Not sure if my previous post had gone through -- here it is again. I have recently passed the state examination for NYC salesperson. I have several questions and welcome any suggestions. 1) How to get a sponsoring broker: I have been searching for investment properties for myself for weeks now. I have met many brokers in the process, but have not yet found a suitable broker who I feel comfortable... [more]
Not sure if my previous post had gone through -- here it is again.
I have recently passed the state examination for NYC salesperson. I have several questions and welcome any suggestions.
1) How to get a sponsoring broker: I have been searching for investment properties for myself for weeks now. I have met many brokers in the process, but have not yet found a suitable broker who I feel comfortable to work for in the future. I hope this person will both find me a few investment properties and also sponsor my salesperson license.
I understand that if a broker holds my license, he gets a share in what I earn. But what if the BROKER brings in a client, do I get a cut? In this economy, most agents from firms such as Corcoran and Elliman do not have that many sales listings anyway. I find most brokers in general only have 4-5 listings in the range of a $1 million to $6 million (if they are lucky), as anything pricier will go to a few star brokers. This is to say, other than the selective few, most brokers in the city do not have enough income or workload to share his commission with a salesperson. (??) So what would be the incentive for these brokers to want to hire a salesperson? Or, does it mean that I have to approach only the star brokers of a particular "group" at one of the major firms?
2) What to do if I get employed as a salesperson and still want to
buy: After getting signed by a brokerage firm, how does the commission
structure work if I want to purchase properties? I know it depends but I'd like to get a general idea. Here, I want to point out that I do not intend to "promise" any potential sponsoring brokers that I will buy just so they can hire me. But the truth is that I probably will do -- so if I do get a share of the commission, I will buy AFTER getting a sponsoring broker.
3) In a "typical" contract between a sponsoring broker and a salesperson, how much can the salesperson earn in commission if the sponsoring broker brings in the client? I know contracts vary, but I am eager to find out how much is considered as a reasonable and acceptable split. Also, in a standard contract, is health insurance and other benefits included?
4) To obtain a sponsoring broker, should I approach individual brokers or the brokerage companies directly? In other words, does the "sponsorship relationship" exist between a broker and a salesperson or between a brokerage firm (Elliman, Sotheby's, etc) and a salesperson? In the past, I have only approached individual brokers, since I need their help in purchasing some investment properties.
Thank you so much for taking the time to answer my many questions!
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Response by Linden
over 16 years ago
Posts: 15
Member since: May 2009
Wow. I'm in the salesperson course now. You should really know most of this stuff already. I'm only half way through but I'll take a crack at this:
1) You get sponsored by calling or emailing a firm and trying to set up an interview. But why would a broker sponsor you if you're not capable of finding properties for yourself?! Finding the properties is the easy part. Anyone can do it. Read the "why do I need a buyer's broker" threads for some insight. It's not about giving your client a list of properties to go see. Most buyers have the list already and go to an agent for some added value. That value is hotly debated here, but it's clear many buyers use it for a variety of reasons (time, knowledge of certain nabes, buildings, boards, expertise in negotiating, hand holding, etc). Please tell us about these investment properties. Where are they? What are you looking for? I'm so curious.
If a broker brings in a client there's no way in hell he's going to give you a cut unless it's an exclusive on some piece of crap rental that he wants you to go show 24/7. The owner will pay the firm a one month fee and you'll get a cut of that... half if you're lucky.
There are a couple incentives for a broker to take you on. There are monthly fees you're going to have to pay the broker... desk fees, technology fees, fee for your business cards, etc, so your broker's going to make money as soon as you walk through the door. Then, the only leads the broker is going to give you are rentals, where you're going to be hustling around the city showing apartments. If you manage to get any leases signed your broker is going to collect half or more for doing nothing. So it's really to his/her benefit to have as many rental agents running around as possible.
2) You don't get employed as a salesperson, you're an independent contractor. The commission structure depends on the firm. Let's say the listing agent and the seller agree on a 6% commission. You could save anywhere from 3% if your firm pays out 100%(minus a flat fee to your broker depending on the size of the sale) to 1.5% if the firm only pays out 50%.
3) I'm not sure what you mean... are you talking about duel agency? You are a listing agent and your broker is acting as a selling agent?
