Are you a broker? Can you answer a few questions about how your firm operates? The good and bad?
Hi Guys, I am a broker with a national firm but in a tertiary market.  There has been some disagreement in my office as to how we should operate and what should be provided to its brokers.  The owners of the firm own and primarily focus on a separate residential firm they own in the area being that the commercial side closes a few hundred million a year while the residential firm closes a few billion.  FYI our commercial firm is still the market leader every year at those numbers.

A lot of the frustration is over what the agents are responsible for vs what the company pays for.  I will list how these are handled within our firm and if you could respond with how these vary at your commercial firm.  We are having a strategic planning session soon to mediate these disagreements, I would love to see how these stack up against others in the U.S., Thanks!

**Listing services:**

The company splits the cost of Costar, Loopnet, and Catalyst.  We are required to be a part of the MLS and have to pay for the membership on our own.  Any additional services like Crexi we are on our own.

**Support:**

We handle all of our own documents, listings, contracts etc.  The company pays for dotloop for us but we handle everything paperwork wise.  They offer "agent services personnel", but we must pay $28 an hour for them to assist us.  We do not have a CRE CRM, we must pay for our own if we want to use one.

**Marketing:**

We have a marketing team that we can pay for creating marketing materials otherwise we handle it ourselves.  They will split photography costs with us if we use their photographers.  Any video or additional marketing needs is all on our own.  We are responsible for getting these uploaded and organized for listings.  They offer an online portal where we can drag and drop our images into a few generic pre made flyers.  Any digital marketing we pay for and do on our own.  They provide signs but we pay for the name riders at $100 a pop.

**Commission:**

We start at 50/50.  Its a rather slow move up but we can get as high as about 85/15.  75/25 you would need to be selling about 10m a year.  Maxed out at 85 you would need to be selling about 20m.

