Re: I have RE license in referral program…help! - Posted by Ron (MD)
Posted by Ron (MD) on July 19, 2001 at 18:55:54:
Kate,
Here’s what I do…
The houses I buy are usually $15k-$25k fixers. Frankly, the commission is peanuts. I go through my broker (i.e., represent myself as an agent) if I’m making an offer on a property that’s been sitting on the market for a while. My logic is that the listing agent will be happy to unload it and doesn’t care if he/she is getting both sides of the commission. However, if I’m making an offer on a new listing, I almost always call the listing agent, identify myself as an agent, but tell them that I would like them to act as both the listing and selling agent. I don’t say it explicitly, but obviously my expectation is that I will have a better shot if the listing agent is getting both sides of the commission.
Also, anytime an agent calls me about a new listing or a potentially good deal on a current listing, I give him/her the entire commission.
When I’m selling my houses, I am usually able to find a buyer before having to resort to listing them. I would estimate that I list (and pay a commission) on about 25% of my rehabs.
I do not generate many commission dollars as an agent. As a result, my split is 50/50. However, I made a very attractive deal with my broker for any transaction where I’m the principal and agent.
I have always been very honest with my office managers. I don’t tell them exactly how many houses I’m buying and selling without going through the broker, but they have known that I do it on a regular basis.
I have always recognized that the low commissions I generate make me somewhat vulnerable to being asked to move my license. (I prefer to hang my license with one of the larger, more reputable brokers. A smaller broker probably wouldn’t care what volume I do…anything is better than nothing.) To help maintain my tenure in the office, I try to fit in as best I can. I try not to go into the office if I’m dressed too casually, I’m friendly with the other agents, and I go to most of the Wednesday sales meetings (I actually think they help keep me up to date on the market and other RE issues.)
Having said all that, if I could get MLS access without a license, I’d drop my license in a minute. I haven’t had any meaningful problems relating to being licensed and an investor, but I know there is some exposure there.
Hope that helps.
Ron Guy