New to real estate? Following is some helpful information for prospective and new licensees in the Tulsa, Oklahoma Area.
Is Real Estate a Good Career?
Real estate can be a great part-time job or a full-time career.
It’s unlike any other occupation because it requires many skill sets, allows you to interact with a wide variety of people, and can provide outstanding compensation.
As a sales associate, you run your own business, set your own schedule, and manage people, time, and money on a regular basis.
You can form a team or outsource work to family, friends, employees, or even virtual assistants.
You keep up with technology trends, help people figure out the right steps to take to achieve their goals, and get paid to put smiles on people’s faces.
Real estate is a great career!
Should I be a REALTOR®?
In order to help others with their real estate transactions and receive compensation for doing so, you’ll need to be licensed in the state where the property is. Examples include: writing contracts to purchase or rent real estate, listing property for sale or lease, and managing others’ rental properties (if you do not live on the premises).
REALTORS® engage in advertising, prospecting, targeted marketing, sales, service, advisement, and additional professional activities.
If real estate property, interiors, and exteriors interest you and you think you’ll enjoy helping buyers and sellers learn the transaction process, understand their specific situation in quantitative and qualitative terms, and do some paper pushing (hopefully paperless paper pushing), then you may want to consider a part-time or full-time career as a REALTOR®.
To be truly successful as a real estate sales associate, you’ll need to have (or quickly develop) connections to family, friends, and other people that may want to buy or sell property.
You’ll need to be comfortable marketing to your best friends, acquaintances, and strangers — consistently, since people don’t buy property as often as they buy food, concert tickets, or even vehicles. And, when the time comes for them to do a transaction with you, you’ll need to be professional in all dealings, perform a variety of research and financial tasks, and be able to put their interests before your own.
You’ll need a reliable computer, smart phone, and the ability to print and scan. All this may seem basic to some, but it shouldn’t be intimidating to motivated individuals.
If you think you can do it, we’ll cheer you on all the way to the closing table (and then to the bank)!
What is a REALTOR®?
Oklahoma’s licensing agency is the Oklahoma Real Estate Commission (OREC). OREC’s purpose is to protect the public, not serve the licensees.
The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® (NAR) and subscribes to its strict Code of Ethics (COE) and Standards of Practice.
End Zone Realty’s REALTORS® are licensed by OREC and members of the National Association of REALTORS® (NAR), Oklahoma Association of REALTORS® (OAR), and Greater Tulsa Association of REALTORS® (GTAR).
The local associations (GTAR in this case) are what are referred to as the MLSs (Multiple Listing Services). Technically, GTAR is the membership entity and the Northeast Oklahoma Real Estate Services (NORES) organization is the “Tulsa MLS.” All GTAR members have access to the NORES MLS.
The purpose of an MLS is to offer cooperation and compensation among brokers. No listing can be on the MLS if it is unwilling to cooperate with other brokers or pay a compensation amount, although there are no rules on how much compensation is required because that would be a violation of the federal anti-trust and price fixing regulations.
By paying the required dues (and thereby committing to the Code of Ethics and Standards of Practice), a real estate licensee is a REALTOR®.
The local real estate association has a board, can fine and reprimand members for misdeeds, and can revoke membership in extreme cases. However, its rules are in addition to the state laws, which are investigated by OREC.
OREC receives complaints and tips from both the public and other licensees and investigates each case as needed. OREC has the power to revoke one’s license, in which case, that individual would no longer be a REALTOR®.
NAR was founded on May 13, 1908, in Chicago and is the nation’s largest trade association.
Started in 1969, the REALTOR® Political Action Committee (RPAC) is the number one trade association political action committee in the nation.
With over 1 million REALTORS® in the United States, REALTORS® come from all backgrounds, political affiliations, income levels, educations, and generations. Each individual has their own motivations, broker-specific policies and practices, and influences.
There is great diversity among real estate professionals.
How do I get my Oklahoma Real Estate License?
In case you were wondering, you can have a real estate license without being a REALTOR®. REALTOR® membership is above and beyond a real estate license.
