The Proof is in the Pudding: What Is Your Commission Costing You?
Real estate agents get into the industry for many different reasons, but it normally boils down to a three main factors: 1. own your business rather than working for someone else, 2. own your time and schedule, 3. make as much money as you want, not what a company has determined for you.
Financial success as an entrepreneur isn’t an exclusive desire to REALTORS®. Anyone who had sold lemonade on the corner of their neighborhood street as a kid knows the relief and excitement of that first sale. When the taste of success is achieved it's exhilarating, and most of us would do anything possible to feel this every day if it means we can achieve our financial goals simultaneously.
With more than 300,000 active real estate licensees and brokers in the state of Florida, it’s easy to see how beneficial becoming a REALTOR® can be. In the sunshine state, however, you are required to hang your license with a real estate broker for a minimum of 2 years before you can truly go into business for yourself. Most real estate brokers take some portion of your commission as well as charge monthly fees to hang your license with them, which means another party is calling the shots on not only your business practices, but also your money. So on closing day, how much of your hard earned money are you actually walking away with?
Let’s analyze the three main fees involved with hanging your license:
1. Commission Split
2. Transaction Fee
3. Monthly Brokerage Dues/ Desk Fees
This is a very popular fee structure that many major real estate franchises charge to new REALTORS®. While it may be clear to most which company this specific example refers to, we will call them Broker A.
Closing Day Breakdown
Let’s say You’ve had a closing today. Fantastic! Now with a sales price of $500,000 and a 3% commission, your gross commission is: $15,000.
How much does Broker A eat away at your commission check?
You just paid $4,500 to hang your license with Broker A. What could you do with an extra $4,500?
But wait! Broker A Caps at $1 million in sales!
Yes, Broker A will stop taking a commission split and allow you to keep 100% of your commission once you’ve sold $1 million in real estate. That cap will last a year from the date you initially obtained $1 million in sales. So what does that look like? Let’s take the above example again, this time assuming you’ve had 2 $500,000 homes sold equalling $1 million.
Broker A has charged you $9,500 to cap. AND you’re still paying:
- $250 per transaction
- $65 per month
- $200+ for desk fees
The bottom line is that there is no cap to what Broker A will charge you to keep your license with them. Even when your sales reach $1 million, your commission cap it will only last a year.
You might be asking, “why the frack would anyone start their real estate career with Broker A then?" Two reasons.
1.The Education Promise. Most agents new to the industry begin with little knowledge of the real estate industry, and Broker A promises to educate you on how to be a successful real estate agent.
But as you can see from the above example, you’re paying a pretty penny to be educated. You’ll feel the pain on that first closing, and the next, and the next…. and start to wonder if their “education” was worth almost one-third of your hard-earned commission. See three reasons to FIRE your Current Broker
2. Because you think there is no other option. Big franchises have done a phenomenal job creating massive exposure to their brand, and the simple truth is that the more attention a brand receives, the more often you’ll think of them as the source in the industry. Effective marketing, but not accurate. There are other brokerages that will give you real training for your business, your brand, and your mindset, without taking any commission.
With Follow Me Realty, the most you will ever pay each month is $399. That’s $4,788 a year, period.
Don’t believe us? Put our words to the test. Email us with any brokerage model and what is offered, we guarantee you we offer much more and charge much less. See just how much more money could have gone to making you more money, not your broker.
Let the numbers speak for itself, see how Follow Me Realty dominates the real estate industry and works for you, the real estate agent, every time.