I have looked at five well known brands very closely. Believe it or not, I like a regional brand office better than all. Would you pursue a local brand or is that crazy? Would you ever consider being a companys first franchisee?

Sure. What I have learned is that the brand/franchise does not mean much. I have been to offices in the same franchise that run/feel completely different. What you get from an office is more a function of the office manager and the agents than anything else.

I just hooked up with the Intero office in my area and my office feel is totally different from the other Intero offices in nearby cities.

R

RebelBroker,

I've heard a bit about Intero. Would you mind expounding on the model they use?

we are going for our franchise license and our franchise consultants say that the real estate industry has no brand name anymore. The days of paying remax or keller williams or C21 40K in initial franchise fees just because of their brand name are over. That is why tech leaders like the VM Group are a hot sell. We havent even got our license yet and we have at least 4 market centers waiting to start up

There is a company in Chicago with over 600 agents, the agent either pays $75 month and keeps 100% of the commission, plus gives company back $225 per closing side for E and O and admin costs [company schedules closings and does paperwork, also takes messages and schedules showings], or no costs per month except $15 technology fee [to be on their website and have your own], and you keep 90% of the commission. Agent pays all their own MLS fees, advertising, pays for signs, etc. Anybody elswhere in the US have this same deal offered?They are adding agents at a rapid rate..and expanding their business to the suburbs.

yes, but its better than this.
I have no monthly fee and 95 per transaction and I keep 100% of the commission. We have voicemail, agent website, free yard signs.

Who sets appointments, do the requests go right to your voicemail? You set your own closings?

my brokerage charges 450 a month and a 195 admin fee per transaction. e and o is paid by the agent yearly at a rate of 350 dollars. you get 2 months free if you pay for the whole year at once.

if i do say 1 transaction a month each month on a 300k house and say i list at 5% with a 2.5 co-op and 2.5 to my broker. using the numbers from the previous paragraph i would make. 90000 take away 7190 for my e&o,admin fees, and 10 months worth of monthly fees. the admin fees can be charged to the buyer or seller but for our demonstration i have the agent paying it. the net to the agent is 82810.


use the same numbers with the different plans and figure out how competitive your companies are compared to others.

that 225 per transaction with a 75 a month fee would be the company of my choosing if it were in my area. that sounds great. and with 600 agents the broker makes 45k a month even if agents do not produce. great deal for all sides of the fence(agents and brokers).


proreo,
95 per transaction. could you point me to the direction of the company website. i am very interested in learning more.

there is no way a company can give the proper level of support and benefits charging $95 per transaction. The required insurance alone exceeds that amount. I cant imagine a company like that lasting too long

that is why i would like to see how they have things setup.

Where I work, $50 p/month, $300 p/closing. Agents pay for Signs, Ads, E&O etc. Office space depending on size from cubicle to large office $50-175 p/month.
Our Company is located in 5 States, looking to expand into 3 more soon.

sounds like a great place to me. i like that setup.

I pay $69/month, $239 first transaction of each month (so max would be $239*12=$2,868/year), $40/E&O on each deal. Other than that, I get 100% + copies, faxes, set up on brokerage P2A Site, various internet based & in-person training (optional), & (surprise surprise) my broker actually answers the phone when I call him.

Using the numbers from estatereal's example it would work out as follows:

1 $300K sale at 2.5% = $7,500 minus $279 (transaction fee & E&O) puts it at $7,221 gross to me X 12 months = $86,652 (and if I do more than one sale/month, I only pay the $239 on the first one).

pikes peak and ManFromTheBand,

if your brokerages were in my area, i would be there in a heartbeat.


we were 450 monthly with no admin fees(which is really great),then they changed it so that admin fees are 195 per transaction.


e & o is paid annually



in my area there is pretty much no 100% broker that is more competitive.

The franchise from Chicago you can check out at http://www.majoronline.com.That is the one with $225 per transaction and 100% keep after $75 per month admin or 90% keep with no admin fee.It's been interesting seeing all the other programs available.When I started in the business everything was a standard 50/50/.My how things have changed since 1976!!!

