Agents, pick your paycheck

Realtor Notebook

By Teresa Boardman, Tuesday, December 29, 2009.

Like most real estate agents, I get postcards in the mail from real estate companies that are recruiting agents.

The postcards are pretty much the same. They promise that if I go work with the company, I will get to keep more of my commission and that I will pay lower fees and I will have more opportunities and get more business. They all have state-of-the-art technology and training, too.

It never impresses me when companies advertise that they are less expensive. In some cases those lower fees and higher commission splits mean more out-of-pocket expenses. I look at the list of what the company provides and I rarely find anything that I don't have already.

Why would I want a free template Web site when I already have Web sites? Anyone can get a cheap or free e-mail account, yet e-mail accounts are used as selling points, too.

I already have a phone and it fits in my pocket, so I don't really need a desk in an office to put it on, or another phone line to have to check for voicemail.

Free copies are nice, but I know how much a copy costs and am not willing to give up 20 percent to 60 percent of each commission so that I can have free copies.

The $30 dollars a month that I spend on copies at the local copy shop doesn't add up to much, and I save time because the copy shops are close to home and they will make the copies for me and have them ready for pickup when I arrive.

If I have to pay for services that I don't need or use each month then it doesn't really matter how inexpensive they are -- it is still an expense that I don't need to incur.

There are a couple of common business models for real estate companies:

There is the model where the company takes a huge chunk of your commission but gives you a place to work, a phone, a front desk, unlimited copies, a bunch of software, and access to a manager whenever the need arises. The environment is almost like corporate America, complete with meetings and co-workers, office gossip, parties and events.
Then there is the model where the company lets you keep most of your commission but it gives you nothing unless you pay for it -- and everything seems to be more expensive than it would be if you bought it yourself.

I have learned something important this year: having lower fees makes a difference in the bottom line. After changing real estate companies, my commission splits went up and my expenses went down. I no longer have some of the services that I used to have, but I was not using those services; I was just paying for them. ...CONTINUED

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

You must login or register to post a comment.

Submitted by Brian Block on December 29, 2009 - 1:55pm.

Theresa,

Now is especially the time of year that many agents are looking to make a change as they look back on their gross and net revenues from the previous year.

It is also a busy time for recruiters and brokers who are recruiting experienced agents. I've been experiencing that here for sure.

You mention the two models, which are basically correct. However, I believe there is a third, the one my brokerage offers:

• The model where the company lets you keep most of your commission but it gives you many tools and services for free and others at very low cost, less expensive than if you were to pay for it yourself.

Maybe not a model, since although it has worked very well for us, I haven't seen many instances of it being replicated.

Best wishes for 2010!