In order to get your real estate license in Oklahoma, you’ll need to accomplish several things:
- Pass a background check
- Complete an OREC-approved pre-license course (e.g. Charles Barnes online, Real Estate Express online, or Tulsa Tech)
- Submit your course completion certificate and schedule your state examination
- Pass OREC’s real estate license examination
- Choose your sponsoring real estate broker (e.g. End Zone Realty)
- Complete an OREC-approved post-license course within your first year
For more details, please read OREC’s Education and Examination Information to Obtain a License.
How Much does it Cost to be a REALTOR®?
As soon as your sponsoring broker (e.g. End Zone Realty) receives your real estate license in the mail, you will be given a copy of your license, your OREC “pocket card” (to be kept with you at all times), and will then be eligible to be a REALTOR®.
Here’s a breakdown of the required fees:
- Pre-license course and practice tests: about $450
- OREC License testing fee: $60
- OREC Background check: $41
- OREC Provisional Sales Associate (PSA) license: $75
- GTAR Annual Dues: $464 (prorated unless you join in January)
- Local: $175
- State: $134
- National: $120
- NAR Assessment: $35
- GTAR Application Fee: $125
- OAR Application Fee: $50
- MLS Display Key (black box key): $130
- $100 refundable deposit
- $30 non-refundable processing fee
- — or —
- MLS Electronic Key (smart phone-connected key): $64 non-refundable (recommended)
- = $1,329 startup costs (minus partial proration if joining GTAR mid-year)
You may want to view GTAR’s New Member Forms Packet PDF.
- GTAR annual dues (due in November): $464
- MLS User and Key Fee: $134.25/quarter if you have the black box key or $165.25/quarter if you have the smart phone key fob (recommended)
- = $1,125 per year
- Continuing education classes as required
- Monthly broker fee
- Broker transaction fee
- Potentially other broker fees
Most often, your Errors & Omissions (E&O) insurance coverage is provided by your monthly and/or per-transaction brokerage fees. End Zone Realty recommends all agents have an umbrella insurance policy in case of an exception or loophole in their broker’s E&O or general liability policy.
How do I get Paid as a REALTOR®?
Brokers receive commissions from closed real estate transactions. By law, commissions are never paid directly to licensees.
When a licensee helps someone buy or sell a property and earns a commission, the commission payment gets paid to the broker. Then, the broker pays the associate based on their commission agreement.
For example, when you sell a $100,000 house and the compensation amount is 3%, the broker receives $3,000 at the closing table from the title/closing company. According to the commission agreement you have with your broker, you might receive $1,500 (50%), $1,800 (60%), $2,100 (70%), or $2,400 (80%), as examples.
To help understand the timeframe in which you might earn a commission, here’s an example buyer-side transaction:
- You have a buyer client who is ready to buy and you get them pre-approved with a mortgage lender (1-2 days for pre-approval letter)
- Visit several (e.g. 7) homes with client (1-2 weeks)
- Visit favorite home a second time (1-2 days)
- Submit offer on the favorite (1-2 days)
- Receive seller’s counter-offer and present to buyer (1-5 days)
- Submit buyer’s counter-offer to listing side (1-2 days)
- Receive signed contract from listing side once offer is accepted (1-3 days)
- Have buyer schedule inspections, finalize financing, get home insurance quote, etc. (2-15 days)
- Submit list of items to be fixed to listings side and wait for the estimate amount (1-5 days)
- Have buyer and seller agree on items to be fixed (1-2 days)
- Schedule time for buyer to re-inspect after items are fixed (1-5 days)
- Confirm with lender that financing is okay to close, appraisal amount is sufficient, etc. (1-3 days)
- Confirm with title company that title is clear and is okay to close (1-5 days)
- On the day of closing, do a pre-closing walk-through with buyer, meet buyer at closing, wait for closing to complete, hand keys to buyer, take closing documents and commission check to broker (1 day)
- Broker reviews and verifies the file is complete and pays you (0-3 days)
Allowing some days in between each of those estimated days above, the time period from contract to closing (i.e. pay day) is usually 30-60 days. Cash purchases can close as quickly as 10 days. Short sales typically take 6-12+ months.
