commission splits and expectations from my future broker

9 Replies

I need advice. I'd like to hear from any brokers who hire agents that are investors.Or any agents that are only holding a license for personal investing.

I'll be taking my CA.state exam in a few weeks and I'll be looking for a broker to work for.I have a full time job and I only have time on weekends for office time or training.My plan is to get into wholesaling and using my license as a backup plan for sellers who want to list their house on the MLS.

1 What kind of commission split should I expect?

2 Would wholesaling be conflict of interest ?

Any advice from BP nation would be appreciated.  Thanks.

hmm i can not fully answer this for your state but in ohio the "normal" starting split is around 60/40 for the agent, unless you go remax or some of the other bigger people who offer a 95/5 but your monthly office fees are like 1000/1500 depending. your best bet is to call up any local broker and go "interview" see what they all say and are willing to offer you.

i got my first 500 business cards, 10 yard signs, 2 lock boxes, 3 months of o office dues, and 750 post cards for signing with my broker. so its all about how you handle it. 

This is very close to what I am going through right now as well. I started in February and am set up with a smaller brokerage. My split is 60/40 for my first deal and eventually builds to 80/20 after 15 deals. One commission free personal property per year as well. As far as the conflict of interest stuff goes I have seen a few situations where I would rather represent myself as an investor and not an agent. I do believe in full disclosure and complete honesty through every transaction. It is important to keep in mind that Realtors are held to a higher standard than a beginner investor. We are looked upon as experts in our field.

Hope this helped and I wish you the best of luck in the wholesaling business!

The brokerage likely has wholesaling as an excluded activity on their E and O policy.

E and O companies know what type of activity carries the most litigation risk and claims. Therefore they do not cover such things unless the brokerage pays a premium.

New agents generally carry a ton of liability even if they are doing vanilla deals as they are really green and still learning just how to do the basics of a transaction.

Don't expect to get a great split. 50/50 or 60/40 is common. Personally I stopped taking agents a long time ago.

Too much crap to deal with. Most are in your same situation working a JOB trying to make a nut on the side. Nothing wrong with that but 90% of them leave the business within a year. In 5 years 80% of those remaining 10% have left the business. Brokerages know new agents might know a few people to do 2 deals or so before they run out of friends an family to transact. At that point the agent has to build regular business and most times flames out.

You would not believe how intensive managing agents is for what little they produce.

A brokerage will see notices from the real estate commission like:

*Agent license is being suspended for not paying child support.

*Agent license is being suspended for student loan delinquency.

*Agent license is revoked for not renewing license and paying fees.

*Agent license is revoked for not completing continuing education requirements per the real estate commission in the given time frame.

*Agent license the IRS is sending the brokerage notices to levy the agents check when they have a closing to pay for their back taxes.

It goes on and on and frankly isn't worth all the grief. I would rather transact my own deals with clients and handle my own investments.

@Joey Dwyer

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need. Check with others with a lic. see how they handle and have with.

Good luck


Thanks  guys for the great advice. I like hearing from the agent as well as the brokers perspective. You gave me a good idea what to expect from a broker as well as what I can  possibly negotiate when  I interview a broker. 

@Jeremy Davis  Thanks for the advice I'll look into that.I heard about the desk fees , but I didn't realize they could be that high.

@Brady Halse  I love that you can get a free commission for personal property.I will definitely try and get that thrown in as I am in the market right now for my personal residence.Thanks

@Joel Owens  Thanks for the brokers insight.I can understand the hassle it might be to hire an investor as an agent, and I do know the low success rate.Especially for a part timer like myself. But I'd like to think I've got a leg up on the other part timers because I've got Bigger Pockets in my corner :)

Account Closed I just joined my first REIA last week here in my area and I love it.Thanks for the help.

Thanks guys for the help and answering my stupid question.I'm sure I'll have more stupid questions later!

Thats why Bigger Pockets Rock. 

After being an investor for years, I became and agent with REMAX. I'm both an agent and an investor.

I market myself at "The Agent Who Buys Houses". I have found that the RE/MAX brand helps me in my marketing as an investor and adds credibility to my business.

I have a broker who is great to work with and who understands the many ways to make money in real estate, including assigning contracts, double closings, and all other ways we can structure transactions as investors.

As an agent, I specialize in offering professional real estate services to investors.

Additionally, being licensed allows me to practice real estate in every other way that investors can't, such as representing clients and earning commissions on all kinds of transactions.

Also, as I ramp up my skills to do commercial deals, I'm finding the association with RE/MAX Commercial to be a great advantage.

My broker takes 20% with no monthly fees and I have only met him 3-4 times over the past few years.   I am also getting my managing brokers license and will be working with investors in 3 states and that is the split I plan on offering.  

@John Marion  Sounds like you're in a good spot there.I do want to get with one of the big guys for just that reason...the credibility.I was trying to wholesale a deal where I was going to flip to a builder but the couple decided to list because they wanted "retail" price.They still want to deal with me and said they would wait for me to get my license if I can get it this summer.So I can see the advantages of having more than one way to help someone once you get your foot in the door.I have a decent marketing budget and a pretty good lead source but I'd like to partner with a full time agent so I can offer my clients with "full time" service. Thanks for helping  out.

@Brianna Schmidt Giving 20% seems fair across the board. That seems like a good setup for you because it sounds like you know what you're doing. But I won't mind giving a little more in  the beginning in return for a good training program. Especially if they are willing to help an investor/ agent. Thank you so much for the info!!

@Joey Dwyer  

 - First, brokers don't "hire" agents and you won't be "working for" the broker.  Typically, a real estate agent is a self-employed businessperson.  You need to think of it from that perspective.  The broker is there to aid you in your business and to "supervise" you.  But that "supervision" is mainly just to make sure that you don't violate the law or the Realtor code of ethics.  That doesn't specifically answer your questions, but looking at the business from the correct perspective will help you with these types of questions.

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