I appreciate everyone's input!   This will be very helpful in seeing what is pretty standard out there and what we should be pushing for change on.  Part of our issue is about half of our office is 65+ and hates any form of change even if its obviously for the better.  The other half is 30-50 and wants to modernize the way things are done.  Thanks again!
[{"id": "f7jpgar", "text": "I\u2019ve always wondered what the split was like at a national flag. I work for a small group the highest split I can get is 70/30 and I\u2019d need to do around 10M for that. \n\nI know a broker that does multifamily sales and he did 175M in transactions last year I bet his split is in that 75-85 range.", "replies": [{"id": "f7k1b7y", "text": "Wow. I am 50/50 to 80k gross commission, then 75/25 to 160k gross commission. After that it is 90/10.  I am at a local firm", "replies": [], "depth": 2}], "depth": 1}, {"id": "f7js0gl", "text": "I am guessing your at coldwell or KW or a name similar to that?\n\nI\u2019ll break down your post;\n\nListing services:\nMost CRE firms are footing the boot themselves and NOT asking brokers to pay. Costar/loopnet(moreso costar) is an essential cog to your business that many would agree is essential in commercial. I think it\u2019s ridiculous you pay for the MLS.\n\n\nSupport:\nPaying someone $28/hr? That\u2019s what a junior is for. Every CRE firm has some sort of CRM that again - the house will typically foot. You\u2019re going to get more variety here but it\u2019s all pretty standard.\n\nMarketing:\nAgain this is generally a bill that the house pays. Sometimes teams will take it upon themselves to pay for extra marketing but the basic stuff like signs and brochures from a dedicated marketing team is standard. A lot of the larger brokerages will comp gifts/tickets/dinners for potential/current clients\n\nCommission:\nMost large brokerages are at 50/50 split  ( they provide immense resources to justify this) but you may see some creep up to 70/30 (more rare) while the smaller boutique brokerages you will see higher splits overall compared to the big guys, Though you may have not have as many resources as the big boys. This doesn\u2019t mean you should be paying for costar/loopnet/marketing/$28hr admin still..\n\nBasically you\u2019re in a resi-commercial house which can make it difficult to figure things out because the way resi and commercial are run is day and night. There are several ways to justify the need to cover costs for these resources, it just depends what angle(s) you want to go at. You shouldn\u2019t be footing 100% of your costs for a 50/50 split. Simple as that.\n\nSource: my father is a founding partner in a regional brokerage, I\u2019ve worked for a national firm and started out selling loopnet / costar so I spoke with different brokerages every day about costs. I now work in asset management as I enjoy working on the finance side of things.", "replies": [{"id": "f7jt5nv", "text": "Thanks for the input!  We are a commercial only firm and a big name but the owner partnered with the big name parent company to bring the name to our city.  Essentially this local owner controls everything but we feel the pains of a resimercial office since his other company is residential.  Like I said one battle we have is we live in an above average residential market, the number 2 company in our market has twice the agents yet only does a third of the business.  Our issue is our complaints fall on deaf ears when we close a few hundred million and the residential is closing billions. \n\nWe recently put a letter together with our concerns and presented it.  We asked to bring a cre specific consultant in to spend a day with us and the executives. This is happening soon hence why I asked for this input.", "replies": [{"id": "f7l4ja0", "text": "Times like these is when a group of senior brokers start their own brokerage - you can control how it\u2019s run and there is opportunity for more money. A lot of brokers go off on their own when the company gets too big or they want more control..you see it all the time.\n\nQuestion is: do you and the other group of brokers have enough experience to go off on your own ? You may be doing less than where you are now but you obviously get equity in the firm( good if a larger firm wants to buy you out which almost always happens) and you can get more favorable splits and you really can control it and have commercial be your sole focus. That would also be a good selling point for your clients to stay with you. Something to think about.", "replies": [{"id": "f7lw409", "text": "Glad you brought this up.  This is how our early discussions in the office started.  There is obviously a lot of friction between the younger half of the office and the management. Someone in our office was approached by a regional firm trying to expand into our market. Basically said they would make the initial investment if we could bring on enough brokers to meet certain closed sales requirements and then overtime give us equity in the company. We seriously considered it and as a group made the decision we would put pressure on the owners by insisting on this planning session we are about to have.  If after this planning session we don\u2019t see real change I could totally see a number of us trying to put together our own deal.", "replies": [{"id": "f81v60g", "text": "Yeah based on everything you\u2019ve said here I would highly consider that offer if things don\u2019t change. If you can get the support of a national brokerage to help you start up the office that can go a long way. That equity can really be worth a lot down the road plus all the support you can get from corporate", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f7jsgh4", "text": "Can I ask what the disagreement is over? I\u2019m assuming agents think the broker should provide more, and the brokers think they provide more than enough?