HI - i just came up with a potential idea on the way home from walmart..lol so excuse me if its completely weird .

OK we need to sell our house in early spring and get a bigger place.

I'm also looking to become a real estate agent but unfortunately do not have the capital I need to start.

My house will hopefully sell for about 215000 if I use a realtor. I was thinking about FSBO before but not ZI'm not too sure.

Anyway.. would it be legal and do you think anyone would go for this if I wanted to talk to a couple agents and see if anyone would do this -

they be my agent to sell this house and buy a new one and they agree to pay my costs for 1 yr (or 2 maybe) to start as an agent?

Because they will end up making at least 6000 on my house (ave % around here is 6% so if they dont find the buyer then they get 3%). then they';d make at least that much on the house I want to buy.

I need about 3000-3500 to start my business - covering technology fees, principles/practices course, desk fees, e & O insurance, training, a website, mls fee, realtor board fee

So they would obviously make out in the deal money-wise and the incentive for them is that if they don't do it I'll sell my house on my own and use that to do everything, which means they get squat. I would end up with the short end of the stick obviously as they get minimum 12000 from me and i get 3000 - but otherwise I probably won't be able to do any of this for a yr or 2 - hard to save 4 grand on a fixed income.

I know there are a million laws about how agents do things, so just wondering if this is something anyone knew about. And maybe if it couldn't be a part of the agent gareement maybe we could get a lawyer to write up the agreement separately.

Any ideas?

Thx
Rae

I will take the initiative to answer your questions.

First, you need to look at what the agent will make if they sell your house. You would be listing it at 6%, so the listing agent would make 3%, then they would have to split that with their broker. So let's just say for arguments sake that the agent only really gets 1.5% in their pocket before deducting any costs associated with advertising your home. 1.5% of let's say $200,000 is $3,000. The listing agent will most likely make about $3,000. And that's including the costs they spent to market your home! Let's now say that it cost the listing agent $500 to advertise your home along with fees and costs associated with being a Realtor, and taxes are going to be about $1,000 too. So now the listing agent really only made about $1,500 profit on selling your home!

What part of that $1,500 would you like them to give you?

Now if they brought the buyer also, then that would be a totally different story. Let's assume everything costs them double because they are working for the buyer too. That would include a few more costs, like driving around to different homes, etc. They would make a whopping $3,000 after all said and done!

Now this is all going off of a 50/50 split with their broker. But I am sure you get my point.

OK.. I see your point.... the agent/broker split thing kids iof screws that all up

Thanks for responding

If you want to get into real estate, why not go with a broker who doesn't charge desk fees, but who offers a 50/50 split plan? Then you will only be out the course fees and license fees, plus the board fees. My suggestion is to do this, and then sell your own house. The commission you make on that sale, plus the purchase of a new home, will pay your costs.
In the meantime, you will be making money selling other houses/property.
You can do this part time, like I do, while working another job.

working real estate part-time is very tough. if you want to make a living from it, then i would go to a large company because they have better training. if you are looking to just use your license to sell your own home, then just go anywhere. but understand that real estate school will not train you how to be an agent and what kind of paperwork there is. they just teach you how to pass the exam, thats it. so you will need some kind of training if you do it yourself, or pay someone to help you.

Thanks. I went to another broke's office today to learbn about them and this one didn't have any of those misc desk or technology fees and they had free training, so i may end up going with them. I was doing the math this morning after some sleep and figured if we sold our own house with me as the realtor we'd make a much better deal then if we did it the way I was looking. Then we could use the rest of the money made as deposit on our new house.... and I'd still make money back on that as the buyer broker...

thx
Rae

First Off, after you have done 2-3 transactions
come back and answer your own question.

Second, it is going to take a lot more than $4000 to start a career in real estate, even part time. There is no way this s enough for 1-2 years even with a 50/50 split at your broker. You still need to pay for advertising, dues, mls, fees, sign installation, gas, marketing, website, flyers, business cards, insurance, etc, etc, etc...

My suggestion would be to get a Realtor to list & sell your home. Honestly you will probably net more money having someone with experience & Marketing Money sell you home (even after the 6%) than going out getting a license and doing it yourself, especially because it is your first transaction!

Why don't you put $4000 less down on your new home to start your business or maybe you could just stay where your at and get a HELOC for now until you start up your business and have gotten a little more experience. Then list & sell your own house..

Good Luck

Another thing to consider as far as selling and buying with you acting as your own an agent -

Some companies have production minimums that need to be met before they will allow you to buy or sell for no commission on your side. Of course, you would be entitled to your 1.5% of both the sale and purchase, but you will probably be 1099ed for it as income.

Good luck!
Betty

HI - Well I'm niterviewing a few brokers and the one I like patys for all advertising as well as signage. The fees I'd have due at the beginning would be the p & p course and then state exam registration fee, the exam fee, then the license fee. The once I pick a broker, the actual license fee, mls fee, and realtor board fee, and then an electronic key fee. All those come out to about 2000. Then I just have ongoing expenses and small stuff along the way - lockboxes, biz cards, gas, etc... I'm not worried about small stuff as I have a full time job - I'm worried about the big fees that are all due up front.

I'm not sure though why you are saying 4000 won't be enough - even if I got my own website to do more advertising - I'm a web designer so I could either make my own or pay for one adding another 500 a year or so - still less then 4000.

If I'm missing something that would add more money to my upfront costs, please let me know.

good to know kokomorealtor ,... hadn't thought about them considering it income, but i guess it makes sense...I asked the broker I spoke to and he said they would treat it like any other deal and i'd make commission off of it and so would they......

but i'm not selling til next year so to wait may make less sense as may have the experience by the time comes for me to sell and a couple thousand once you hit the tax bracket me and my husband are in won't make too much of a difference - if I had a million dollar home it would be another story (I wish lol).

Thx 4 advice

Simple.........

If you are serious about real estate you need a mentor when you start out.

Someone who has been there and made all of the mistakes.This will keep YOU from making as many mistakes and being productive closing deals.

The first thing is do not be everything to everybody.

I have a clear focus which is investment sales and also commercial.

The first year you will dabble in a litlle of everything and determine one field of r.e. that really appeals to you.This is important as if you are just "doing it for the money" and are not passionate about it you will have weak results.

hope this helps........