You're going to be an independent contractor so you're going to pay your own health insurance, SS tax, UBT, contribute to an IRA or SEP. My guess is the larger firms will have access to some group rate health, dental and life insurance which will save you a little over getting an individual plan, but not much.
4) You should first do some homework on the different firms. Do they offer training (if so, what kind?) or do they pair you up with an experienced agent, or do they just show you to your desk? What kind of fees do they charge? What's the commission? Does the commission structure change over time or by performance? Do they pay for marketing? Does your monthly fee keep you around or do have to bring in a minimum amount of business? What kind of leads, if any, can you expect?
Anyways, good luck. I'm sure the experienced agents on this board will have corrections and some helpful advice.
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Response by eastsidebroker
over 16 years ago
Posts: 166
Member since: Aug 2009
not all brokerages charge desk fees. but i would say that td99 seems really unprepared to begin his career
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Response by Fluter
over 16 years ago
Posts: 372
Member since: Apr 2009
Yeah, I agree with eastsidebroker, but I doubt it's your fault. Wherever you got your education for licensing sure should have done a better job.
What in the world did you use for a textbook? I suggest you hit Amazon.com and look for some books, buy them and read them.
Also, why don't you attend one of Citi-Habitats Wednesday open houses for prospective agents. No you don't have to join up with them, but hit 'em with some of your concerns.
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Response by eastsidebroker
over 16 years ago
Posts: 166
Member since: Aug 2009
i took my classes at baruch. i felt that they did a good job, and i felt better prepared when i started. i might have went overboard, took some re finance classes to really try and get a better understanding. but the guts of the industry really have to be learned on the job
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Response by eastsidebroker
over 16 years ago
Posts: 166
Member since: Aug 2009
and there is a thing as business common sense, some innate ability to know what to do as well. so have it, most don't
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Response by Fluter
over 16 years ago
Posts: 372
Member since: Apr 2009
Oh, sorry, eastsider, my comments were actually directed to td99! Sorry for the bad editing on my part. I think td99 didn't get her or his money's worth in class. You could teach the class ;)
Anyway, td99, if you're still listening, I think you need more than schmucks like me on SE talking to you! You need a brokerage that will help, and books and stuff.
Very best of luck to you
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Response by ab_11218
over 16 years ago
Posts: 2017
Member since: May 2009
td, it really doesn't seem like you're a sales person. there's really noone to teach you the ropes. you have to go out and grind it out. this is why 99% of people who get the license don't use it after 6 months or so.
you have to be a go getter and be able to do things yourself. your questions are extremely basic and with just a little research, you should have been able to get some answers.
sorry to be so blunt, but this is not 2005 where no skills or knowledge was needed to make a sale or get a lease signed. it's tuff out there.
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Response by td99
over 16 years ago
Posts: 3
Member since: Aug 2009
Thank you all for clarifying my questions and giving some honest advice! Some of my previous understanding of the commission sharing structure between a broker and a salesperson is probably too naive. I was once misled by a broker to believe that if he holds my license, I will get a cut in whatever he makes. I guess this is not true at all.
Linden -- Thank you for your lengthy reply. Yes I can find properties for myself, but I don't yet feel comfortable buying a property without a broker. I am currently looking for residential condo units downtown and also a townhouse in prime UES. I am originally from Europe and it's my husband's job that brought us to NY 2 years ago. As we plan to reside in the US for many years to come, I plan to buy, renovate, and sell prime UES townhouses. But as I am fully aware that I don't know enough about this market, I thought the best way to understand it is to work as a RE salesperson/broker.
Anyway, at this time, we have a real urgency to buy. We believe that it is just a good time to allocate some cash in real estate. But as important as finding a sponsoring broker for myself, we also need to find a capable buyer's broker. Most of the brokers that we have met really have too little knowledge of the market (they either don't know the buildings or cannot give knowledgeable advice). Hopefully some good properties will surface after the September holidays so we can buy, then I can slowly start my career as a re salesperson rookie and gain more understanding of this market. I am hoping to work with a brokerage firm that frequently deals with UES townhouses -- just so I can get a more comprehensive understanding of this product.
eastsidebroker -- I plan to take some re finance classes fall. I hope this will help with my future career (hopefully) as a salesperson and also my re investment endeavor.
