Fees associated with a broker

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Denisa9850177
Denisa9850177 Posts: 102

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edited November 2023 in Real Estate Career Mentor Community

What are typical fees associated with brokers when you hang your license with them? What are some that I need to ask about when I do the interview?

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  • Art Valenzuela
    Art Valenzuela California Licensing Career Launcher, California Licensing Posts: 61

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    @Denisa9850177 The fee/expense you will need to plan for is your board or association fees. These are normally paid annually (In January) and pro-rated if you join anytime after that. They can run from 800.00 to 1200.00 per year. Other fees/expenses to consider are open house/for sale signs (custom for you), business cards and general marketing. Many brokerages today, will have a start up fee/expense that will help offset the costs for some of these essential marketing tools. For example, they may charge you 120.00, but that covers 500 business cards, 6 open house signs, 2 for sale signs and company branded shirt or hat. Some brokerages still charge a monthly fee normally referred to as a marketing or desk fee. This can range from 0 to 150.00 per month. Normally it's used to cover things like printing expenses, training, office expenses, etc. Most fees/expenses are charged when you close a transaction. In addition to the amount of your "split" with the broker, you may be charged for franchise/royalty fees, marketing/administration fee, etc. The best thing to do is realize, there is a cost of doing business and as an independent contractor, many many things are used as deductible or a write off for your taxes (check with your own CPA/Tax preparer). Have the person that hires you give you a breakdown of all the fees/expenses by using an example of a monthly billing statement and a closing statement that show your earned commission and the deductions for all your expenses.

    Lastly, and really the most important thing to remember, is not how much you are being charged, but the value the brokerage has for you as an agent. More times than I can even remember, I've seen an agent leave a company because of the fees/expenses and then see their production fall considerably as they did not realize the environment they were in was helping them succeed at higher level than they could of alone. I know that this can seem overwhelming but find the brokerage that makes you feel supported and cared for and try not to worry so much about the fees. As you grow in experience you will gain leverage for getting compensation packages that are more in your favor. At the beginning you will need a lot support and guidance but brokers/brokerages recognize that there is value to them in having an experienced agent join them so they are willing to give more. Have a great day and continued success on your journey.

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