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#458761 - 08/14/17 01:05 PM what are Brokers paid when their license is used for the office?
Investor_broker Offline
Junior Member

Registered: 04/26/16
Posts: 5
Loc: New Jersey
Broker here.

I'm considering being the Broker of Record for a small office, but as a silent member. They just need my license to operate the office. I'll have oversight of the transactions, etc but I won't be involved in the day to day operations.

What type of splits/compensation are common in this scenario for a Broker?

What agreement do you have with your Broker of Record?

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#458763 - 08/14/17 11:50 PM Re: what are Brokers paid when their license is used for the office? [Re: Investor_broker]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7719
Loc: Vermont's North-East Kingdom
Who'll cover your Court Costs when you get sued for what you're "not involved in" ?
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#458764 - 08/15/17 01:21 AM Re: what are Brokers paid when their license is used for the office? [Re: Investor_broker]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2238
Loc: Outer Banks
You will be held libel for the actions of the agents and for the trust account so it better be worth it. I would not do it unless i had access to the trust account to be able to keep track of it.

how much business does the office do? Is it just sales or ptoperty management? Rental trust accounts are the ones most companies get in trouble over.
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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#458775 - 08/15/17 06:51 AM Re: what are Brokers paid when their license is used for the office? [Re: Vermont]
Investor_broker Offline
Junior Member

Registered: 04/26/16
Posts: 5
Loc: New Jersey
Originally Posted By: Vermont
Who'll cover your Court Costs when you get sued for what you're "not involved in" ?


Yes it's a risk but truth is it's a small risk and the office doesn't do major production. It would be covered by the office. I know the owners and they know this expense wouldn't come out of my pockets.

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#458776 - 08/15/17 06:54 AM Re: what are Brokers paid when their license is used for the office? [Re: Bigtoe]
Investor_broker Offline
Junior Member

Registered: 04/26/16
Posts: 5
Loc: New Jersey
Originally Posted By: Bigtoe
You will be held libel for the actions of the agents and for the trust account so it better be worth it. I would not do it unless i had access to the trust account to be able to keep track of it.

how much business does the office do? Is it just sales or ptoperty management? Rental trust accounts are the ones most companies get in trouble over.


It's just sales and I don't use the trust account. Agents can use their attorney trust accounts for deposits. One less responsibility for me.

Office is small, we do about 50 deals a year.

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#458777 - 08/15/17 06:56 AM Re: what are Brokers paid when their license is used for the office? [Re: Investor_broker]
Investor_broker Offline
Junior Member

Registered: 04/26/16
Posts: 5
Loc: New Jersey
Anyone else have feedback on a typical Broker split?

I thought this would receive more response, what do Broker's get paid out there ??

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#458780 - 08/15/17 07:51 AM Re: what are Brokers paid when their license is used for the office? [Re: Investor_broker]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7719
Loc: Vermont's North-East Kingdom
Originally Posted By: Investor_broker
". . . I thought this would receive more response, what do Broker's get paid out there ?? . . . "

In my book, they get paid everything that's not given to someone else . . . . Gross Commission Income less all Expenses.

But in your case, you'd be working for someone else who actually owns the business . . . . so you ought to expect an over-ride on everyone else's Commission; otherwise you're just like any other Sales Agent, and you make your own deals and collect your own Commissions (less the Company's split). They may not even expect that you'd actually want to be paid for the "usage" of your License just to legitimize the Office by having a Broker-in-Charge, like a Straw Man.

Originally Posted By: Investor_broker
". . . Agents can use their attorney trust accounts for deposits . . ."

That works only for deals that have evolved into actual Contracts, not those that are in the twilight of negotiation. Attorneys don't want to be involved in half-baked Offers that never turn into actual Contracts, or in Contracts which have contingencies that have yet to be satisfied.

Have you worked as a Broker before, or owned an Agency ?
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#458781 - 08/15/17 08:54 AM Re: what are Brokers paid when their license is used for the office? [Re: Vermont]
Investor_broker Offline
Junior Member

Registered: 04/26/16
Posts: 5
Loc: New Jersey
Originally Posted By: Vermont

They may not even expect that you'd actually want to be paid for the "usage" of your License just to legitimize the Office by having a Broker-in-Charge, like a Straw Man.


I'd expect to be paid for the usage of my license. Afterall, that's what enables the office to operate. And I'd expect a low flat fee per closing rather than a commission split on my personal deals.


Originally Posted By: Vermont

That works only for deals that have evolved into actual Contracts, not those that are in the twilight of negotiation. Attorneys don't want to be involved in half-baked Offers that never turn into actual Contracts, or in Contracts which have contingencies that have yet to be satisfied.


Good points, being a smaller office, I wouldn't accept earnest deposits into the trust account. In all of our deals, the initial $1k deposit is not included.

Originally Posted By: Vermont

Have you worked as a Broker before, or owned an Agency ?


I'm currently a broker at a smaller office, but looking to move onto something else. Reason for this post is to better understand what type of arrangements other brokers have.

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#458783 - 08/15/17 11:27 AM Re: what are Brokers paid when their license is used for the office? [Re: Investor_broker]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7719
Loc: Vermont's North-East Kingdom
Originally Posted By: Investor Broker
". . . being a smaller office, I wouldn't accept earnest deposits into the trust account . . ."

That may, or may not work . . . . it depends on how New Jersey Law is written. You may not have a choice.

Here in Vermont, Good Faith Deposits MUST be deposited into the Agency's Escrow Account immediately or within 5 days of receipt, regardless of whether an Offer was accepted or not. They cannot be left un-processed in someone's briefcase.

The thought is (or was) that this benefits the General Public because the sooner a check clears, the sooner the Broker can be expected to write a check for the Refund . . . . no Excuses, no delays.

Many people are licensed as Brokers, but it's "in name only", and they simply continue perform as Sales Agents, still working for another Broker . . . . a real Broker or Owner. There's a big difference.

Among other things, I've been a Sales Agent, a Broker working as a Salesman; a Broker-In-Charge for a Branch Office of another Brokerage, and then for the past 20+ years, a Broker Owner of my own independent Agency. Each function has its own set of responsibilities and rewards that vary (or should) accordingly.

I would certainly shy away from allowing my License to take on all of the vicarious responsibility just so another un-licensed or inadequately licensed person or Corporation can profit from my credentials.

The compensation would have to be substantial. Negotiate a good employment Contract for yourself; I doubt that there's a template that would be useful in your unique circumstance. Will you be responsible for hiring new Agents, training, education, and on-going supervision ?

When you said "I'll have oversight of the transactions, etc but I won't be involved in the day to day operations"; it seems somewhat contradictory. Did they give you a Job Description ?

Was this position previously occupied . . . . and can you interview that person ?
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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