100% Commission Brokerage Vs. Traditional Brokerage

Real Estate Agent
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100% Commission Brokerage Vs. Traditional Brokerage

Timothy Lewis
Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes

Hello BP! I just passed the board exam to become a licensed Real Estate agent in Florida. Specifically in South Florida. My plan is to find a good 100% commission brokerage to hang my license with. The reason I was looking at this versus a traditional brokerage is because I believe I have a relatively good grasp of my local market and RE, in general. I have experience with wholesaling, flipping, and managing rentals down here. I am mainly looking to leverage my license for my real estate business and to purchase a primarily residence for myself. Due to the high price point of Miami RE, I would be giving a large chunk of money to a traditional brokerage per deal. From what I've researched, most 100% commission brokerages charge a standard amount per transaction. Few have monthly fees. All charges would be significantly less than a brokerage taking 30%-50% of my commission.  However, to my understanding, traditional brokerages offer a lot that a 100% commission based brokerages don't; like training and resources. 

My questions to the BP community are:

  • 1. From your experience, what are the main pros and cons of working with a 100% commission brokerage?
  • 2. Out of the hundreds of 100% Commission brokerages out there, what qualities set the great ones apart from the mediocre? Simply put, what should I be looking for?
  • 3. What pivotal resources would I be missing out on from a traditional brokerage, like a Keller Williams, by going with a 100% commission brokerage?

Thanks in advance for all your feedback and help!!

Tim

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      Mindy JensenPro Member
      BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
      5y

      I'm licensed, and work for a 100% commission broker. I pay $25 per month and $295 per transaction. On a typical deal, I'm at $12,000 before any fees. I also pay a Transaction Coordinator for every transaction, which I don't count because I don't HAVE to pay it, I choose to.

      I could be licensed on my own and truly take home 100% of that commission, but I like the opportunity to ask questions of my managing broker. I've had some weird deals happen lately, and it is super helpful to have someone else to bounce ideas off of.

      However helpful it is, it isn't worth 40% of my commissions. 

      [email protected]Podcast Guest on Show #261
      BiggerPockets
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      • Timothy Lewis
        OP
        Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes
        5y

        You are the second person to recommend this Brokerage @Marian Huish So it has officially moved to the top of my list. I never knew brokerages could offer stock options. Wow. Thanks a lot!

        0Reply
      • Marian Huish
        Real Estate Broker · DC MD, VA & NV · Member since 2014 · 512 posts · 292 votes
        5y

        Good idea @Timothy Lewis!  Only just to clarify, you'll actually be awarded company stock (EXPI) for selling real estate and reaching certain milestones, not receiving stock options.  With a stock award, you receive the company's stocks as compensation. Depending on the type of stock, you may have to wait for a certain period (with #eXpRealty, it's vested for 3 years) before you can fully own it. A stock option, on the other hand, only gives you the right to buy the company's stocks in the future at a certain price.  You can also purchase stock up to 20% discount with 5% of your commission at closing of each transaction...  kind of like a company 401(k)!  I don't believe other brokerages have anything like this!

        1Reply
      • Timothy Lewis
        OP
        Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes
        5y

        Got you! Thanks for the clarification @Marian Huish 

        1Reply
      • Robert Calabro
        Rental Property Investor · Columbus, OH · Member since 2018 · 42 posts · 29 votes
        5y

        @Timothy Lewis

        It really depends on how you intend to use your license. Ask yourself how much of the additional resources being provided will actually help your business? This is a tough question for newly licensed agents, but do the research. You may find that you won’t neen most of what the “full service” brokerage is providing or that you prefer to procure those tools on your own for a lower cost.

        If you’re not into classroom learning or generic training then those training course may also not benefit you much.

        I’d look for a broker/manager you trust and someone who can help guide you, regardless of the commission splits.

        1Reply
      • Ryan Planchon
        Investor · Miami, FL · Member since 2019 · 41 posts · 33 votes
        5y

        Congrats Tim!

        0Reply
      • Angelique Teague
        Member since 2022 · 1 post · 1 vote
        4y
        Quote from @Timothy Lewis:

        Hello BP! I just passed the board exam to become a licensed Real Estate agent in Florida. Specifically in South Florida. My plan is to find a good 100% commission brokerage to hang my license with. The reason I was looking at this versus a traditional brokerage is because I believe I have a relatively good grasp of my local market and RE, in general. I have experience with wholesaling, flipping, and managing rentals down here. I am mainly looking to leverage my license for my real estate business and to purchase a primarily residence for myself. Due to the high price point of Miami RE, I would be giving a large chunk of money to a traditional brokerage per deal. From what I've researched, most 100% commission brokerages charge a standard amount per transaction. Few have monthly fees. All charges would be significantly less than a brokerage taking 30%-50% of my commission.  However, to my understanding, traditional brokerages offer a lot that a 100% commission based brokerages don't; like training and resources. 

        My questions to the BP community are:

        • 1. From your experience, what are the main pros and cons of working with a 100% commission brokerage?
        • 2. Out of the hundreds of 100% Commission brokerages out there, what qualities set the great ones apart from the mediocre? Simply put, what should I be looking for?
        • 3. What pivotal resources would I be missing out on from a traditional brokerage, like a Keller Williams, by going with a 100% commission brokerage?

        Thanks in advance for all your feedback and help!!

        Tim

            I would highly recommend moving to a 100% brokerage as soon as you can. There are hybrid brokerages that have quality CRms, help you learn to invest, have great support, help you set up your own LLC...you know...succeed. forget the hype, big box brokerages are robber barrons in my opinion. If you are confident in your skills as an agent and your ability to keep learning you do not need a big vampire broker on your back. They never give you leads no matter what they promise so why pay them a good portion of your money? for a fancy name pen? No thank you. I sold a home for 1.4 million and paid a 15.00 transaction fee and my $99 desk fee that month....that's it. A big box would have taken 20 to 30 percent! Hell no.

            1Reply
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