Fluter and ab_11218 -- Thank you for taking the time to comment. I know I have lots of work ahead!
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Response by drdrd
over 16 years ago
Posts: 1905
Member since: Apr 2007
Rehabilitating prime UES townhouses will be a costly venture. Perhaps you just want to move slowly on your personal RE plans & day by day you'll learn the ropes. Best of luck to you.
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Response by LuchiasDream
over 16 years ago
Posts: 311
Member since: Apr 2009
td99 may I ask what real estate school you went to to get your license?
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Response by ph41
over 16 years ago
Posts: 3390
Member since: Feb 2008
td99 - actually ,from what you're saying re: buying properties for yourself, but working as a salesperson to get experience, I would say that I would never want to hire you as a seller
s OR buyer's broker, because you would definitely not have your client's interest at heart - you would be looking for the best deal for yourself.
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Response by ph41
over 16 years ago
Posts: 3390
Member since: Feb 2008
That's called conflict of interest.
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Response by ab_11218
over 16 years ago
Posts: 2017
Member since: May 2009
td, selling real estate as a sales person does not have to mean that you know anything about the market. most good brokers are too busy to show you the ropes unless you tell them what you are looking for. they will see you not as a trainee, but as $$$$ that they will pocket when you will buy a property and they will get the commission. after renovation, they would expect to make more money of of you by selling that same property.
those same brokers can easily take advantage of your lack of understanding and within a few months get you into a purchase that will be a huge mistake, dollar wise. the best way to learn the market is to go and see many many listings. you can review sale histories of many places, but not seeing what condition they were in when sold will put you at a disadvantage.
some of the dumbest people who i've met got their RE license after taking the test numerous times. this license does not give you knowledge. as you can see from posts on here, most of the brokers out there are low life salesman/women who give car salesman a good name.
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Wow. I'm in the salesperson course now. You should really know most of this stuff already. I'm only half way through but I'll take a crack at this:
1) You get sponsored by calling or emailing a firm and trying to set up an interview. But why would a broker sponsor you if you're not capable of finding properties for yourself?! Finding the properties is the easy part. Anyone can do it. Read the "why do I need a buyer's broker" threads for some insight. It's not about giving your client a list of properties to go see. Most buyers have the list already and go to an agent for some added value. That value is hotly debated here, but it's clear many buyers use it for a variety of reasons (time, knowledge of certain nabes, buildings, boards, expertise in negotiating, hand holding, etc). Please tell us about these investment properties. Where are they? What are you looking for? I'm so curious.
If a broker brings in a client there's no way in hell he's going to give you a cut unless it's an exclusive on some piece of crap rental that he wants you to go show 24/7. The owner will pay the firm a one month fee and you'll get a cut of that... half if you're lucky.
There are a couple incentives for a broker to take you on. There are monthly fees you're going to have to pay the broker... desk fees, technology fees, fee for your business cards, etc, so your broker's going to make money as soon as you walk through the door. Then, the only leads the broker is going to give you are rentals, where you're going to be hustling around the city showing apartments. If you manage to get any leases signed your broker is going to collect half or more for doing nothing. So it's really to his/her benefit to have as many rental agents running around as possible.
2) You don't get employed as a salesperson, you're an independent contractor. The commission structure depends on the firm. Let's say the listing agent and the seller agree on a 6% commission. You could save anywhere from 3% if your firm pays out 100%(minus a flat fee to your broker depending on the size of the sale) to 1.5% if the firm only pays out 50%.
3) I'm not sure what you mean... are you talking about duel agency? You are a listing agent and your broker is acting as a selling agent?
You're going to be an independent contractor so you're going to pay your own health insurance, SS tax, UBT, contribute to an IRA or SEP. My guess is the larger firms will have access to some group rate health, dental and life insurance which will save you a little over getting an individual plan, but not much.
4) You should first do some homework on the different firms. Do they offer training (if so, what kind?) or do they pair you up with an experienced agent, or do they just show you to your desk? What kind of fees do they charge? What's the commission? Does the commission structure change over time or by performance? Do they pay for marketing? Does your monthly fee keep you around or do have to bring in a minimum amount of business? What kind of leads, if any, can you expect?
