While reading through this month's Florida REALTOR magazine, I noticed quite a few ads for 100% commission split offices. We've all seen them. They go something like this:

  • NO office fees
  • NO franchise fees
  • NO transaction fees
  • No waiting on commission checks
  • NO quotas to meet
  • NO sales meetings to attend
  • NO "junk charges" of any kind
  • ***Only $395 per closing!***

Now, the one thing that stands out to me, in these ads, is the fact that they don't say "experience required" or "only full time professional Realtors need apply" or how about this one "not for the faint of heart". I'm sure they don't mention these things because experience is NOT required. I'm sure they don't care if you fail or if you succeed. The deal is, hire as many REALTORS as you can, from all over the State, and if they close some deals we'll get our $395, if not, so what. Now, from a strictly monetary point of view, I guess this is a pretty good strategy. The fee is very enticing and you could probably get 100s of REALTORS to hang their license with you. Hey, if they can close 100 deals a month, the broker would "magically" make $40,000 a month, just for making their license available. Pretty good plan.

But of course, the one that suffers is the consumer. All these NOs, they advertise, also mean NO training and NO supervision. You are on your own. It's strictly a numbers game and its very scary. I have a Florida's Broker's license and could very well do this. But you know I take my job as a REALTOR very serious and couldn't even imagine sending untrained and unsupervised REALTORS out on the public. Plus, my license is very valuable to me. If I want to make $40,000 a month, personally, I prefer to work for it.

The State of Florida placed this little law into effect on July 1, 2006.

475.25 Discipline.--

(1) The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $5,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:

u) Has failed, if a broker, to direct, control, or manage a broker associate or sales associate employed by such broker. A rebuttable presumption exists that a broker associate or sales associate is employed by a broker if the records of the department establish that the broker associate or sales associate is registered with that broker. A record of licensure which is certified or authenticated in such form as to be admissible in evidence under the laws of the state is admissible as prima facie evidence of such registration.

So, with that in mind, I think I'll keep working for my money. This is definitely a case where a short term reward could cause you to be put out of business, permanently. If I'm doing my math correctly, I can hire a handful of associates and train them properly, hoping they close about 10 deals a month between them and make quite a bit more than hiring a massive quantity of untrained REALTORS and hope they close 100 deals. Much less risk and the possibility of a higher reward. Oh that's right, I forgot, my plan would require work. Wouldn't want to have to do that, now would we? What say you?

DISCLAIMER: These are not ads for major franchises. These are ads for mom and pop "rent a broker" agencies.

 

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72 Comments on NO, NO, NO, NO, NO, NO.....................Consumer beware!!!!

20 Most Recent Comments Displayed Show All

JAN
02
2007
3 Featured Posts

Bryant, do these offices have websites?  I would like to see how they are advertising 100% commission services on their websites.
8:10pm • #53
8 Featured Posts

Bryant, 

I wrote and you responded...."But the fact remains (in a majority of cases) that clients will use the agents that are most knowledgeable and experienced irregardless of their brokerage or commission structure. Do you believe this?"

I do believe this - reason being the agents who are successful long term are the ones who garner repeat business (typically).  These are the knowledgeable and experienced agents (whether with a 100% structure brokerage or a larger, traditional brokerage).  The folks that quit real estate in years 1 and 2 do not get the repeat business and often find it difficult to stay in business!?

Now you mention..."I think buyers work with whoever happens to be on floor duty that day, or whoever answers the phone when calling on a listing and sellers shop rates." - I would love to see a statistic as to just what percentage of clients find their agents in this manner.  I can't comment on that because I have never had to serve floor duty.....

Finally - I go back to one of my earlier statements.  Clients really need to interview their agents thoroughly irregardless of what type of brokerage they work for.  There are studs and duds under both hats!
8:17pm • #54
8 Featured Posts

Bryant,

One other comment real quick!  Jeff Belonger had a recent post...

 http://activerain.com/blogsview/30526/Marketing-YOURSELF-or-your

I just don't like the idea of 'blacklisting' an entire class of brokerage when I am of the belief that its much more about the person than the company!  Thanks,
8:34pm • #55
1,048,861 Points 397 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Kaushik, I too have never worked floor duty, in fact, I haven't worked in an office for years. I'm an independent Broker and work from my home. I agree successful Realtors get the majority of our business from repeats and referrals. In my market we seem to have way to many new agents. My local board has grown from around 600 members to, I believe, around 3000 members in the last 4 to 5 years. 

I think if the consumer did more homework and asked the tough questions, before hiring a Realtor, a lot of these issues would go away. But I must say, when I do have sellers calling me, that are not referred and just calling off on ad or out of the phone book, it seems the first thing they always ask is, how much do you charge? If I were selling my home, I don't think that would be my biggest concern. Thanks for coming back and responding. I think we got a good conversation going here and that's always a good thing. It's good to hear opinions from all over the country.

Nick, do a Google search for 100% commission splits and you will find a whole bunch of them.

Dan, I appreciate you stopping by and reading.
8:35pm • #56
1,048,861 Points 397 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Hey Kaushik, You slipped that one in on me. I couldn't agree more. It is 100% about the individual. When I write posts it is to start a thought process and to get opinions. I truly enjoy the discussions and try to hit on hot topics. It's how we learn and get to hear different perspectives about our business. Every Realtor needs to choose the biz plan that works for them. This post was mainly about out of area rent a brokers, not 100% commission splits. We have many Brokers in Florida that put their licenses up for rent. They don't even have offices. It's a totally different set up from a Keller Williams or Re-Max. That why I placed the disclaimer at the bottom of my post. 

