{"id":1041,"date":"2007-02-13T19:34:13","date_gmt":"2007-02-14T02:34:13","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=1041"},"modified":"2007-02-13T19:36:39","modified_gmt":"2007-02-14T02:36:39","slug":"is-your-broker-profitable-rent-a-broker-shops","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1041\/is-your-broker-profitable-rent-a-broker-shops\/","title":{"rendered":"Is Your Broker Profitable? – “Rent-A-Broker” Shops"},"content":{"rendered":"

The 100%, desk fee model was made popular some 25 years ago by one HUGE national franchisor<\/a>. There have been several companies that have adopted that model<\/a> and had equal success. Essentially, the business model is along the lines of “rent-a-broker” for a flat fee per month. The term “rent-a-broker”, really isn’t fair because it implies that the designated broker isn’t supervising the transactions but I’ll use it for the sake of illustration.
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\n<\/strong>The compensation proposition to the agent is that you get to keep 100% of your commissions and pay a monthly fee to the brokerage. There is an mutation of that model that charges a flat-fee per transaction but I think I’ll focus on the “rent-a-broker” model for this post. The best analogy for this model is one of a landlord and tenant<\/strong>. Like a property lease, there is a contract outlining the rights, responsibilities, and financial consideration expected from each party. In most markets with a median sales price of $250,000, the monthly “desk fee” would be approximately $1,000.<\/p>\n

The broker\/owner, really doesn’t have to provide much to the agent in terns of advertising or office space. Essentially, the only expenses associated with the brokerage would be the three administrative salaries and a small office space (with conference room and copier). I’ll pull the administrative costs from my post about the traditional model<\/a>:<\/p>\n

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Let’s analyze the annual expenses. Receptionist, operations assistant, and sales manager salaries will total $130,000. We gross that number up 115% to include payroll taxes and benefits for a total of $149,500. This is a traditional model so you should figure on $12,000 for advertising. Throw in the rent and facilities charges of $75,000 for a 2000 sq. ft. office, $12,000 for supplies and $12,000 for phone\/internet, equipments lease and we are approaching $260,500.<\/em><\/p>\n<\/blockquote>\n

Some of the costs will be recouped by “a la carte” services. Five individual offices could be rented to agents for $1,000 per month and the supplies and equipment costs could be passed through to the agents. The real Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The 100%, desk fee model was made popular some 25 years ago by one HUGE national franchisor. There have been several companies that have adopted that model and had equal success. Essentially, the business model is along the lines of “rent-a-broker” for a flat fee per month. The term “rent-a-broker”, really isn’t fair because it […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-1041","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1019,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1019\/is-your-broker-profitable-traditional-brokerage\/","url_meta":{"origin":1041,"position":0},"title":"Is Your Broker Profitable?- Traditional Brokerage","author":"Brian Brady","date":"February 8, 2007","format":false,"excerpt":"Have you ever analyzed the business model your broker has? Try to run the numbers sometime and see just how much profit the owners(s) of your real estate brokerage really earn. I learned a lot about running a mortgage brokerage and real estate brokerage from 1999-2002. I've owned both and\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":907,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/907\/in-a-rent-vs-buy-bind-right-now\/","url_meta":{"origin":1041,"position":1},"title":"In a Rent vs Buy Bind Right Now","author":"Russell Shaw","date":"January 16, 2007","format":false,"excerpt":"Eric writes: Hi Greg! I am writing because I really enjoy your blog. I'm licensed, but haven't worked with realty in years due to being back in IT (which you also seem to have a passion for), so I enjoy hearing from the experts. I'm in a rent vs buy\u2026","rel":"","context":"In "Ask the Broker"","block_context":{"text":"Ask the Broker","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/ask-the-broker\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1984,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1984\/get-your-odysseus-medal-nominations-in-now-for-change-is-nigh\/","url_meta":{"origin":1041,"position":2},"title":"Get your Odysseus Medal nominations in now for change is nigh","author":"Greg Swann","date":"September 30, 2007","format":false,"excerpt":"Jay Thompson fingered this comment from someone named Brandon writing at TechCrunch:If \u201cthe good guys\u201d succeed in \u201cfixing the most screwed up industry in America\u201d, their business model will collapse. Redfin\u2019s success depends SOLELY on the real estate industry STAYING the most screwed up industry in America. Without a co-broker\u2026","rel":"","context":"In "Blog Carnivals"","block_context":{"text":"Blog Carnivals","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blog-carnivals\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":541,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/541\/why-the-traditional-real-estate-commission-model-is-broken-and-needs-to-be-replaced\/","url_meta":{"origin":1041,"position":3},"title":"Why the traditional real estate commission model is broken and needs to be replaced . . .","author":"Greg Swann","date":"October 15, 2006","format":false,"excerpt":"These are the concluding paragraphs of Mark Nadel's white paper on real estate commissions. The executive summary has been quoted all over, but I think this text is more compelling. For what it's worth, I think Nadel has hit a home run. There are things he doesn't know about, which\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15720,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/15720\/youre-a-master-cat-skinner-the-good-news-and-the-bad-news\/","url_meta":{"origin":1041,"position":4},"title":"You’re A Master Cat Skinner – The Good News and The Bad News","author":"Jeff Brown","date":"April 2, 2012","format":false,"excerpt":"Are you the 'go to' guy\/gal? Do you list a lotta property and do it well? Are you a leader? Though I'm sure many will say charisma is required, I beg to disagree. It never hurts, but in the end, the Lord created the ultimate equalizer to charisma: Results. Today,\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":521,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/521\/the-fetal-flat-fee-contract-language\/","url_meta":{"origin":1041,"position":5},"title":"The fetal flat fee: Contract language . . .","author":"Greg Swann","date":"October 7, 2006","format":false,"excerpt":"The first transaction we do with the flat fee as a matter of policy will probably come together tomorrow or Monday, but, as I had mentioned, Cathy has been playing with the idea. She has a contract in play right now, so I had to write language for the Buyer-Broker\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1041"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1041\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}