There is another RE company here that offers $100 p/month, $100 p/closing and they pay for marketing, at least that's what they told me when they tried to recruit me. As with my company, you keep 100%.

Why Franchise. Just start up your own thing. My office is larger and more productive then any Re/Max, Coldwell,Exit in my area and over 3 times the size of the C21, ERA, and many others in my area. And without all the franchise fees, office fees, loss of control, etc. I don't understand why people think they need to buy a NAME. These big companies are all a thing of the past. There model is not working any more.

Greetings Everyone!

Although I agree that a BRAND/NAME isn't required to be successful it will be a long time before these gorillas go away. There is still the possibility of adaptation but only time will tell if adaptation is a profitable model for high cost operations.

Things will definately change in 2008 and the current slowing market with tight lending will facilitate change.

I have a coldwell banker office 4 blocks away from my office. They have just over 200 agents, a huge office and I'm sure a huge overhead. Most of there agents are new just out of school. There office of over 200 agents closed 17 in the last 30 days. How does over 200 agents close 17 deals. How does an office that size get buy on 17 closings a month. We have just over 3000 sq feet of office space and my total overhead is less then $12,000 per month including all payroll and we closed 72 in the past 30 days with about 1/3 the number of agents. I think the big franchises will have to change there model or go out of business.

UTREOBROKER --

What is your business model? I see posts about results but not how you are structured. Care to provide insight?

I charge $495.00 per transaction + $50.00 per transaction for E&O. There is no monthly fee. I will not hire new agents or top producers. I don't want to baby sit and both require some of that. I check agents stats and make sure they have at least 12 transactions in the past 12 months. I like the agents that close between 12-36 per year. These are the agents that are sick and tired of the splits offered by most or the franchises. They know what there doing and don't require much from the broker. The nice thing is it's very easy to get them away from there current broker with as much as one email from me.

UTREOBROKER, I believe the brokerage model that allows partial or complete virtual office is a necessity in the future.
My recent experience with a group of business investors proves the same.

The investors ( seasoned agents and brokers ) wanted to require a monthly fee of $120 for each agent to cover overhead and I wanted $0 monthly fee and $x per closing for agent flexibility. Additionally, I wanted to reduce monthly overhead for the company and eliminate overhead for agents. We walked out of the room with disagreement.

I can't begin to imagine the challenges faced by traditional brokerages with $10-30,000 monthly overhead.

I went to a closing at a title company last week that's in the same class A office building as a Coldwell Banker office. They must have about 15-20,000 sq feet. As I walked down the hall past Coldwell Bankers office to the title company I could see there sales floor throught the glass and they must of had 150 desks in there with only about 5 agents in the office. What a huge waste of money.

What property do you sell sitting in the office? Very little. To be successful, you have to be out showing property and prospecting face to face.

That said, I just picked up a couple of very nice leads on my "phone duty" time today. But sit there 40+ hours a week? Plus imagine the bedlam of that many Realtors and their cell phones all in one confined space like that...

UTREOBROKER -- maybe I didn't phrase the question correctly. Clearly compensation is part of the mix. But, what do you offer your agents?

I don't have a clear picture of your setup, tools, etc.

Utreobroker it all depends on how the offices are setup.You cater to middle of the road agents and have the trans fee.

So by your numbers 495 by 72 transaction is 35,640 gross-12,000 costs=23,640 NET

Say coldwell banker appeals to new agents and signs them to there first transaction on a 50/50 split.Say the average sales price is 200k at 3 percent times 17 transactions you would be looking at 51,000 to the brokerage.Even if there franchise fees and cost were 26,000 they would still be at a NET of 25,000 with less transactions.

I know companies that cater to new agents and it's all they do because they know the agents will usually sell 1,2,3 properties ont he fat split before they give out.So if you can constantly run amill of new agent at 50/50 and 60/40 splits you can make fat profits with fewer closings and that's not even considering if some of those 17 transactions the agent were double ending the deal which in your scenario an agent double ending would only pay you the 495 regardless.

Different models out there for sure.I don't know if you coldwell runs that way but we have a metrobrokers/gmac and all they like to do in our area is recruit new agents for fat splits.

The real question is client conversion.

