Which terms should I consider when getting employed by a broker?

Question

Joel Owens · Answer

First off in most situations it is not EMPLOYED. You sign a (IC) Independent Contractor agreement. Generating business will mostly fall to you to create. Also if you are an investor getting licensed to just find your own deals versus a career a principal broker might not want to put any time into you or take you on at their firm. Investors can also bring risk to a brokerages E & O policy if they try all these can of lease options and other out there types of deals (wraps),etc. For the small money the broker is making per transaction it Is often not worth their time to take on any other transactions with agents other than vanilla type deals.

Frank Wong · Answer

Hi Fernando,

Not all brokerages do a CAP, actually, most do not.

1. The most important factor is support and training.  You writing your own deals right?  Well, you don't want to screw yourself over.  Most new agents think it's getting the highest split and they learn the hard way.

2. Be honest with them up front on what you want. Tell them your terms.  Then they will tell you theirs.

3. I suggest going with a big name.  You are new you want a big company to be behind you.

Good Luck

Nanda Netto · Answer

I didn’t know about the cap, I’ll ask next week when I’ll meet him again.

Jake Fugman · Answer

@Fernanda Netto does that 90/10 come with a commission cap yearly?  Careful here because a 90/10 split will actually net you LESS than an 80/20 split (with cap) after you git a sales mark of $3.2M or so.

Nanda Netto · Answer

Thanks @Jake Fugman!

I have one offer for 90/10 and no monthly fees but he wouldn’t provide any structured training since he often hires experienced people. I would be an exception.

Then other really well structured  brokerages want a bigger slice of the cake, which is understandable but I’m afraid it will hurt my personal transactions.

Do you do any direct mail for your investment side of business?

Jake Fugman · Answer

@Fernanda Netto  Im an investor who got my license this year as well.  I chose my brokerage based on a combination of flexibility, tools, and passive income potential.  I would make sure the firm you go to has low monthly fees, and also has an aggressive commission split WITH CAP.  Mine for example is 80/20 then I keep 100% after a $16,000 cap.  Since I was also going to be doing my own deals I made sure they allowed for X amount of free personal transactions.

Good luck!