Why Are Las Vegas Real Estate Agents Paying Franchise Fees?
I became a licensed Las Vegas Real Estate Agent in early 2001 and since I was only interested in being a part time agent, I didn’t interview any real estate companies. My friend suggested I hang my license with Century 21 Moneyworld and I took his suggestion even though they charged a franchise fee on each transaction. At the time I didn’t realize the importance of interviewing other real estate companies to see what they had to offer and to compare their fees. Knowing what I know now, I would have never chose to hang my license at a real estate brokerage that charged a franchise fee on each transaction. What I don’t understand is why other Las Vegas Real Estate Agents would hang their real estate license with a real estate brokerage that charges a franchise fee?
Some might think that since the franchise fee is so small it really is insignificant. But if you think about it, it really is significant. A few years ago, when Las Vegas median home prices were $315K, it was a little easier to absorb franchise fees out of your commission but in today’s real estate market with the median home price at $141K, it’s not. With the average real estate commission only $4,230 before the transaction fee and split with your broker is taken, you just can’t afford to have other fees like franchise fees taken out. Your fees are still the same but your income isn’t.
Obviously many Las Vegas Real Estate Agents are hanging their license with real estate brokerages that have high fees and charge franchise fees, so there must be a reason or something of value they are receiving. Maybe they are generating leads for their agents. Could it be the brand name of the real estate brokerage is helping the agents generate business. Whatever the reason, the agent should be receiving something of value in order to pay high desk fees, franchise fees or be on a broker split.
Every dollar you make from your real estate business is very important and to give away a few hundred dollars per closing just to be associated with a brand name company is not really worth it in my mind. Ever since I moved my license to North American Realty of Nevada, a real estate brokerage that doesn’t charge a franchise fee, I have never had a client tell me they wouldn’t work with me because I wasn’t associated with a brand name company.
So back to my original question, why are Las Vegas Real Estate Agents giving away a few hundred dollars in franchise fees on every transaction just to be associated with a brand name real estate brokerage?
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