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Broker Bryant is fishing for dollars!!!

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

December 16, 2007 09:16 AM

This week I was contacted by a REALTOR® and asked to Broker her company. It's a husband and wife team who have been in Real Estate, in Florida, for about six months but own their own company. They need a "rent a broker" to qualify their corporation. The offer made to me was a percentage of gross commissions.

I have to say, I am actively searching for additional income streams for 2008, so the thought of brokering this company does appeal to me.

In Florida, I can have multiple licenses and Broker as many companies as I want. In fact, as some of you may know, I am the Broker for my younger brother's company, Garden Views Realty, Inc, that specializes in Disney Vacation Club re-sales. This is a good fit since his business is completely different from mine and of course, he's my bro!

The company I was asked to Broker is about 75 miles from my market so, even though their focus is residential re-sales, they would not be in competition with me.

However, TLW and I have decided to take a pass this time. After doing our research and doing the math we decided the risk was greater than the reward. They seemed like nice folks but their particular business plan doesn't make sense to me if we are getting paid a percentage of gross commission. For one, even though they have quite a few listings, they haven't had ANY closings!

Their business model is to take listings for a flat fee of $500 plus ½ percent commission at time of closing. Not much money there. And they rebate 50% of the selling side commission! Not much money there either.

Now folks, if you read my blog, you know I have NO problem with alternative business models(ABMs). I truly believe everyone should be free to run their business the way they choose and I also firmly believe the consumer should have choices.

BUT.....in this more difficult market I just don't see how a "start up" using this commission model is going to survive. I understand how the "flat fee" listing model works but to team it with a 50% Buyer rebate just sounds like a recipe for failure.

Anyway, I am looking for business opportunities. If you have anything I may be interested in please feel free to pop me an e-mail. Broker Bryant is fishing for dollars!

*** The picture was taken yesterday by me. It's a hay bale snowman!!!

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Jennifer Fivelsdal

JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY

Mid Hudson Valley real estate connection

I think taking a pass was a wise decision, the risk was going to be more than the gain.

Dec 16, 2007 04:38 PM

Allison Stewart

St.Cloud Homes - Saint Cloud, FL

St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

It always makes sense to follow your instincts. But at least you have your good looks and great attitude to fall back on if all else fails! <wink>

Dec 16, 2007 09:57 PM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

BB- Learn something new everyday....I was unaware that you could have ownership in multiple Real Estate companies. I am pretty sure that is not allowed in Massachusetts.

Dec 16, 2007 11:50 PM

Renée Donohue~Home Photography

Savvy Home Pix - Allegan, MI

Western Michigan Real Estate Photographer

I love to hear what you two are always up to! Congrats on analyzing the situation and passing up the "opportunity". That is what makes you both REALLY successful!

Dec 17, 2007 12:05 AM

Suzanne Sands

Pavao Real Estate - Somerset, MA

Somerset MA Real Estate

BB & TLW,

Your title is cracking me up! Of course, they want YOU...but the risks for outway the benefits. Good move. :)

Dec 17, 2007 12:22 AM

Christina Ethridge

The North Idaho Dream Team powered by SKE Realty Group - Coeur d'Alene, ID

Oh BB - you are so setting yourself up for every version of "multiple streams of income" known to man!! BTW, have you considered property management - since so many properties in your area can't sell, are there still people looking to rent?

Dec 17, 2007 12:39 AM

Diane Aurit

LKN Realty, LLC - Mooresville, NC

Lake Norman Real Estate

I agree, too many risks with this one. Good decision!

Dec 17, 2007 12:39 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

Having been a discount broker for over 12 years now, I'd say that the companies that try to make the discount method work with sheer volume are fighting an uphill battle. You can't only have eggs on sale. You have to have a gallon of milk and a loaf of bread to sell the customer when they take you up on the cheap eggs!

Bob Mitchell

ValueList Real Estate Services, Inc.

Dec 17, 2007 03:11 AM

Mana Tulberg

805 County Real Estate - Camarillo, CA

Real Estate Agent - Camarillo CA

Broker Bryant, I think in this market we are all looking for alternative incomes. Best of luck to you and TLW. I believe you need all the help you can get to support Bertha's expensive taste in clothing and jewelry. :0)

Dec 17, 2007 03:29 AM

Kaye Thomas

Real Estate West - Manhattan Beach, CA

e-PRO, Manhattan Beach CA

BB- 3 words... Very Smart Move..

Dec 17, 2007 05:14 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Well hey everyone. Yep had to take a pass on this one. I like income but I'm not an idiot. Well at least I'm not an idiot when TLW has my back:)

Ok let's see what we have here:

Property management- Nope. Been there done that and can't take it. I could hire a property manager but realistically I would have to have a minimum 100 properties to make it worth my while. To much effort for this stage of my career.
Travel services. OK Sharon I love you but........Nope. Can't do that.

