Sellsius real estate marketing blog

I didn't see Re/Max or Realty Executives in that list.
Funny you bring this up because writers at Inman News are getting the vapors over commission based pay being a dinasaur.
Commission is here to stay, and there will always be a slice of the pie for this model.

That is how our office is set up in Las Vegas. I couldn't see any reason to go to any other arrangement.

My broker is set up that way and has taken the firm from one office to three in just three years. There are several advantages to both brokers and agents in this system.
1) The broker defines their service based more on personal service to the agent rather than a corporate effort without much benefit.
2) The agents save on splits which can then be used to provide better service and greater marketing efforts.
3) The agents who produce at least two transactions a year come up even with board and brokerage fees. Who cannot produce two transactions a year?
4) The broker doesn't have to worry about "dead weight" not paying fees.
5) Most modern-minded agents realize that they are the producers (not the brokerage) and will look for the best valued brokerage to hang their license. I know when I was on a 25% split and in the business for over a year I started asking what I was getting for my 25% - answer was nothing I saw value in, couldn't find somewhere else, or could replicate for cheaper and with more personal benefit.

BTW: Agents at my firm pay $275 desk (in a nice large office), $25 e&o insurance, and $150 per deal (single or double). That's about 1/5 of what I was paying my old "big national brokerage" for the deal I just did. Do I pocket the extra? No. I put it bak into my business. Other agents not on a similar plan simply cannot afford to compete on the services provided. That is what the real appeal should be to agents.

I with J. Phillip. Call me naive but I thought this might have been a joke post.

I've been in the RE/MAX system for 10 years and have always received 100% of my commission. I pay an office fee plus a "per transaction" fee which I passed onto the client.

The system allows me to be more flexible in highly competitive situations when I'm up against other potential listing agents, it allows me more flexibility to spend money where I think it will do the most good in my business or on behalf of the client. It also allows me to be more entrepreneurial generally.

The employee vs independent contractor debate has been raging for a couple of years now. Ever since the banks wanted to absorb real estate brokerage services. Some wondered why NAR fought the idea. Now it should be plain for all to see.

Banks couldn't even get banking right.

I think the answer...the killer app solution...the new concept that could sweep the nation...is...107% Commission Splits on personally generated biz. Think about it. Get some big pocketed, slow thinking, investors together, tell them you'll figure out a way to be profitable eventually, say maybe through company web site referrals or something like that. Use the investor money to fund the extra 7%, agents and brokers flock to the new model, other traditional brokerages from 50/50 to 100% go bust. When there is little competition, you yank the rug, change the commission structure back to a profitable model and you start making money again.

Could it work?

Now, that's what I call thinking outside the box. Brilliant idea Ken.

Joe, this can't possibly be a new thing. We northern socialist types have had 100% brokers for a very long time. Any other format seems dare I say it - "foreign".

@ Ken - love it :>))

Damn Canadians!

98% of commission, small per transaction fee which includes E & O, Reasonable rent if you take office space, no training program = no rookie environment and a terrific broker. I'm happy!

I've been working in a 100% office with a traditional brokerage, Windermere Real Estate, for almost 20 years. It's the best of both worlds. I still get the benefit of the company with on-going training and good legal advice. We also have one of the benefits that Laurie mentions, no rookies. I'm not against rookies, everyone has to begin somewhere, but our office has all seasoned agents and it raises the bar for each of us. We can and do share years of experience and knowledge. It's made me a stronger, more self-sufficient agent. Paying monthly fees to a broker means only serious agents need apply. Only a few of the Windermere offices are 100% offices. Maybe other brokerages should investigate the option of some "desk fee" offices and some 100% offices.

On a more important note, I love your Lusty Lady photo in the sidebar. The Lusty Lady has been on First Avenue in downtown Seattle forever. There's no "red light" district in Seattle. The Seattle Art Museum is right across the street and in its previous remodel, you had a picture window view of the marquee of The Lusty Lady. The person who writes the ads for the marquee is hysterically funny, always writes something relating to the news, and clearly has some writing talent. The marquee is a local icon and always a good laugh.

20 years?! Oh my. Who pays for the marketing? Do you still do print ads?
Would it make a difference if there was no physical office-- if the firm was completely online?

I am a Windermere agent in Tracy too and not familiar with the amount of the "desk fees" are and what the 100% program is. Can you share?

The desk fees are $100 per month + transaction fees ranging from $500-$1500

The best agents who do the most production and drive the market will work where they will make the most. Therefore, all the non-commission based models will dry up- nobody has ever made it work.
The 100% model will appeal to established agents who don't need a nanny broker.

Hi Joe,

Yes, 20 years! (Gulp) I pay for my own marketing, but it's all online. I think the last time I did a newspaper ad was about 1 1/2 years ago.

I used to be in the office all the time and loved being there, interacting with other agents. Now I find I work virtually almost all the time, as does most everyone else. I am most productive when I work out of my own space. There still needs to be some sort of an office which can be a place for client and general office meetings. Offices should not be eliminated, but reduced in size.

Thanks for the post with my remarks about The Lusty Lady, I will link to that one on my blog!

Thanks for sharing your experience Debra. And thank you for the info on The Lusty Lady-- it make the post more interesting.

Joe

Re your response to Debra on "physical office".

Fortunately someone needs to process the cheques. A new low I admit, but I'm glad for it.
In terms of physical office with equipment, phones etc. I suspect if you canvassed, you might find that most of the 100% crowd have superior tech equipment in their home office. I further suspect that many make their morning calls with a pot of coffee by their side while still in their pyjamas or if they abide by the rules governing full disclosure, no clothes at all. :>)

And I thought I was the only one. Looking in the mirror, I realize why
clothes were invented.

It's true, while I maintain office space, I find myself working in my pj's more often these days, and find myself more productive doing so - no interuptions. The office space is still necessary for client meetings and team interaction, but I feel the need for it less often, a really nice conference room would do the trick, most of the time.