In this slowing market where millions of sellers have thin equity the brokerage model that wins is one that allows agents to convert and close more sales. Agents need to ask themselves which brokerage split allows them to be most flexible.

Super Realtor raises an excellent point. For every 72 transaction side closing at a $495 fee brokerage will 17 close at the higher split brokerage? If less I'd stick to the $495 model. If greater I'd choose the higher split.

UTREOBROKER, do the agents frown on getting these emails from you? Do you get any negative feedback from doing this?

TrueVisionary...

The problem with UTREOBROKERs business model is there is no means to expansion. It is not a franchisable concept, even adding branch offices or certain licenses will be difficult. One lawsuit will wipe you out. Work hours are high and profits are low.

We already have a 3 year old office in Litton Colordo that's doing great, but we are not about franchising. The Colorado office belongs to a friend of mine that used are sysetms, logos, etc. to recreate what we have done with little cost to them. We did not FRANCHISE the office to them. Just showed them how to get going. I don't see how VM Groups business model is much differnt then any other 100% offices out there. I don't see anything that wows me about it. Seems that you think you have this great system to put out to the world. It's way to easy for anyone to start up just what you and I have already done with little to no cost to get started. We use to charge a monthly fee to our agents just like VM Group does. All your doing is stunting your growth. Drop the monthly fee and only let agents that have a provin track record join. Your office will grow very fast.


As far as sending out emails to agents. I do get a email back from time to time that says "go eat glass and die" but this most often from the broker of the office whos good agents are leaving to come to my office and there pissed off. That's fine I know where the delete key to my email is.

As for the Coldwell Banker office question from Super Realtor. That may be true but the cost of the office space that they are in is far more expensive. The first year I was in business I worked for a GMAC office. I know there office lease alone was $32,000 per month. That was years and years ago. Class A space here is $35.00 per sq foot. That's alot of empty office and money to chuck out the window every month just because there new agents. This type of model will not be around to many more years.

I keep hearing about different companies doing new splits.
Anyone know about Allisonjames? They are offering a similar deal in my area. But...who do you go to for help? I sure would like to be able to keep a better option than what I have now and put my money into marketing/web etc...Keller Williams offered me a 70/30 split but you pay 34,000 a year to the company; before you get the 100 percent. Anyone care to share their best split?

My Weichert office is a sliding scale split, starting at 50/50 and going up to 65/35. Once you reach the higher split you stay there, rather than reset every January like some offices do.

This office doesn't charge ANY desk fees, though that will vary from office to office, as each Weichert franchise office is independently owned (Not sure how a Weichert corporate office works...they probably charge a desk fee.)

I was totally shocked to learn that some offices in this area charge a desk fee PLUS give a crappy split, one of them is 30/60 (30 to the agent) and another one is less than 20! I know that there are offices in my area that give splits of 70 and even 80 percent, as well as a couple of RE/MAX offices...I have to wonder how those other offices with the really crappy splits get and retain ANY agents!

sliding splits and pyramid schemes are a thing of the past, go with a broker who offers a flat fee but still provides LOTs of benefits

They may be a thing of the past in your market...but not in mine.

If you want LOTS of benefits you have to PAY for them. lol

wow anyone know of any deals like this in the portland metro area.

My office has over 21 benefits for realtors for $299/month. If the realtor were to go out individually and get them on his/her own, it would cost more than double that cost.

299/month and 399/transaction at the VM Group

250 monthly
195 admin per transaction
180 yearly e&o

69 monthly
275 admin per transaction

80/20 split, no desk fees, $125 per transaction for E&O, $200 annual technology fee. Each affiliate pays for own signs (~$250 for 10), business cards, lockboxes.

My office charges $30/transaction for E&O until the policy is paid, no annual fee, and they buy signs and car magnets. MLS provides lockboxes. You buy the riders for your signs (about $4 each) if you want them.

There are ways to promote a great idea than mere franchising. Microsoft was done a fine job with a concept called licensing. You can license a system, software, trademark and other benefits without entering the high cost and high liability field of franchising.

Franchising made perfect sense when given area exclusivity. However, with the internet, territorial exclusivity limits growth.