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Why do real estate agents venture into setting up their own brokerage?

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  • Sep 23rd, 2015 5:08 pm
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[OP]
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Apr 21, 2004
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Why do real estate agents venture into setting up their own brokerage?

Based on OREA's website, all it takes is for the real estate agent to take just two more courses:
https://www.orea.com/OREA-Real-Estate-C ... ker-Course

I can think of some disadvantages, like:
  • additional administration / management oversight
  • additional office space
  • additional licensing fees
  • possible hiring of administrator/office reception
But seeming advantages to the realtor who obtains the broker license would be:
  • not have to pay for commission or split, which sometimes is an onerous 20-30% of the commission
  • not having to pay for monthly desk fee
  • able to dictate the direction of the business
Your thoughts (including other advantages and disadvantages) on this matter? Anyone know how much the brokerage licensing amount to annually and if the residence can be designated as the principal office? Many thanks.
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Apr 22, 2015
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Toronto, ON
You would need a huge bankroll to start your own brokerage, but if you hire a lot of people and get a percentage of all of their sales(10-40% )it's a very lucrative venture.
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Jan 14, 2006
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AgentRoyal wrote: You would need a huge bankroll to start your own brokerage, but if you hire a lot of people and get a percentage of all of their sales(10-40% )it's a very lucrative venture.
If you don't go into franchise, what are the costs involved in setting up and maintenance of a brokerage?
[OP]
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kasianman wrote: If you don't go into franchise, what are the costs involved in setting up and maintenance of a brokerage?
This is what I would like to know too. I don't think all real estate brokerages will required a big upfront investment.
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Apr 22, 2015
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kasianman wrote: If you don't go into franchise, what are the costs involved in setting up and maintenance of a brokerage?
It's just like any other brick mortar business, you will have to lease a space, hire admin, cost for computers office supplies etc, you would have to be paying for all of this until you have enough sales people hired consistently making sales , I'm sure it would take a couple years to see profit and keep in mind you will still have to be paying rent and all other overhead costs in the mean time.
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Thanks AgentRoyal
Looks like it's not worth it to become a broker if you are gonna be a part-time/casual real estate agent.
[OP]
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kasianman wrote: Thanks AgentRoyal
Looks like it's not worth it to become a broker if you are gonna be a part-time/casual real estate agent.
Or you can run it with your significant other at home and keep many of the costs down. :)

Not sure how much in saved commission will be required to offset these recurring expenses though.
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May 28, 2012
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Saskatoon
alanbrenton wrote: Or you can run it with your significant other at home and keep many of the costs down. :)

Not sure how much in saved commission will be required to offset these recurring expenses though.
Just looking at my local real estate insert...I see a lot of the RE brokerage houses are run by husband and wife teams, and their children when they get old enough to join the business. I think having that family connection gives them an edge because they are working as a team for the sake of the company, rather than simply an employee. It would be a lot of work to make a go at it, not nearly as glamorous as those depictions from the reality shows.
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Jan 10, 2007
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the brokerage makes all the money
[OP]
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kasianman wrote: Keep us updated thanks!
New Sole Proprietorship Documentation.doc
http://s000.tinyupload.com/index.php?fi ... 8383063458

New_Reinstatement Brokerage_Branch
http://s000.tinyupload.com/index.php?fi ... 4963265169


As for partnerships, this was the response:

We don’t have anything specific to the setup of partnerships just what is required by RECO to set up a brokerage (attached). You may wish to seek legal advise on these matters.


If anyone knows or is in the process of opening a brokerage with a partnership structure, I'd be very appreciative if you can share the requirements, if different from sole proprietorship. TIA.
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With computers and software now the operation of a brokerage firm from your home is easy peasy. That's what I plan to do and have it all virtual. No need for expensive office space and it also allows me to have a better brokerage name that some of the cheesy ones I see around.
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eonibm wrote: With computers and software now the operation of a brokerage firm from your home is easy peasy. That's what I plan to do and have it all virtual. No need for expensive office space and it also allows me to have a better brokerage name that some of the cheesy ones I see around.
Like Superman Realtor?
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Jan 12, 2014
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Larger margin. But if you don't have enough business the costs will catch up to you. also running a business is much different than just trying to sell more and make more revenue. you need to be knowledgeable in many facets: accounting, marketing, business operations just to name a few....etc.
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georgyfordfocus wrote: Larger margin. But if you don't have enough business the costs will catch up to you. also running a business is much different than just trying to sell more and make more revenue. you need to be knowledgeable in many facets: accounting, marketing, business operations just to name a few....etc.
I've already costed it out. The costs are incredibly low and the accounting, marketing and business operations that need to be managed pales in comparison to the other businesses I have run.
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A lot of agents take the broker courses and don't set up their own brokerage. You'll see it in ads all the time. Some are identified as Sales Representatives and others as Brokers but they are still working for the same company...just now using the Broker title.
When your mind says give up, hope whispers "one more try"
Never say never
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sillysimms wrote: A lot of agents take the broker courses and don't set up their own brokerage. You'll see it in ads all the time. Some are identified as Sales Representatives and others as Brokers but they are still working for the same company...just now using the Broker title.
Yes I noticed. I wonder why they become brokers and not set up their own brokerage.

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