Anyways, good luck. I'm sure the experienced agents on this board will have corrections and some helpful advice.
not all brokerages charge desk fees. but i would say that td99 seems really unprepared to begin his career
Yeah, I agree with eastsidebroker, but I doubt it's your fault. Wherever you got your education for licensing sure should have done a better job.
What in the world did you use for a textbook? I suggest you hit Amazon.com and look for some books, buy them and read them.
Also, why don't you attend one of Citi-Habitats Wednesday open houses for prospective agents. No you don't have to join up with them, but hit 'em with some of your concerns.
i took my classes at baruch. i felt that they did a good job, and i felt better prepared when i started. i might have went overboard, took some re finance classes to really try and get a better understanding. but the guts of the industry really have to be learned on the job
and there is a thing as business common sense, some innate ability to know what to do as well. so have it, most don't
Oh, sorry, eastsider, my comments were actually directed to td99! Sorry for the bad editing on my part. I think td99 didn't get her or his money's worth in class. You could teach the class ;)
Anyway, td99, if you're still listening, I think you need more than schmucks like me on SE talking to you! You need a brokerage that will help, and books and stuff.
Very best of luck to you
td, it really doesn't seem like you're a sales person. there's really noone to teach you the ropes. you have to go out and grind it out. this is why 99% of people who get the license don't use it after 6 months or so.
you have to be a go getter and be able to do things yourself. your questions are extremely basic and with just a little research, you should have been able to get some answers.
sorry to be so blunt, but this is not 2005 where no skills or knowledge was needed to make a sale or get a lease signed. it's tuff out there.
Thank you all for clarifying my questions and giving some honest advice! Some of my previous understanding of the commission sharing structure between a broker and a salesperson is probably too naive. I was once misled by a broker to believe that if he holds my license, I will get a cut in whatever he makes. I guess this is not true at all.
Linden -- Thank you for your lengthy reply. Yes I can find properties for myself, but I don't yet feel comfortable buying a property without a broker. I am currently looking for residential condo units downtown and also a townhouse in prime UES. I am originally from Europe and it's my husband's job that brought us to NY 2 years ago. As we plan to reside in the US for many years to come, I plan to buy, renovate, and sell prime UES townhouses. But as I am fully aware that I don't know enough about this market, I thought the best way to understand it is to work as a RE salesperson/broker.
Anyway, at this time, we have a real urgency to buy. We believe that it is just a good time to allocate some cash in real estate. But as important as finding a sponsoring broker for myself, we also need to find a capable buyer's broker. Most of the brokers that we have met really have too little knowledge of the market (they either don't know the buildings or cannot give knowledgeable advice). Hopefully some good properties will surface after the September holidays so we can buy, then I can slowly start my career as a re salesperson rookie and gain more understanding of this market. I am hoping to work with a brokerage firm that frequently deals with UES townhouses -- just so I can get a more comprehensive understanding of this product.
eastsidebroker -- I plan to take some re finance classes fall. I hope this will help with my future career (hopefully) as a salesperson and also my re investment endeavor.
Fluter and ab_11218 -- Thank you for taking the time to comment. I know I have lots of work ahead!
Rehabilitating prime UES townhouses will be a costly venture. Perhaps you just want to move slowly on your personal RE plans & day by day you'll learn the ropes. Best of luck to you.
td99 may I ask what real estate school you went to to get your license?
td99 - actually ,from what you're saying re: buying properties for yourself, but working as a salesperson to get experience, I would say that I would never want to hire you as a seller
s OR buyer's broker, because you would definitely not have your client's interest at heart - you would be looking for the best deal for yourself.
That's called conflict of interest.
td, selling real estate as a sales person does not have to mean that you know anything about the market. most good brokers are too busy to show you the ropes unless you tell them what you are looking for. they will see you not as a trainee, but as $$$$ that they will pocket when you will buy a property and they will get the commission. after renovation, they would expect to make more money of of you by selling that same property.
those same brokers can easily take advantage of your lack of understanding and within a few months get you into a purchase that will be a huge mistake, dollar wise. the best way to learn the market is to go and see many many listings. you can review sale histories of many places, but not seeing what condition they were in when sold will put you at a disadvantage.
some of the dumbest people who i've met got their RE license after taking the test numerous times. this license does not give you knowledge. as you can see from posts on here, most of the brokers out there are low life salesman/women who give car salesman a good name.