Paying Agents/Brokers

9 Replies

I'm looking to begin management company with little cash flow to begin. I want to hire agents and brokers to make the deals on behalf of my LLC. I can't afford to pay them a salary so I would pay them a commission.

I am asking for any suggestions on how much of a % brokers/agents should be paid for each deal they close. Are there other contingencies that should be in play?

Thanks in advance.

Woody

@Woody Jean  - I am not understanding your question.  

Do you want to start a brokerage and hire agents to buy/sell properties?  Then you need to be licensed in your state to do so and will have business start up costs.  Also agents are usually paid by the seller

Do you want agents to lease your properties?  They you will need to pay them a commission per unit

Are you looking for agents to find you property to buy? If the property is on the MLS the seller usually pays them and as a buyer it would be no cost to you

Hi Brie,

Sorry, my post was a bit ambiguous and thanks for replying to it.

I want to know the multiple ways of paying brokers and are there any other essential pieces I should be putting into place as a future commercial and residential property manager.

I am starting a property management firm. I don't have a license and as you stated I would need one to make the deals myself. So, my plan is to start my management company and to hire agents/brokers to perform the deals since I legally cannot.

I can handle the start-up costs but as far as paying the agent/broker, that's not feasible. Going the route of paying them a commission is what I want to do. 

I am starting this pm firm in Connecticut and also would like in advice on what kind of contracts do brokers normally get while working on commission? Is it a one time commission fee per deal? Is it a fee plus monthly payment. 

Thank you,

Woody

Are you sure you don't need a RE brokerage license to manage properties?  Usually the management and simply collecting the rents requires a license.  What experience do you have?

@Woody Jean   Co-signing with Brie Schmidt. You have to be licensed in order to run the pm company. I'm not an attorney(you should seek out one), yet I know that there will be requirements from the state / county to provide your real estate license number at some point in setting up the start-up business. Whether its when you apply for your business license at the county office; which you may have to provide (a copy) to any would-be client as proof of legitimacy prior to getting hired. It all depends.... You will be fined if you get caught operating without a license as a pm co. with employees.

Kudos,

Mary 

It is my understanding you need a broker's license to do property management in CT, whether on your own or through a company you run. I believe there are some caveats to that - for example, if you live in a multi-family and rent out the other units, you would not need your license. The state Department of Consumer Protection is in charge of licensing in CT and could further clarify.

Woody Jean @Mary B.

I don't believe property managers need to be licensed in the state of CT unless they are also handling the leasing or sale of real estate, but you should double check with the department of consumer protection at www.ct.gov/dcp

I am confused however by your question. Are you looking to have agents or brokers find you properties to purchase? If so then they would typically collect a fee from the sellers. If you're asking about paying brokers to lease or sell properties that you have been hired to manage, the fees would typically be paid by your client, the owner, not by you the manager.

I'm not sure if that answers your question since I'm not really sure what you were asking, but let me know if this helps or maybe you can clarify your question further...

Woody Jean Mary B.

I don't believe property managers need to be licensed in the state of CT unless they are also handling the leasing or sale of real estate, but you should double check with the department of consumer protection at www.ct.gov/dcp

I am confused however by your question. Are you looking to have agents or brokers find you properties to purchase? If so then they would typically collect a fee from the sellers. If you're asking about paying brokers to lease or sell properties that you have been hired to manage, the fees would typically be paid by your client, the owner, not by you the manager.

I'm not sure if that answers your question since I'm not really sure what you were asking, but let me know if this helps or maybe you can clarify your question further...

Just looked up some quick info, it appears that if you're not selling, exchanging, leasing or collecting rents or working for a community association (like a condo or coop) you would not need to licensed. But I'm not an attorney and that's just my two cents.

Thank you, @Daniel Raposo  - what you've pointed out made me realize I wasn't clear. When I referred to property management, I meant the leasing end of things (and, of course, the sale, which hopefully is obvious on its own). I'm glad you chimed in!

When interviewing a property manager the first thing I ask for is a license ,a license protects the consumer.Many states require to have a license broker it is important to know state law. It would be a red flag to me if the agent could not provide a licencence and references. It  would mean too me to be very cautious. 

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