Broker Bryant’s comment below put me in mind of a business model I invented earlier this year.
I spent my second two years in real estate in a brokerage such as Bryant describes: You pay a monthly fee to hang your license. If you produce — not encouraged — you pay a transaction fee plus an Errors and Omissions insurance premium. There were 185 agents in the brokerage, of which maybe 15 of us were doing more than one transaction a year. I was doing a lot more. I was there because it was the cheapest 100% plan available to me, because I knew they would leave me alone — which they did — and because I was biding my time until I could take the test for my broker’s license.
But it occurred to me that the NAR has got got be about one-third dead weight by now: Agents with style, charm and zeal — just no clients. Even so, an active real estate license is a valuable thing to have, even if you really are doing one or fewer deals a year.
On the other hand, you are only valuable to me as a broker if you are not increasing my liability. When you do nothing except pay me, I love you. When you write contracts or engage in other random acts of agency, you scare me.
Here’s the idea I had: You can hang your license with us for FREE. No monthly fees — forever. You arrange your own renewal hours and pay the state’s fees, but you own me nothing, and you can hang your license with me for free forever.
What’s the catch? You cannot ever write a contract or represent a client. You cannot do anything for which I can be sued. If you have a mother-in-law deal, that’s great. It will be handled by a working agent and you’ll get a 50% referral fee, with no nickel-and-dime brokerage fees deducted. Refer as many deals as you can — your referral fee is always 50%. You can’t do anything, but you can make a ton of money for doing nothing.
We can’t actually do this — nor would I want to. Our E&O policy requires that every agent have an advanced designation or a broker’s license. But the idea is endlessly funny to me: You can be a real estate licensee forever — provided you don’t do any work…