ARTICLE: RE/MAX Offers $55 Million Settlement in Lawsuits

[Brandon Hoffman]

Originally Posted by LynnKrause1

A good thing. Brokerages who "live" off the spoils of the agents will have a new business model. These "agents" become employees and have a 401k, time off, salary commensurate with effort and when they have paid he company back all they have cost the company, perhaps they are then entitled to a bonus....same as any other sales company/force. Commissions are too high based on effort. And this from a 30 year real estate veteran.

The brokerages my live off the money I pay, but I don't think of them as parasitic. It's more of a symbiotic relationship because it's mutually beneficial. They provide me support so I have a better quality of life. I give them money so they can stay open and run that side of the business so I don't have to. If a brokerage isn't providing value, the agent can always, in the current system, leave and go elsewhere.

As one of those previous independant contractor agents who's been on both sides (I was an agent at a franchise (ERA), opened my own brokerage (RE/MAX) and didn't love that side, and went back to the IC at a franchise side (KW)) - I can tell you I like the current setup. I don't wan to be an employee getting a check and having a schedule. The current model has allowed me to accumulate wealth and do the things I want to. The most important of those things to me are arrange my schedule so I coached my kids soccer teams. In 14 seasons (2 kids-seasons each) I missed maybe 4 practices and I think 4 games - 2 of those were because we were on family vacations and 1 of those because I was on a trip to Alaska. In addition to a few trips a year, I also play golf 3-5 weekdays a month but I sitll work about 45 hours a week, but I choose when I work them.

When it's slower in the fall or winter, I play more and work on flips and things. When it's busy in the spring and summer I work as much as I can. It's been good for me because I am self motivated. I don't need someone telling when to come in and work, and I don't need to be dependant on someone else to hand me a check because I can manage myself.

I'd hate for the current model to go away. The agents who leach off the system and don't have good organization or work ethic would probably be happy to sit back and collect a check every 2 weeks.

[MikeJaquish]

Originally Posted by Brandon Hoffman

...

The agents who leach off the system and don't have good organization or work ethic would probably be happy to sit back and collect a check every 2 weeks.

Prior to working in real estate, I worked selling mediocre overpriced home improvements for a couple of large companies. Learned a lot about meeting folks in their homes, and a whole lot about the kind of person I truly hoped not to be.

The way to dodge the "employment" wage requirements?
Put the employees on a 40-hour minimum wage "draw against commission."
$300/week would be legit, according to Fed standards. Local standards may differ. And competitive employers might raise the draw higher to attract cannon fodder.

After a certain time period, the employee either sells and covers the draw with commission revenue, or the employee is cut free.
We saw a lot of guys come and leave, who only took the job for the $300/weekly until they found a job or got canned.
I cannot imagine putting my house sales and purchase into the hands of someone who found comfort in $300/week, but I've seen a lot of things in brokerage that I never would have imagined.

[Brandon Hoffman]

Originally Posted by MikeJaquish

Prior to working in real estate, I worked selling mediocre overpriced home improvements for a couple of large companies. Learned a lot about meeting folks in their homes, and a whole lot about the kind of person I truly hoped not to be.
...
I cannot imagine putting my house sales and purchase into the hands of someone who found comfort in $300/week, but I've seen a lot of things in brokerage that I never would have imagined.

I'm sure it would be something that and everyone would suffer for it. I just didn't want to get into the nuts and bolts today.