect you to be one of the best, most experienced brokers around. They will have advanced situations, scenarios and even lawsuits for you to handle on a weekly basis.

I have a 'virtual office' to keep costs down. We save our sellers money and my agents only pay a small office fee per closing. It does work if your agents are able to use the Internet, email, faxes etc AND you have a comprehensive web site. Agents who are new and those with experience call me frequently to find out what my agency has to offer. Too many just don't know how to function without sitting in an office all day...Since my state requires a physical address for licenses and other 'legalities' I did have to open an office and it is nice to have a place to meet potential clients for the first time, pick up checks and contracts etc.

Hi

I have a home based office here in OHIO. There are 17 agents and it works out great. I have a weekly conference call via 1-800 FREE conference number. We have 1 meeting a month (tranining). FREE Rooms in all 14 libraries in my area. We also have other meeting throughout the month when affilitates want to take us to lunch and (Pay) and talk about their products. I have new and experienced agents. WE have the new agents work with a TEAM leader at the beginning. WE have a very agreesive commission split. As the BRoker I feel I should be compensated, but I am not greedy and that is why we have been one of the fastest growing indepen. companies AND I dont take everyone. If the agent does not fit our TEAM mold I dont want them. I know many Brokers using lines of credit and their "OWN" personal funds to stay afloat. No way to have a business. If you need any help let me know. Send me your email and/or number.

A few of you have commented on having "aggressive commission splits." Exactly what does that mean? What percentage to agent/brokerage? I will bestarting my own brokerage this month, and will do so from my house through the summer (to save expenses, primarily), then hope to have saved enough to lease a place in the fall. I don't expect to hire any agents until I have a real office for them to go to, so I have some time to get my commission structure in place....
I have ideas on how I want to do it, but could always use more input! By the way, in this area, most brokerages start agents at 50/50 split. Mine will be better than that!

what do you define as "aggressive"?

I will be doing 100% split with a monthly fee and per transaction fee for back office functions.

sounds good to me!

I've watched a few other Brokers try to manage an Agency with 8 or 10 Part-Timers as their "Staff". In general it always proved to be an unsupportive revolving door with almost everyone of the upstarts leaving the Business discouraged. A few went to larger Agencies where they could get appropriate training and SUPERVISION.

I personally resent being the un-involved Co-Broker who has to conduct the training because so often they don't have a clue and are walking time-bombs. No sharing of Knowledge; No Knowledge of one another or one another's Listings; No Teamwork; No competitive spirit; and No Production. 100% of nothing is nothing.

Remember, the Broker is still vicariously responsible for supervising the entire Sales Staff. This is not a business for Hermits. Maybe your model will be the exception ? Let us know.

compare apples to apples. 50% of nothing is nothing as well, but when you do have a transaction, you make half as much as you could have made at 100%. paying a broker 50% does not mean that you will close more deals. i get better support at a 100% company that i had when i started at a 50% company. support and training is not guaranteed just because there is more money paid to the broker.

Very True!
There is also the the paid training option which is usually cheaper than giving 50% to your broker. Most associations offer training classes on just about every subject you can think of to assist agents.

Vermont007,
As far as your lack of Team concept you could not be more wrong. One can develop their own Team of professionals that do not have their hand in your pocket.
My title company closing agent does everything that an in house closing coordinator does and does not charge me for the service.
My favorite mortgage broker handles everything loan related.
I give my clients a list that includes inspectors by type, real estate attorneys, appraisers, surveyors and any other professionals that may be needed to bring the deal to the closing table.

If you cannot get a question answered by your broker then there is always your state associations legal hotline that will answer your questions free of charge.

Regarding the co-broker education well that is just one of the things you must do if you want the deal to get to the table so you can get your check. You may not like it but it must be done...kinda like paying taxes!

i would look into a franchise zephyr. Why reinvent the wheel. Franchises are so cheap now that you can start off running rather than start off stumbling over yourself trying to reinvent the wheel

The real problem is agents who become broker beleive getting all these agents in will make them alot of money. You bring in alot but alot also goes out as well. Did you know new brokerage start ups have a higher failure rate than 1st year agents???

It's kind of like everyone says go to college. I know many millionaires who never finished college and didn't want to be stuck in a box. Personally what I do is my investment deals and my goal is to eventually have an ownership stake in a shopping center with a big anchor and work up from there.

You have to decide if you want a bunch of agents and problems or do you want to run your brokerage a different way.

VM Group, do you have an assistant that handles the paperwork or reviews files for your agents? I'm considering a model similar to yours, only possibly have virtual offices for agents to take clients.

Right now I handle mostly REO's and I have an assistant who handles most of the paperwork and we still get buried! Any information would be helpful

Thanks

I would not work for a brokerage based in home and I don't the aggressive split is the most important for agents. It is importnat what structure you will have, training and support.......here is the key SUPPORT. It depends what people mean under support, think about that.

Some people do not need support. For established agents who have a good sphere of influence they do not need a name brand like Coldwell Banker or Re/max.

I do not see the benefit of giving any percentage of my commissions when I did all the work in acquiring the lead.

Just my 2 cents.

