Commission split question

**seeeker** · 12-09-2008, 04:31 PM

Hi,
I actually don't have my license yet; I am currently researching the industry and courses for early next year. My question is regarding the commission split. All my resources describe, in general, the relationship as:

"Most associate brokers today are independent contractors responsible for some or all out of pocket expenses such as license fees, MLS fees, Realtor dues, business cards, sign riders, etc. The employing brokerage firm might provide desk space, telephone, secretarial help, signs, contract forms, other necessary tools, and most importantly, guidance, training and supervision." And what about gas mileage? Cell phone usage?

With a 50/50 split, my initial reaction is that these expenses can be significant, and all they give me is a phone and desk space? What exactly is the brokerage house doing?

I understand training is a part of their obligation but this must be significant mentorship to justify their share? What am I missing?

I am very new to the industry and trying to learn and understand. Can anyone explain in more detail the reason behind a 50/50 split if the independent agent is responsible for so many out-of-pocket expenses?

Thx....

**agentsranking** · 12-09-2008, 09:14 PM

I've never understood why anyone would work for a large broker that charges those kind of fees. In my opinion it makes way more sense to work for a flat fee broker who charges a few hundred dollars per transaction. Take the extra commission money and spend it on marketing and building your business. You've got to sell a lot of property to make ends meat if your broker is taking half your commissions. Also, consider getting your brokers license as soon as you are eligible. In Minnesota you need to be a licensed realtor for two year to apply for your real estate brokers license.

**Mike Taylor** · 12-11-2008, 03:26 AM

I think you should be able to find a 50/50 split on some sort of team where they provide the leads. This is a great place to start out in the business.

**MinnesotaPropertiesOnline** · 12-11-2008, 10:20 AM

I think as a new agent the hardest part of the biz is generating enough quality leads. My advice is to join a team that will provide you with good quality leads. You will be happy to take 50/50 on leads given to you to keep you busy and pay the rent. All the while you can build your personal biz, learn from the team success and agents around you and also gain referrals from the team generated leads. I am currently on the #1 team in the state for Re/Max in MN. In my first year I closed around 10 transactions, 9 of which were team generated. Second year I closed 25 deals and 11 of those were team generated and in my third year now I am closing 50+ deals and only 5 of them were team generated leads, otherwise the rest were personal leads.(Make sure your share is well over 50% on personal deals) Good luck!

**Codythebest** · 12-11-2008, 02:11 PM

Assuming you are a beginer, focus first on training available instead of commission. 50/50 or 100/0, if you do not know how to work, you'll make zero...

**txrealestate** · 12-11-2008, 02:30 PM

Hi, I researched all the companies in my area and found the one that would work for ME and all the criteria I was looking for. the one I chose has no desk fees, ongoing training including online webinars, very high commission splits, and the opportunity for residual and retirement income. IF you have any questions, I'll be happy to send you more information. Good luck in your decision!

**Nat_Ferguson** · 12-18-2008, 09:26 PM

Seeker, all very good questions to be asking as a newbie just looking at this business. What most people fail to explain is that, negotiating your commission with the Broker is just the beginning. Watch this detailed VIDEO on other pitfalls to be aware of.

**DreamSmasher** · 05-13-2009, 12:51 PM

After reading this post it answered a lot of my questions. I am in NY trying to get started as well and there is a company that does 50/50 split. It seem great they front the advertising costs and take it out of your next commission. Not sure if it is a good company for me but who knows.

**RedCarpetSchool** · 05-13-2009, 01:29 PM

Talk with the agents that are in the office and ask them if they like being there.

**wkmattingly** · 05-14-2009, 08:15 AM

Seems to me if it was 50/50 then you should be getting excellent training, leads from their established business rep, advertising budget per listing, a mentor, etc.

Here in LExington, KY I see a lot of 70/30. Some 80/20. Some straight desk fees. Graduated sliding scale commission that can eventually get to 100%. Also there is another place where you can make a portion of another agent you bring into the folds commission.

This is all very interesting to me as I just started my own brokerage and I wonder what I would like to offer. What are you newbies out there thinking?