Hi,

I'm a brand new agent looking for a place to hang my license. I interviewed with a local RE/MAX Broker today and left the interview with "sticker shock." With a 50/50 split, I am expected to pay for all my marketing, b/w and color copies, $200.00/mo desk fee, marketing kit ($390.00), $390/yr to use the Brand name, a $1,800 one-time fee that is taken out of my first 7 commissions, software ($55-130), and business cards.

In addition to all this, $575/yr to be a member of the local board of Realtors.

HELP ME!

Ok, all kidding aside. Are these start up costs typical? I truly have a passion for real estate, but I'm somewhat discouraged by how expensive it is to just get started.

Jo

Wow that sounds really high. I have spoken with a few brokers in my area and they are pretty much all the same. 50/50 split up to a ceiling(lowest being 20k highest being 31k) then going to a 100% or a sliding scale based on commissions. All included free advertising cost with a limit on mass mailings and color copies but all seemed really fair. They all provided signs and the initial set of business cards with the only cost upfront being, local dues, mls access, e&o insurance, and card access. All told about 1200 a year out of pocket and its due at different times of the year. Not saying that what you have seen is the norm or not, but at least in my area it seems high to me.

I have other interviews scheduled over the next few weeks, so I hope to hear something a little more reasonable from other Brokers.

The $200/mo desk fee seems rather high if you're only on a 50/50 split. One of the original appeals of RE/MAX was the 100% commission, with the 'desk fee' and advertising expenses being your primary cost. Of course like all companies they're changing in the face of competition with new ideas.

You can certainly find other nationwide brands with no desk fee. Of course, there are always fees... franchise fees, advertising fees, all sorts of fees. And there is absolutely nothing you can do about that MLS/Board/NAR fee.

A good arrangement for many newbie agents is to find a broker with low fees, BUT ALSO TAKES THOSE FEES OUT OF YOUR COMMISSION.

For instance, you'll be paying that $200/mo desk fee no matter whether you receive a commission check next month or not. How many months will you be able to pay that $200/mo and where will the money be coming from? It will be nice if you have a closing 30 days after hanging your license... but don't count on it.

Wow, now, I know some agents around here who pay a $100/month desk fee and they're on an 80% split.

My office does not charge a desk fee and the split starts at 50%.

Good points Perky!

My general advice to new agents is to worry less about their starting split and more about their starting expenses. The split will very easily get renegotiated once your business picks up and you have more leverage in the business.

The expense side is what kills so many new agents. Desk fees... advertising fees... E&O insurance... MLS fees... board fees (local and national)... business cards, postage, signs, name badges, thank you notes, etc., etc. etc. These all add up very quickly before many agents see their first commission check. Or never see it, as the case may be for more than we'd like to admit.

Hi,

Thanks for all the great feedback so far! I'm not concerned with the split since I'm new. But there seemed to be so many additional fees, which can make it difficult to get started. Fortunately, my hubby works and we make it on one income, but gettting a decent start in real estate could be more challenging than I expected.

Cheers,

JoJo

Because of where I live in relation to county lines, I had to join two MLS systems when I started. $1900 total for the two.

You should interview at least 3 to 5 places before you decide where you want to start. Go with a place that offers really great training. You can always move to a different brokerage later.

I don't know anything about Colorado except you have Ski Resorts like ours and the same White on Green License Plates as Vermont. The ONLY State that occasionally confuses me.

I hope you can find an initial place to locate that takes the absolute minimum out of your pocket BEFORE you have a single Transaction under your belt (and I don't mean accumulating the monthly fees and subtracting them from that 1st Commission).

I think the key is to find a reasonably comfortable place that puts pressure on you to "perform" as an Agent; but NOT as a Profit Center even before you're making Sales. Watching your accumulated fees grow as a debt can cripple your enthusiasm.

To play a little Devil's Advocate here... I find the fees charged by almost all brokers to serve a valuable purpose. It helps weed out the non-performers. Sorry to say it, but I've seen agents come in and take up valuable desk space, spend hours on the phone and making copies, preparing folder after folder using fancy office supplies from the 'free' cabinet, and never or rarely make a sale. Perhaps they are living off a spouse, a retirement check, or a trust fund. I don't know. But some of these folks cost the office much more than they ever generate.

Who pays for all this stuff? The agents actually bringing in the commissions.

You make some good points... But I would rather pay for my own office supplies than be charged $200.00 a month desk fee in addition to a 50/50 split, $1800.00 fee that is taken out of my first seven commissions that pays for "updates to the office, such as the big screen t.v. in the lobby etc." What would I take home after all is said and done.... $50.00? I think the employing broker needs to do better at choosing who he/she hires and expect performance or they can leave. Instead there are probably some agents who have great potential but can't get their foot in the door because they are expected to pay for big screen t.v's.

Thanks so much for your input. I love a good healthy debate.

Cheers!
JoJo

I'm astonished that some offices charge you for voice mail. I can see charging you an administrative fee for the secretary and charging you for office supplies and signs and posts and what not - but to charge you for voice mail too? Come on...that's bordering nonsense...

Im not sure what the 1800 dollar start up fee is? I paid a fee to Re\Max initially, but not that much. The rest of the fees sound somewhat reasonable for Re\Max though. Its not a cheap company to associate with. Each office is different though, so shop around.

I work from a home office so I refuse to pay for the office supplies in my bill (that was negotiated). I chucked out the phone bill as well, I pay for my own. The technology fee ? was thrown out as well, as they call me anyways when something needs fixed or software installed. Offices will nickle and dime you.

The 390/Yr brand name fee is not negotiable. It goes to Re\Max International. I have no idea what the marketing kit is (must be an office thing).

I do think this is a healthy 'discussion.'

What's great is that there are so many different ways of doing business and so many different opportunities to meet all of our needs.

One person's flat screen TV in the office may be a waste of money. The same may be said for fancy digs in a high-end office building with luxurious conference rooms and leather chairs. What exactly are we willing to pay for and why? Who is our target market and what type of office are they looking for?

I'll relate one anecdote about my own search for an office in the area... I interviewed with one broker who has a VERY respected name in this area. When I toured the office, I was shocked at the poor decor... especially the conference areas. It was not a place I'd feel comfortable bringing ANY clients. To make matters worse, an agent had just heated up her lunch in the break room microwave and the odor of Kung Pau chicken was permeating the whole place! Needless to say that office was immediately checked off my list!