Just some background:
I have been in the business for 11 years and have been associated with several franchise brands.

I want to open a virtual office. I will have an actual location but very small just to comply with State rules. I can't decide which route to go to appeal to a large number of agents.
1. Give 90% split to agents. NO annual fees or transaction fees.
2. Give 95% split to agents and charge a $50 to $75 monthly fee.
I will have a showing center for all appointments and the agents will have to pay the standard $25 per listing fee that the company will charge me. They will not have office space and will have to work from home. I will not provide any marketing/advertising.

My goal would be to have 25 agents within the year.

Thanks in advance.

#1 is my vote. you will have more overhead, costs and time demands than you anticipate and the more $$ you can bring in on your side the better.

You have to know what everyone else is doing in your area.

My area is the metro atlanta county area in Georgia comprised of over 10 plus counties.

By looking through my mls roster I know which companies are the players in my market. There are about 25 companies that have 75 agents or more. The rest are mom and pop deals.

My program is pay only when you close for 299.00 a transaction.Most agents eek out a few deals here and there so they want the least amount of monthly costs possible. The other agents are what I call LIFERS with their companies. They bleed those colors and won't change for anything. That's ok as there are plenty to go around who want to save money with my virtual brokerage.

So before you go marketing to them do the local research and see what they want. You want to make the right impression the first time around.

I agree completely Super. There are the standard big 3 here...Coldwell Banker/REMAX/Prudential. Some of those agents, as you said are "lifers" and will not join and I would not even try to talk to them.

The average number of closings per agent in 2007 was 6 per year. I have not done my research but I would assume that has fallen to 4 a year now.

I like the idea of a small monthly charge because that brings some money into the coffers but want it low enough that the part timers don't get scared away.

Super, how many agents do you have?

Thanks.

You have to really know what others are offering. In my area there is (1) 100 percent company that has offices etc. and you pay 65.00 a month plus have to pay yearly e and o. They have about 2,800 agents.

If I charged a fee most agents would see the potential savings as minimal.Plus the agents don't like monthly access to their bank account and if you take credit cards you will pay a processing fee for that.Not to mention for the small fee it will create alot of extra paperwork and account managing.I beleive there are other ways to make more of a margin.

Anymore info just pm me.

One of the key things besides e&o is: Who is going to review agent transaction files? If you have lots of agents, you will probably want to hire someone or contract that out, and of course need a fee structure that covers those expenses.

I already have that built into my business model. Once I hit a certain threshold I already have a broker associate who I will hire full time.I have other profit centers built in which I won't go over on here.

With my model everything is ran really tight to preserve margins.

People belonging to my company won't see top producer awards and all that stuff.Basically everybody does their own thing monitered by me the broker.

100 closed files a month at 300 a pop is 30,000 in revenue plus my other profit centers. I am virtual so I am not dropping 5k or more a month in a building for agents to drink coffee,eat donuts,and sing koombyah.

There are some that need those things however there is a huge tidal wave of agents who feel they can work from home,or do work anywhere there is internet access.Meet people at restaurants,coffee houses,whatever..

The future is going to be able to transact business anywhere. I have a mobile closing attorney that will go wherever to conduct a closing. Buyers and sellers love it to death.

Why not offer a menu of options. This way you will appeal to more agents.

I'd like to learn how many agents you have signed up and what the response has been to your business model. If you will share that info with us that would be great.

The last month or two I have been setting up my business model. I have actively been pursuing it the past few weeks. I am splitting time between my commercial deals and starting this up.

Generally from the point of inception agents don't make a switch right away. A few do but most take about a month or so to stew over it.

As far as a menu of plans that is shown to just not work in my area. It's just too much to keep track of. I have 2 plans and one is for agents eeking out a few deals a year and the other is for agents doing more than one deal every other month. Which plan works best will depend on their transaction volume.

With what I am doing I don't want to get into specifics.

I am leaning towards a $50 monthly charge and a $250 transaction fee. I don't like a menu of options, it makes things too difficult to track. If agents are really against the monthly fee, I might charge them 95% with the transaction fee or something similiar.

Charge them 95% ? . . . . Don't you mean 5% ?

If people are working for 5%, then things are much worse out there than I've been led to believe !

Oops...Yes you are correct...

I would say work on your own and forget about getting agents.

If you were considering expanding your team, then agents are a great idea. If you are bringing agents in to make money or to increase your visibility, charge more than 5%!

Now, this all hinges on your own productivity as a Realtor. If you make a lot of money selling real estate, trading it off to manage an office is silly. Even if you think you can hire someone to manage agents, it will ABSOLUTELY still take time away from you and your ability to pull the same production. If you are a moderate producer, then perhaps it is worth considering. If you are a low producer, but a great motivator, then go gettcha some agents!! Great motivators are hard to come by, just the same as being a high producting agent. Both are a rare breed that should be appreciated.

I recently got an email from an agent at my office saying........."i have been negotiating a sale, but had to forgoe my commission in effort to make it work. If this is a problem, please give me a call" Seriously!

Of the two, I like #2 better, because #1 doesn't protect you if they don't produce anything at all. Even then, I'd say that #2 is too cheap and that a desk fee should be 2 or 3x as high.

In both cases, if your only point of differentiation is price, I wouldn't count on having any loyalty from agents and would tend to agree with "REOsRock" about just selling houses yourself. That pricing model will barely pay for itself, and you'll pick yourself up more headaches than profits...

BTW: Hi to "BigToe"! I'm on the Outer Banks right now on vacation. (in Corolla)