Start Selling Real Estate by Valerie Thorne

Author:Valerie Thorne [Valerie Thorne]
Language: eng
Format: epub
Publisher: Festina Lente Press
Published: 2022-12-24T00:00:00+00:00

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Profit-Sharing/Recruiting Agencies: The Lowdown

Earlier, I alluded to profit-sharing chains; these are the national agencies that operate on a profit-sharing and recruiting system that—on the surface—seems like how Amway, Beach Body, or Scentsy works. Some might consider this a pyramid scheme or multilevel marketing, but that is not an accurate description of the profit-sharing business model adopted by certain national real estate chains. Chances are some of the recruiting letters you receive when you first apply for your license will be from these companies.

At a profit-sharing company, the individual employee’s goal is to build a “profit tree/downline” and receive passive income by recruiting people to work for the national company. The company’s goal in encouraging employees to build a tiered, profit-sharing network is to keep them; if the employees/independent contractors leave to go work for a rival agency, they will no longer receive profits from their recruits. If they stay with that company, even if they move to a different office or location within the company, they keep their recruits and that income. Every month, depending on how much business their recruits have done, money will be deposited into their bank account.

Most national chains do not follow this profit-sharing model. That said, two of the three national chains where I worked did offer profit-sharing to their employees, whether salary or commission based. As someone familiar with how these profit-sharing companies work, I can tell you that spending time and energy actively recruiting to build your own downline is an option, not a requirement. You will not be pressured to actively recruit, but they will present the financial benefits as enticement to do so.

It is not unusual at a profit-sharing company for the agents, the office manager, other salaried staff, or the broker to run recruiting ads on Craigslist or Facebook or even in the local paper. If you answer an ad, you will be the recruit of whoever placed it, be they an agent, an office manager, a salaried employee, or the broker.

When you sign with a profit-sharing company, you will be someone’s recruit. Whether you interview as a brand-new agent, or if you have been working as an agent for a while and are looking to change offices, the profit-sharing model should be explained to you. If you sign with them, they will ask you to select a sponsor: the person who influenced you to want to work there. If you say, “No one did,” and explain you came in for an interview to see if the grass was greener, or you were merely responding to a letter you received in the mail as a freshly minted agent, then the person sitting across from you will have the expectation—and motivation—for you to name them as your sponsor.

The sponsor of record is the one who profits off your earnings.

This is not the same as having a sponsoring broker sign off on your license application if you live in a state where that is required. But be aware that if the broker-owner

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