Entry by Keith Bruce

Brokerage Facilitation of Transactions 2


I have been working on an office procedural process for hourly fee/fee-for-service transactions…  As always, I tend to over think it and wonder how I facilitate transactions once other brokers in our office become ACRES.  Granted we have procedures for processing paperwork for the traditional model, but besides state and local fees, does anyone have a suggestion on how the brokerage itself should charge brokers for facilitating hourly fees/fee-for-service transactions….  I am not asking for a specific number, just a general idea of what other office owners are doing… 

I am a huge fan of Go Daddy and wonder has anyone used them to develop a website which implements an online calculator to compute a client’s fees then offers PayPal or Google Checkout to process these transactions?  ACRE has a great website members can purchase as an individual broker but does ACRE have advice  for online facilitation for hourly fee/fee-for-service models? 

 I will call Go Daddy tomorrow and see what suggestions they have for a storefront application…  I think traditional banks would be too expensive for their storefront applications…  

I feel fairly comfortable with my specific fee schedule but uneasy when it comes to brokerage procedures when processing transactions for our brokers who will soon be ACREs.

I gave IE9 the boot...  Too much trouble!!



Go look at EnterYourHours.com


You can customize it with your logo.

As I recall, there is payment option attached, But I may be wrong.

In Houston, Hourly is NOT going to be a large niche. Although I have a friend who is a commercial broker and has been ONLY charging hourly for 15 years.

He has not other compensation options, only hourly fees $225.

He started at $100 in 1996.

Because of Texas law, fiduciary duty requires that we perform more tasks.

I just started three weeks ago, but decided that I am reducing my fees to give all the commissions to buyers, but charge 50% of commissions as a consulting fee   and    one fifth of the estimated savings is payable up front upon signing the buyer rep agreement.

So it is easy to explain.  Let the customer decide how much commission they want to save or keep or get rebate or refund.  For each $5 they want, they give me $1 upfront. Up to a maximum of half the commission.

I think consumers will be concerned about running up the bill and will prefer a predetermined specific known project fee.


Keith, I've never been a fan of publishing calculators or fees, mostly because I strongly believe that the tasks that should be performed (and thus paid for) should be dependent on the individual client's needs. This is not to take away from your thought process but I feel that one of the things that differentiates consulting is that it's individualized - not one size DOESN'T fit all. 

In my practice, I would always employ the needs analysis and figure out and present their options once their needs were established. Calculators and pre-determined fees I think, takes away from the individuality of each client. This is my opinion only - would love to hear how others think about this.

Great points and advice…  I greatly appreciate you both sharing your thoughts… 

I agree with Mollie,  I feel that we should customize our fees and services to the individual.  I have an idea where I want to be as far as my hourly fee, however if someone approaches me that has a lower priced home and fewer dollars to spend up front I want the abilty to negotiate my rates and how I collect the fees.  


This raises the question of what percentage of the billable hours charged does the brokerage firm make?

The same question whould also apply to the flat fees charged.

The principal broker would have to approve the services to be provided in relation to the risk and liability as may be involved in providing same.


I agree with you!!  I want our Brokers to feel comfortable with their monies once the brokerage processes their consulting fees. 

If acceptable to the principal broker, then I would assume that they would establish a office policy & procedure manual and the rates to be charged.

The office policy would also require that the consulting tasks are within the scope of the consultants knowledge, training and experience, if not then it would have to be a referral to another office member who had the required ability.

To gain the principal broker’s acceptance, one would have to show them the benefits of a positive income stream on billable hours.

I agree with John. Broker's may look at this as a reduction in income until an income streat starts to come in. This is where education comes in outlining the benefits.

The broker could still charge his percentage of the total amount paid to the agent. Since the sale could fall through and the client move on to another brokerage, the broker needs to have a way to claim the amount owed to him/her from the amount already collected by the agent.

Is it always the case clients pay the Broker no matter what the fee arrangement and the Broker distributes a share to the agent based on the independent contractor agreement between agent/Broker?

There are many brokerage business models from the traditional %split which changes with agent business volume, a fixed monthly office fee plus a smaller broker split % to the KW model (split with an annual cap) to 100% agents that pay a larger monthly brokerage fee.

I was with RE/MAX as a 100% agent so could negotiate anything I wanted with the client. I also paid significant monthly brokerage, RE/MAX regional marketing and RE/MAX corporate fees whether I had business or not.

An additional consideration for agent fees with an independent brokerage is if the broker also conducts personal real estate business. At RE/MAX, the managing broker did not conduct personal real estate business so was not in competition with brokerage agents.

This page contains a single entry by Keith Bruce published on August 29, 2011 5:42 PM.

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