Everything you’ve ever wanted to know about referral fees.
How do real estate agents retire?
I recently had a conversation with the broker-owner of a local New Jersey Remax office. We talked about what his agents typically do when they retire. He told me that his best agents become referral agents.
This makes intuitive sense. You minimize your costs & earn commission for making introductions based on your years of experience in the real estate industry. The key is finding a referral group with generous splits and a reliable infrastructure at a reasonable cost.
A lighter workload and a residual cash flow stream seem like an ideal situation for most retirees. That said, there are other opportunities for a fruitful retirement that shouldn’t be ignored. Here are some ways real estate agents can leverage their profession to ensure a comfortable retirement:
Build a team that can operate without you. Owning a real estate office is no longer the only way to build up a brokerage-like structure. Many agents create teams of specialists to handle clients, while belonging to a larger real estate office that takes care of the administrative and back-office duties.
Real estate investments. This path requires forethought and preparation. Don’t expect to build up a real estate investment portfolio last minute. That said, over time you can expect a stable and healthy return on equity of around 10%.
Brokerage models with “retirement” plans. Keller Williams (profit share), Exp Realty (revenue share) and Exit Realty (revenue share) all offer their agents retirement benefits. Reviews on these plans have been mixed, so rely on them at your own peril.
There’s a lot more that has been written on this topic. Here are some additional resources on selling your book of real estate clients:
The most important thing any real estate agent can do to retire in a strong position is start planning early.
