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I just received an email from my brokerage firm (Coldwell Banker) office manager's secretary asking me to meet with him as she stated commissions will be changing. My initial thought is they probably aren't changing for the better.
I've only been a licensed agent for almost 1 year in the state of PA. I basically use the license now to save on commission costs as I'm selling a number of rentals in Florida ( 6 SFH to be exact) and working on purchasing homes in PA to rent out nearby where I live. I pay a flat fee of 500 bucks to Coldwell on each transaction. I've purchased 2 homes each worth around 400k each so far but I plan on buying more this year and next. I also would like to market myself better and get listings for others, not just myself.
I assume the office manager wants to meet with me as they are looking to charge more out of these types of transactions. This is my guess.
Is it difficult to switch brokerage firms? Should I look for a smaller, more local firm that can also offer me a flat fee on transactions (buyer transactions) even without a impressive listing/sales record?
Concerned as I have one loop ( Transaction to purchase a condo for myself) already under contract.
It would be smart of the brokerage to increase your fees. Personal transactions carry much higher liability exposure for the firm, and it would be wise of the firm not to allow personal transactions to be a primary reason for your association with them.
Most brokerages will not support you and let you only do transactions for yourself. It is not their business model.
Whatever your split is with the brokerage, it will be smart for them to require an imputed amount per transaction from you.
Their E&O company doesn't want them to employ agents who only do personal stuff either, and they ask about it every year at policy renewal time.
Example:
I.e., you sell a $300,000 rental, and your split with CB is 50/50.
IF typical commission, for firm's specified commission, is 2.5/2.5% in your area, they would be looking for 50% of 2.5% for each side of the transaction you represent. Regardless of what your commission rate is.
$3,750/side.
Some firms will let you do one personal transaction annually. Some will let you do a personal transaction for every 5 or 10 regular transactions you do.
I would not hire you and let you do only personal stuff @ $500/pop, at any price. Brokerages want brokers who work in general brokerage. Further, your posts here indicate a lack of training and development. You seem like a liability time bomb to me.
You are looking for a paperhanging shop, with a low monthly desk fee and a low flat fee per transaction, where support and training are minimal, and associates aren't screened.
It should not be hard to move, but you likely should wait until you have no transactions in process, depending on how your CB manager says how they would be handled.
Last edited by MikeJaquish; 07-17-2021 at 03:46 AM..
I just received an email from my brokerage firm (Coldwell Banker) office manager's secretary asking me to meet with him as she stated commissions will be changing. My initial thought is they probably aren't changing for the better.
I've only been a licensed agent for almost 1 year in the state of PA. I basically use the license now to save on commission costs as I'm selling a number of rentals in Florida ( 6 SFH to be exact) and working on purchasing homes in PA to rent out nearby where I live. I pay a flat fee of 500 bucks to Coldwell on each transaction. I've purchased 2 homes each worth around 400k each so far but I plan on buying more this year and next. I also would like to market myself better and get listings for others, not just myself.
I assume the office manager wants to meet with me as they are looking to charge more out of these types of transactions. This is my guess.
Is it difficult to switch brokerage firms? Should I look for a smaller, more local firm that can also offer me a flat fee on transactions (buyer transactions) even without a impressive listing/sales record?
Concerned as I have one loop ( Transaction to purchase a condo for myself) already under contract.
Thanks for any suggestions or help.
Your guess is most likely correct. And they'll have good reason to change the commission structure. You might as well wait until you hear what they have to say before you start looking elsewhere. I think you'd have a tough time finding another brokerage to come close to your present situation if they'd think that most of your transactions would be personal.
When I started out, I worked for a small brokerage and I was able to buy a number of single family houses. I managed to save money by handling each transaction, but the brokerage still got their normal split.
I've only been a licensed agent for almost 1 year in the state of PA. I basically use the license now to save on commission costs as I'm selling a number of rentals in Florida ( 6 SFH to be exact) and working on purchasing homes in PA to rent out nearby where I live. I pay a flat fee of 500 bucks to Coldwell on each transaction. I've purchased 2 homes each worth around 400k each so far but I plan on buying more this year and next.
Totally out of curiosity (and a bit OT), but how can an agent licensed in PA be selling houses in Florida as an owner/agent?
Depending on the state's licensing law, he may not be able to sell FSBO. In Michigan, a licensee has to list their properties for sale through a broker, with the exception of their personal residence.
Depending on the state's licensing law, he may not be able to sell FSBO. In Michigan, a licensee has to list their properties for sale through a broker, with the exception of their personal residence.
I would let one of our resident Floridians clarify that point. Yes, I guess you mentioned it before, just not the case where I am.
Mike - Can you explain further why I'm a liability? I'm not arguing with you, I just want to understand what you mean.
Yes, I totally agree 500 bucks as a fee and I keep 3% isn't in the best interest of the brokerage firm. I'm sure they will want a bigger cut and I'll wait to hear from them. If they want to drop me, it's fine. I can hook up with another brokerage firm. I just need to sell a few more homes in Florida and purchase in PA and then I'm done. I may not even keep my license but we'll see.
I don't sell the homes myself in Florida. I have a local agent who sells them all and has agreed to 1.5% commission on all of them.
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