My problem is when I start looking for other opportunities I keep weighing it against how much I can make by just selling an extra house or two a month. Two extra houses a month is about 100K. So how much effort would it take me to just increase my sales? Probably a lot less than expanding my business.

However I am leaning towards bringing on some agents after the new year. Maybe 10 or so. But they have to be experienced and able to work from a home office since I have no intentions of opening an office.

Or I could just do some more investing next year. It will be a good time to pick up some inexpensive rental properties. Of course that would mean TLW would have to manage some more properties. I may not get her approval on that.

I really like listing properties and working with Sellers. Even though I would be an excellent team leader and manager of agents I just don't find joy in that. I like my down time too much.

I think I need passive income. OK I'm just thinking out loud here so bare with me. I know........I could go to the dog track!!!!

Maybe I should quit giving you guys all my secrets and start charging for them. How about I stsrt a Broker Bryant pay pal account and start accepting donations?

As always I really appreciate you guys stopping by. THANKS!!!

Dec 17, 2007 07:56 AM

Rich Jacobson

Fathom Realty West Sound - Poulsbo, WA

Your Kitsap County WA Real Estate Broker

I don't see why you're being so darn picky for.....with a business model like this, you simply make up for it in volume....

Dec 17, 2007 08:26 AM

Laurie Mindnich

Centennial, CO

BB...rent a broker? I've never heard of that. You'd have better returns having TLW gather up unwanted gold, and sell it for scrap on ebay.

Dec 17, 2007 09:48 AM

Gary Bolen

McCall Realty - South Lake Tahoe, CA

CRS - Lake Tahoe Real Estate Information

Bryant - Yep, weather has been great. Has been cold so snow we got last week stayed. And more coming for the next few days. The more the better for all of us up here. Last year we had no snow to speak of until early Jan. after the holiday. That really hurts the town.

Am buried right now on a deep, detailed piece about some real nonsense with the local school board. Have a week into it already, and a week to go. It's possible it will get a lot of local attention. Also am close to working out a partnership with the local paper. To use all of our stats... and some articles. Am hopeful.

Hope all of you Tutas folks are poised for a splendid holiday season.

cheers

Dec 17, 2007 01:52 PM

Lucky Lang

Premiere Plus Realty Marco Island - Marco Island, FL

Marco Island & Naples Florida Real Estate

Broker Bryant,

Did you spray paint that bale of hay?

I could always send you down some snow.......we just got dumped on up here!

Hey, that's it! You can come up here and shovel snow!

Lucky :)

Dec 17, 2007 02:40 PM

Allen C. Wright

RealtyU - Aliso Viejo, CA

NS, AHS, REPS

Best reason for not taking the deal was the fact that they are 75 miles away. As a consultant I have always advised brokers and agents to work in areas that they are at least familar with enough to identify simple problems and points of caution.

Good for you to walk away

Dec 17, 2007 02:50 PM

Randy L. Prothero

eXp Realty - Hollister, MO

Missouri REALTOR, (808) 384-5645

If they have had no closings, even if they double your percentage you still make nothing. Sounds like a lot of liability.

Dec 17, 2007 03:20 PM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Do you guys have "rent a brokers" in your areas? It's pretty common down here. A a REALTOR(R) holding a saleperson license in Florida cannot be an officer or dirctor of a real esate corporation. They can however own a real estate corporation and hire a qualifying broker(rent a broker).

Usually these are brokers that are doing nothing more than qualifying the corporation and have no day to day hands on duties. Of course they are stiil legally responsible for their agents actions. If I did do something like this I would be sure to review contracts to make sure things are being done properly. I also would not allow an escrow account. I think by doing these few things and by having an E&O policy in place you could limit your liabilty quite bit.

So while this one didn't make sense it doesn't mean there aren't some that would.

In reality how many brokers are truly hands on anyway?

Dec 18, 2007 06:05 AM

Armando Rodriguez

QUEST REALTY SERVICES - Orlando, FL

Orlando Homes 4 Sale, Real Estate Broker-GRI

I've been asked several times, but I don't need the hassle.

As you point out the Broker is responsible for just about everything the agent does, whether you knew, should've known or didn't know doesn't matter. You'll be named in every lawsuit, fined, etc. You gotta sweat it if they're in a car accident. Life's too short.

Rental income has always been my big back-up. I also do short and intermediate term stock trading. It takes a little learning, but once you develop some expertise you can make quite a sum, just you and your computer. No sellers, no buyers, no phone calls!

Good luck with the fishing!

Dec 18, 2007 12:11 PM

Katrina Madewell

Charles Rutenberg Rlty- More than 5,000 agents(813) 777-1196 - Tampa, FL

Tampa FL Homes for sale | Tampa Bay - (813) 777-1196

I would have to pass on this flat fee 1/2 % MLS fee stuff myself! I am a firm believer in YOU GET WHAT YOU PAY FOR!

Nice snowman ... FLorida Style :o)

Dec 18, 2007 05:36 PM

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