For example: On one of the Florida Realtor forums that I participate on, a new Realtor posted a question. He was going on his first listing appointment and wanted to know what forms he needed to take in addition to the PURCHASE contract! Where is his Broker? Well he doesn't really have one he just sends a rent a broker a check if for some reasons he closes a deal. That's what I am referring to.
8:44pm • #57
202,235 Points 7 Featured Posts

For Nick: Some offices may be participating in this online group and advertising their websites.

Agents Online Real Estate Idea Center » Real Estate » Agents and Brokers » Looking For A New Office/Broker (Page 1

Agents Online Real Estate Idea Center » Real Estate » Agents and Brokers » 100%

 
9:03pm • #58
3 Featured Posts
to suzi - great source. thx ns
9:23pm • #59

As a new agent I wouldn't dare try one of those places. I think you would have to be crazy. I have a lot to learn and have a great team that works with me. I also learn a lot from the forums here. I know there is so much more to learn and you are right the consumer is the victim.  
11:38pm • #60
JAN
03
2007
5 Featured Posts
As a franchisee for a major franchise, RE/MAX, I constantly struggle against companies that offer financial plans such as you describe. Consumers should definitely be aware that agents from those companies are bottom fishers. What kind of a job are they likely to do for the consumer?
10:02am • #61
202,235 Points 7 Featured Posts
I am not one of "those" brokers but I am exiting from this thread because I think conversation has ceased being about learning to being derogatory, and unhealthy.
10:19am • #62
1,048,861 Points 397 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
Suzi, Don't leave!!! I do agree though it's not the company it's the individual. There are companies that "offer" great training for their agents and still many agents choose not to take advantage of it. I had mentioned earlier that it really is all about a mind set. Some folks will always seek out knowledge and some will always do the bare minimum to survive. 
10:59am • #63
202,235 Points 7 Featured Posts

Bryant, I didn't mean leave Active Rain, I meant this specific thread.  However, I can't find how to shut off as single thread anyway.

Here's what I think:

  1. Overall, we do need to be more open minded.
  2. I think we should focus more on what we as individual companies, and individuals have to offer rather than what the other companies don't offer.

I feel that when professionals resort to mudslinging I have ceased to learn anything of true value or merit.

I am more interested in hearing the value of models that work, why they work, and what they offer.

 

 
11:58am • #64
122,017 Points 6 Featured Posts Outside Blog
I would be a little scared to work for someone like that myself. However, I doubt their agents are any different than the agents that work in an office. Everyone gets their fair share of bad and good agents. There will always be good and bad in general. Balance is key.
12:50pm • #65
18 Featured Posts
Mr Broker Bryant, a.k.a. MR ROBOTO.   I see that you have so few comments I feel the need to add to the list.. :)    This is good stuff. I was thinking about this the other day. Are you in my head, or what?!   Thanks for the reminder.  100% of nothing is still nothing.  NEXT!
6:00pm • #66
JAN
04
2007
536,210 Points 38 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Bryan,

When I have a bad day, (Supplier and equipment failures.) I tend to miss things. I'd have liked to be in on this one early.

There are some very good companies that pay 100% less a fixed fee. I think the first I saw, was when a friend, Norm Helm, bought a ReMax franchise in Kalamazoo about 1977 or 78. The problem then as now is one of supervision. Norm didn't have a problem simply because of who he was, and he only accepted the very best people. People who were qualified and would have opened one man shops if his program hadn't been so good. We have some very good 100% offices here in Las Vegas.

Like all good things excessive greed enters the picture, one of the biggest offices here is 100% with several hundred agents, some good some very bad, none really supervised! A conscious broker with a small selected staff can do well, A larger office with a less through broker can and normally is a public menace!

We have the same problem in mortgage lending. I've been associated, as a 100% salesman, with one of the best run brokerages I've ever seen, but I worry as they grow. It's one thing to assemble a small experienced staff, it's something quite different to do large scale hiring.

Maybe it's time for you to develop a range compensation program.

Thanks for another great post.

Bill

William J Archambault, Jr

The Real Estate Investment Institute

http://www.reii.org

4:55pm • #67
JAN
19
2007
 get what you pay for sometimes..     
1:08pm • #68
532,041 Points 15 Featured Posts Localism Sponsor Outside Blog

Following up from my perspective: 

It's not about the size of the commission,  however, it is about the size (so-to-speak) of management/supervision.

Lynda Eisenmann, Broker-Owner, http://www.PreferredHomeBrokers.com

 
5:36pm • #69
JAN
29
2007
283,710 Points 45 Featured Posts Outside Blog
I don't care how many houses they sell.  I care about how they care about and do good work for their clients.  But that's me.
1:58am • #70
JAN
30
2007

I guess that we have to agree that each brokerage office would be unique.  Depends on the vision of a Broker for his or her company.
7:49am • #71
FEB
05
2007
183,984 Points 10 Featured Posts Outside Blog

Thanks for your post!  No No is definitely a No No.  Unbelievable that so many people fall for this nonsense.  How can one pair of eyes possibly catch everything?  My ego just is't that big that I believe I can do all, know all and be all for my clients.

Keep the great blogs coming.

Marlene Bridges, Realtor

Orange County California

www.LiveTheCaliforniaDream.com
10:46pm • #72

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Poinciana, FL

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