Market Share

[Rich Rocco]

While interviewing a brokerage, they supplied me with numbers stating they’re company is number 1 in market share based on “closed volume” in the town in which their office is located as well as surrounding cities and the county they’re in.

How do I confirm these numbers and if you were a new agent, why would this be enough reason for you to hang your license with them?

[Morristown]

Rich, who are you talking to as far as brokerage?

I will say this and then leave it alone as it will come across as beating a dead horse if I talk to much about it. Pick the Brokerage that is the best fit for you. Ignore the market share thing. It is not important.

Your future clients don't care about the company, they just don't, they don't really care much about you ether, though if you do lots of relationship building that might change a little. Your future clients, and all of our future clients really care about getting what they want and not much else that involves us.

When I was in DE Keller Williams went from 0% not even one transaction in 2003 to this year they have at least 600 agents in that state and the general numbers I have heard were that they had about 12% of that market. All of that market share came out of the 2003 market leader, and the 3rd and 4th place company, leaving the 2003 2nd place company in first place. Those are the numbers on that as I understand them.

Anyway, interview all the brokerages if you have the time, pick the one that seems to be the best for you. Don't get to caught up in the mentoring programs and stuff, that is just a way for them to make more money from you, and don't let any of them fool you by telling you that they have the most referals, well who cares the stats I have seen are that 97% of the houses in any year are sold to someone who is moving from within 25 miles of that house.

Best of luck,

Jim

[Courtney Bontempo]

I agree with Jim. Don't overlook the smaller companies. Many times they offer more then what a larger franchise does in terms of who pays for your signs, business cards, lock boxes, mls fees and etc. These things add up. Some of the larger companies even charge office fees. Make sure you do your homework. Don't hesitate to ask questions. Make sure to have them demonstrate how you would be paid on a 100k deal. Both in house and out of house. This will get you a no B.S number that you can use as a comparison to each brokerage. This is very important. Just remember those interviewing you are sales people. They know what you want to hear, and make money off of you in fees. Keep an open mind and good luck.

[Rich Rocco]

Make sure to have them demonstrate how you would be paid on a 100k deal. Both in house and out of house.

What does out of house vs. in house mean?

[RESteve]

I'm assuming FWRealtor means referral leads and lead generated from your own prospecting.

Some brokerage take a referral fee for referrals, but the Keller Williams I am currently at does not.

[Morristown]

Rich just look at what will be the best situation for you.

Don't make the same mistake that many home sellers make though. Many home sellers get so focused on what the listing commission will be that they loose site of what they are going to walk away with at closing. So don't get caught up in who pays for lock boxed or who pays for your yard signs, in the long term scheme of things, those are 1 time expenses and over the course of a few years very small expenses. Your number 1 biggest expense depending on who you choose to run your business under will be commission split.

Here are 2 good examples:

Example 1
The Commission Deal I Am Under.
10 million in Gross sales
2.5% average commission
Yields about 250K in GCI
From that Take about 63K for expenses of running your business
take another 35K I pay in to KW in my total full cap fees
Net Result is $152,000 in before tax income.

Example 2
Typical Commission Split Company 70/30
10 million in Gross sales
2.5% average commission
Yields about 250K in GCI
From that Take about 50K for expenses of running your business
Then take your 30% you pay them off the top 75K
Net Result is $125,000 in before tax income.

The better you perform the bigger the difference becomes. With the first model you don't have anyone hovering over you telling you how to run your business, no limitations on where you can market for your business, nobody telling you that you cannot do a deal that you know you have to do to get the business.

FWRealtor has some good points but I think his points are coming from the same point of view of the home owner who's primary concern is what is the commission, rather than what is the home owner going to walk out of closing. In both cases the difference can be great.

Jim

[Courtney Bontempo]

What does out of house vs. in house mean?

This is what we refer to as in house: If you work for Brokerage Z and sell a home that is a listing from another agent within Brokerage Z. The commission stays in house. There isn't a split with another brokerage.

Thus a out of house deal would be the opposite. You work for Brokerage Z and sell a listing from Brokerage Y. In this situation the Commission would be split 50/50 between the two brokerages. Then you would get your split from your broker.

I hope this clears things up. Sorry for not making my comments more understandable and causing a misunderstanding. Sometimes that language used in one area doesnt carry over to others.

[RESteve]

In Texas the "out house" commissions are negotiated when taking the listing. The listing agent and seller will agree on how much is to be split with a mls and non-mls participant broker that brings a buyer to the listing to purchase. In our case, it isn't always 50/50, especially with distressed properties.

[Courtney Bontempo]

Jim I am speaking from a start up prospective, as well as long term. I suggested that he ask each brokerage to break down a 100K deal and show him exactly how much of that he would walk away with. I think my language in regards to in house and out of house deals skewed what I was trying to emphasize. But I agree, its all about the SPLIT. Some companies even offer a higher percentage split if you reach "X" amount in sales.

[Morristown]

Jim I am speaking from a start up prospective, as well as long term. I suggested that he ask each brokerage to break down a 100K deal and show him exactly how much of that he would walk away with. I think my language in regards to in house and out of house deals skewed what I was trying to emphasize. But I agree, its all about the SPLIT. Some companies even offer a higher percentage split if you reach "X" amount in sales.

As I have said before, here in NJ at KW the split is 70/30 until you have paid in your 35k cap then it goes to 100/0 I guess that is about as high a commission split as you can go.

Interview all the companies that are available to you, and remember it is not a job interview, they are not hiring you, you are hiring them, so you interview them.

Jim