It’s pretty simple. The way most modern real estate brokerages work is they charge their REALTORS® a “desk fee.” For example, a desk fee can be $500 per month. On top of that brokerages typically also charge something called a “deal fee” which is paid to the brokerage for each successful transaction a REALTOR® executes. For example, a desk fee can be $250 per successful transaction.
The desk fee is not dependent on sales; therefore, it is the most consistent stream of revenue for many brokerages. If a brokerage has 100 REALTORS® their monthly revenue from the $500/month desk fee will be $50,000; however, if they have 200 REALTORS® their monthly revenue will be $100,000.
While productive agents are ideal, the number of REALTORS® at a brokerage is likely the key to success. For the most part, real estate brokerage will recruit anyone with a licence. It doesn’t matter whether you have one week of experience or 20 years of experience the monthly desk fee is the key to success.
When I received my licence many brokerages offered me large incentives to join the brokerage. Few asked what I had to offer, it was more of a sales pitch in terms of why I should join their brokerage. When you think about it – it makes sense. The brokerage is most interested in the desk fee. Productivity is the bonus.