\n\nI\u2019m not sure if my experience is much help for a larger firm, but I work in a small firm in a major market (2 brokers, 5 agents) as a \u201cmarketing and research analyst\u201d. I do all property searches for our agents, put together property valuations, brochures, manage listings online, do photography, put together offering memorandums, and manage our email mailing list. Basically an agent gives me an address, I research it, and create everything they may need. The agents just handle the leads, showings, and negotiations. We also have 2 admins that that draft contracts and coordinate transaction dates etc. We have about 70 listings at any given time and various other projects going on with clients (construction, investment, etc.) \n\nThe brokers provide a CRM, signs (unless they are something very specific and high dollar), and the support from staff I described above. Fees and anything else fall on the agents. \n\nI\u2019m sure this is not a standard arrangement. And after several years in my role I can\u2019t say it\u2019s the most efficient for agents to be as hands-off as they are.", "replies": [{"id": "f7jtlp9", "text": "The complaint is due to much of what you describe of your agency, except for the service you are providing. We have no support staff other than somebody at the front desk answering phones. The assistance we can hire for $28 an hour are from the residential company And unfamiliar with anything commercially-based. Overall the entire office feels like we have little to no support and are nickel and dimed for everything we do.\n\nThe push is that we should have people to help input paperwork, help with marketing, and support staff in general so we can concentrate on the deals and not so much of the clerical work.", "replies": [{"id": "f7jvyot", "text": "How many different agents do you have in the commercial side? Do they generally work in similar market segments (industrial, retail, multi family, etc) or do you have a big group working on different types of projects?", "replies": [{"id": "f7k0ksa", "text": "We have about 20 with a quarter of those being semi retired and still dabbling.  Are market isn\u2019t big enough for a single specialization, but most brokers concentrate 75% of their time into one or two segments.  For instance most of my time is spent in multifamily and retail centers but I tend to do a lease or two a month.", "replies": [{"id": "f7kuebl", "text": "You guys should hire a pool of analysts to support the brokers. Much cheaper than junior brokers.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f7k5dcf", "text": "Regional firm, hcol city on west coast, highest market share over cb, jll, colliers, ngkf. \n\nListing services: costar paid for, apto (crm) heavily discounted \n\nMarketing: marketing team at firm does what we tell them.\n\nAgreements/listings/contracts: we have a \u201cbrokerage team\u201d who does all the tedious bullshit bust work but honestly they\u2019re useless\n\nSplits: industry best I\u2019d say: 50/50 to 100k gross commission, 90/10 after", "replies": [], "depth": 1}, {"id": "f7k9ktx", "text": "I\u2019m with a resi-commercial firm in a fairly strong market.  We pay 36/64 until a certain number, then it\u2019s around 10%,  and $200/mo in various office fees. Although we don\u2019t have to be on the MLS. \n\nBeyond that we get a commercial based CRM, Prospect Now,  and marketing software. \nWe pay for our on CoStar, etc.  \n\nZero training or professional development.", "replies": [], "depth": 1}, {"id": "f7l43ya", "text": "If I were you I'd try to get in on that residential biz. That seems to be where the money is in your market. \n\nOutside of that, it sounds like you are at a KWcommercial or a coldwell, like others have said. That may just be part of the deal for those types of firms. If you are set on CRE brokerage, maybe stick this out as long as you can then try and get to one of the bigger commercicla names (CW, JLL etc. ) or even a boutique that is strictly commercial. It is not the standard for brokers to have to pay for anything outside of their parking spot at their office, and client entertainment (which often can be expensed).", "replies": [{"id": "f7lwg6o", "text": "I actually began my real estate career on the residential side. My long-term goal was commercial but I knew in our market it would be much easier to get started residential. I closed over $10 million both years I did it but I\u2019m simply wired for commercial not residential.I simply can\u2019t drive Bob and Susan around one more time looking at houses while they complain about the shade of blue in the bedroom. After being in commercial a while now it\u2019s obvious this is where I belong.", "replies": [{"id": "f7n0j1m", "text": "Haha that sounds like a nightmare. as a commercial broker tho I sometimes wonder how I could hack it slingin homes if I did it for a year.", "replies": [{"id": "f7nkg0i", "text": "Yeah after experiencing it I just could never go back.  Entire different career.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f80wbn2", "text": "I work for a big national firm. We have in house marketing and a wealth of subscriptions agents and staff have access to. I haven\u2019t worked at a smaller firm before but I think having the company provide these services is conducive to a collaborative environment where everyone has everyone\u2019s best interest in mind. If you do push for something like this in your office, be careful that the agents don\u2019t get complacent with what they\u2019ve given. I think it\u2019ll take some long term vision from whoever is calling the shots around your shop, but worth it in the long run.", "replies": [{"id": "f81llrt", "text": "Yes that is part of the push back from the company.  Half our office is 65+ and anything we add they will not utilize. The younger half obviously is the lesser producing.  Chicken and the egg.  We want it to grow our business, owner says grow your business more first then we will talk.", "replies": [], "depth": 2}], "depth": 1}]