I think it depends on the type of agents you intend to appeal to. Some agents need an office to go to for the "socialization" with other agents. Other agents are fine working from home with minimal interaction. If you can appeal to the latter type of agent, you will do fine.

Agree 100% with ya Mr. L

I offer both in my brokerage. I offer 100% and splits. So far no one has taken me up on the 100%. I supply all the leads to the split people.

WOW! "I supply all the leads ..... "; I guess they don't generate any business for themselves!?

Associations may be a good avenue to explore. These organizations will address many of the thoughts, questions and concerns you'll inevitably have as well as many you haven't anticipated yet. See the source box for some relevant links.
Research, research, research – this cannot be stressed enough. Read as much as you can about the industry. Here are some book titles that are relevant:
* Start Your Own Freight Brokerage Business by Entrepreneur Press
* A Practical Guide to Transportation and Logistics by Michael B. Stroh
I also posted links to some free articles in the source box.
Hope that helps! I wish you much success & happiness in all your ventures.......!

What are the conditions for 100%??

I think brokers are seeing opening offices as the next logical step.


The sad truth is it's kind of the myth of rehabbing properties wil make you rich.There are a few who do awesome and most scrape by.

If you are going to open your own brokerage I would strongly recommend using it as an investment tool. In other words buy an office building and use one level and rent out the rest. Use other people to pay off your assett and take depreciation.

Another option is buy an older house on high traffic road frontage and put your real estate office there.You will get high traffic and exposure.It's like using a house for a billboard (attorneys love to do this).The more level the land is and the bigger the lot that comes with the property the better.

Example you buy an old 1950's house and renovate it for your office.The road count is 12,000 cars per day according to the DOT. Fast forward 5 years later and development is ongoing and everyone and there brother owns a real estate company.You just aren't making the margins you use to.The traffic count has increased to 21,000 cars per day and commercial is popping up everywhere.

Now the house you bought for 150k on 3 acres you can sell for 700k now to a developer.

You have to always have multiple exit strategies and ways to profit from your investment to stay ahead of the game.

How do you know where the future growth is going? Easy look at the master land use and future growth maps and projects going in or rumored down the pipeline.Future road widening and DOT projects is a key indiciator as with the widening they expect that road to become a big artery in the future.


Sorry for the ramble but I LOVE investing in real estate!

I am considering obtaining my brokers license so I can handle all of my transaction from start to finish. I initially started my with a large broker and now work for a discount broker where I handled the vast majority of the back end work. I have my own POB where my mail is delivered and have to schedule client meetings outside the office. I'm not interested in having other agents under me just want to handle my own deals. Can anyone provide me with the pros and cons of this. Thanks!

Several of us on this forum are one person brokerages. Many, myself included, will never go back to another broker for sponsorship. I don't recall seeing any posts where someone tried it solo and then gave up, going back to another agency but if there are then maybe they will speak up. As far as I'm concerned the benefits far out weight the problems.

I'm a two person brokerage run out of my house. My associate broker is out of his house for the most part. Once in awhile I toy with the idea of joining a larger company, but then these two things bring me back into my senses. 1. I will never get truely 100% commission at a brokerage you don't own. You always have to pay something to the company. I currently just pay my little bit of advertising, dues, EandO and license stuff. I would have to pay that anywhere. 2. Loss of control. I couldn't ever make quick decisions on a whim without checking with someone. Oh there's 3. I would have to talk to other Realtors in my office and be nice.

I am curious how those of you that are solo manage without office support staff. In my rural state I am frequently out of cell phone range and haven't yet come up with ideas for dealing with this.

I don't have much cell 'phone coverage either though I do carry one to call out from in areas where I can get a signal. I rarely give out the cell number (though sometimes when I call out from it others will capture it with caller I.D.). I have a recorder on the 'phone at the office; if they can't wait long enough for me to call them back then we probably aren't going to do business anyway. Most of my communication is by e-mail (at the office, I won't take it on the cell 'phone). Even faxing is becoming less important now that scanned attachments can go on e-mail or information submitted to listing client's (I presently am doing REO only so they are corporate clients) web sites.

Freezengirl, I think the answer to your question depends on the type of brokerage you’re running. Mr. Foreclosure brought up some good points and I think that for the REO portion of my business, I could mange without much staff, since most banks have their own back-end communication procedures. It is funny that you brought up phones, because I've been thinking that I have too many. I use a cell phone for business and personal and realize that too many people have the number. I’m working to get it off of all printed and online advertising. I also use Vonage as my main office line- which provides me with a voicemail that holds 100 voicemails and has some useful forwarding and transcribing features. I also use a mobile email device – my clients and staff know to use that to reach me quickly. One of my clients has asked to be texted for routine communication, so I use that, too. That being said, I do also use some support staff that also work from their own home.

DITTO!!!!

Freezingirl, I am working this out myself right now. I am not in a rural area, but I want to have more flexibility than just a cell phone offers, (forwarding etc) Right now I am looking into a virtual 800 number service. www.tollfreefreedom.com. I like the idea of multiple voice mail boxes for property status or whatever, but the caller can always transfer to me