Main cost of a real estate agent is all kind of fee, broker fee and commission fee are two of the major fees. If an agent can reduce them, the saving go straight to the agent’s bank account. Here is a comparison of two low fee brokers and a traditional broker.
Let us put some number to the comparison – an agent sells one house with $250K final transaction price in one year.
Virtual Realty Group
The virtual realty group has an excellent commission-plans (http://thevirtualrealtygroup.com/commission-plans). The group offers flat 100% commission after tri-annual membership fee of $99. Agent does not pay any more additional junk fee. For agent in Georgia, the flat fee is $395 per transaction. This option is an excellent option for low volume agent, such as part time agent. With virtual broker, the commission is flat $395 with $297 annual fee. Yearly total is $692.
Virtual Properties Realty
Virtual Properties Realty offers three commission plans. For low volume agent, the 90/10 plan or the $49/month with $200 transaction fee plan are very reasonable. Let’s use the one transaction per year (same as above) to compare the cost.
90/10 plan with $50 monthly fee plan
Broker’s take on the $250K transaction is:
$250,000 x 3% x 10% = $750
Total Yearly fee is $50 x 12 + $750 = $1,350
$49/month with $200 transaction fee
Broker’s yearly take with the $250K transaction is:
$49 x 12 + $200 = $788
New broker
A new broker wants to build up his team. He offers 80/20 commission split without monthly broker fee. He also offers free hands on training for new team member.
Broker’s take on the $250K transaction is:
$250,000 x 3% x 20% = $1,500
Traditional broker
An agent pays $100/month broker fee to stay with the traditional broker. If the agent is with an traditional full service broker which charges 40% on commission, broker’s take on her commission is:
$250,000 x 3% x 40% = $3,000
That is on top of yearly broker fee of $1,200 ($100/month)
The agent’s yearly total cost with a traditional broker is $4,200
Summary
Virtual Realty Group – flat fee Georgia plan: $692/year
Virtual Properties Realty – 90/10 plan: $750/year
Virtual Properties Realty – $49/month with $200 transaction fee: $788/year
New Broker – $1,500/year
Traditional Broker – $4,200/year
For low volume part-time agent, she should consider the cost of business and interview various brokers to find the best fit for her. Naturally, she should look for way to keep more money for herself.