Home Buying in Austin>Question Details

David O'dell, Real Estate Pro in Austin, TX

Agent brokerage dues and commission splits, how much do you pay to maintain your business?

Asked by David O'dell, Austin, TX Wed Dec 17, 2008

Just a general question, I'm curious to see what other's are paying in their monthly brokerage dues / commission splits. I would also like to let the public in on how much it costs to maintain licensure and education.
1) What is your commission split?
2) What is your monthly fee, if any?
3) How much per year does it cost to renew your license?
4) How much per year does it cost to maintain MLS membership for each of the boards you are a member of?
5) Any other biz related fees...
6) Average marketing cost per house listed?

I think Realtors have a hard time justifying their commissions, especially when they top $4000, but many of them simply don't explain the enormous expense to legally stay in business. Can you guys add to this?

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Answers

8
Hey what about the cost of advertising in the Realtor Books, The cost of gasoline, The cost of the signs and the riders. The cost of our key cards. Higher Car insurance because you are in Real Estate - the list goen on
1 vote Thank Flag Link Wed Dec 17, 2008
Thanks to everyone who answered the question, I personally think it should be known upfront the costs of being a Realtor are, so few websites of companies and agencies detail this information. I think it would improve the opinion of Realtors in general.

I used to work for remax at an 80/20 split and I did pretty well, managed to get a couple of awards, but at the end of the year I ended up paying too much in dues. I ran my own team for a little while and that cost around $3000 per month without an office... just pure dues... Some clients would note my commission and number of sales I had gotten that month and were flabbergasted about the money I was receiving, until I explained to them in detail all the above expenses... Then they understood.

Taxes, I try to hold at least 15% of each sale back for uncle sam. I guess each year I pay about $8k-10k in income tax... not a fun check to write right after christmas...
Web Reference: http://www.duplexstore.com
0 votes Thank Flag Link Wed Dec 17, 2008
David,
I guess the saying you get out of it what you put into it. What I am trying to say you are an independent and running your own business, so you should be able to pick and choose how and where and how much you invest in your own company (Yourself). I think your other questions regarding splits and desk fees pertain more to the specific brokerage that you hold your license under as those vary. Marketing fees will vary with the properties you list ex.(Million dollar home vs. Lot). The dues for boards and renewal are constant unless you are thinking about branching out on your own, then its a whole different ball game. You also need to keep up with your SAE or MCE credit which are very helpfull with our ever changing market. This is a business and you have to go in knowing that the first year can be financially draining and scary, I recomend making sure you have either a small business loan or enough capitol to get you started and maintain enough for the slower times. Hope this information was helpful.
0 votes Thank Flag Link Wed Dec 17, 2008
Interesting question!

The cost of our office is 10% of our net commission income!

Advertising takes another 20% (25% if webmarketing is counter.and consuming a larger and larger portion (
0 votes Thank Flag Link Wed Dec 17, 2008
Good question David

If you look at the business models in Gary Keller's books, you tend to find that expenses top 50% of gross income for a real estate agent working with buyers and sellers.

One thing that is powerful when talking to sellers is to show them the business model for marketing their home - costs, activities, time and materials invested in getting them the most money for their home. I never have to justify my commissions, I have to earn them

Garreth
Web Reference: http://garrethwilcock.com
0 votes Thank Flag Link Wed Dec 17, 2008
Dear David,
Since your a Realtor in Austin you should know the expense of maintaining your license and continually updating your educational requirements are a significant. I spend several thousand dollars each year on various required expenses. This time of year many Realtors drop their licenses when the ABOR and TAR dues invoices come out. Since they are due by the 15th of December, this is the biggest month of the year for Realtors to quit. Each Broker has a different split, you should contact them directly for specifics as I don't think it is proper to discuss that in an open forum. As for taxes, normally its about a third of what you make. I don't have a problem justifying my commissions as I earn every penny. I am there for my clients before during and after each closing.
Betina
0 votes Thank Flag Link Wed Dec 17, 2008
Thats a really good question because I was wondering myself.

Since I market myself as a Buyers Agent, there are some dues and fees that I do not have to contend with. On the down side though, there are some organizations that I do not belong too because I feel they focus on the Seller/Buyer Agent and I dont take advantage of their marketing.

I do not pay a brokerage fee. My split is 70/30. Most of my costs are in marketing myself as an Exclusive Buyers Agent and that averages about $125 to $200 a month.

Again, I know that since I am a buyers agent, my numbers are different from everyones else, but I look forward to hearing what others are doing.
0 votes Thank Flag Link Wed Dec 17, 2008
7) How much do you pay on Taxes on each sale.

J.
Web Reference: http://www.realtyatx.com
0 votes Thank Flag Link Wed Dec 17, 2008
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