Yes, you only get paid after a closing, if the closing happens. That’s why clear communication with all parties and meeting all deadlines is very important.
The listing side has a similar timeline, except that you pay for marketing expenses up front and the 1-2 month timeline starts after you have a signed contract. Of course, there can be quicker closings and closings that are significantly delayed due to title issues or inspection findings. And sometimes deals just don’t close.
Back to our commission example a few paragraphs above, let’s say you are at a 60% split and receive $1,800 of the $3,000. Your Gross Commission Income (GCI) — an industry term — is $3,000. As an independent contractor (i.e. business owner), you would receive the $1,800 as taxable “gross income”. At tax time, you would determine all your deductible expenses to figure out your “net income”. For example, if you spent $300 on marketing, $70 on technology, and $220 on communications, you’d have $590 in total expenses. In our simple example, you would have $1,800 gross income, $590 deductible expenses, and a net income of $1,210, on which you would pay self-employment tax (depending on your business setup).
Get more closings, manage your expenses, and get some tax advice to get a higher net income for yourself! It’s that simple.
FYI: Sometimes sellers offer extra bonuses to buyer-side agents to set their listings apart — for example, a $1,000 bonus — and many brokers payout 100% to the associate instead of at their normal split. So your $1,800 example could be $2,800 even at a 60% split.
Why Should I Choose End Zone Realty as a New REALTOR®?
At End Zone Realty, new associates start at a 60% split (yes, with 100% payout on bonuses), but your first deal is at 90%. We do this as a way to help you get started in this great business and as a financial “pat on the back.”
It is common in the industry for newer associates and lower-producing associates (in terms of dollars, not number of deals) to have lower commission splits. Newer agents require more training and oversight, and higher producing associates are rewarded with higher percentages. This acts as a mutually-beneficial incentive for all associates to produce more income.
End Zone Realty is more than just another brokerage where you can get a fair commission split. End Zone Realty (EZR) was created to serve agents and to help agents better serve their customers. EZR was designed to foster teamwork, which is uncommon in this industry. EZR is an ethical, principles-based brokerage for real estate professionals.
In addition to competitive compensation plans, EZR includes extra benefits compared to other brokerages:
- Accessible, knowledgeable, honest, trustworthy, tech-savvy broker/owner: Cliff Paulick
- Cloud-based, paperless brokerage (work from anywhere, from any device)
- CRM (Customer Relationship Manager) provided
- Email address provided
- High-quality, wide-angle photos and high-definition walk-through video for your listings
- Nearly unlimited tech support
- 1,000 high-quality, double-sided business cards each year
- No referral fees from broker leads
- Earn additional income by referring other new or experienced associates
To compare, no other broker provides our full package of benefits, and here is a comparison list from a typical broker:
- Legacy technology and systems; not tech-savvy
- Paper and office based; not mobile-friendly
- No CRM provided
- Email usually is provided, but it may not be enterprise-grade
- Brokers usually don’t do photos for you. If they do, they’re not free. And no other broker does real video, especially not for you.
- Your devices are often considered your issue, and how valuable is their tech support anyway
- Some brokers provide “starter” business cards (that aren’t worth the thin paper they’re printed on)
- Typically, a lead from the brokerage (e.g. “floor duty” or “opportunity time”) doesn’t require a referral fee, but internet leads or other leads from your broker can come with a 10%, 15%, or even 20+% referral fee
- Some brokers offer recruiting bonuses, some don’t.
Bottom line, End Zone Realty is the best value real estate brokerage in the Tulsa Metro Area because we’re committed to innovation, efficient use of resources, and professionalism.
End Zone Realty’s monthly fee is $50. Others’ range from $60 to $90+.
End Zone Realty is a locally owned and operated brokerage, not a franchise. When comparing expected compensation, don’t forget to consider that pesky Franchise Fee (a.k.a. Royalty Fee).
A Franchise Fee is worse than the broker’s split because it gets taken off the top, and then your commission split is based on the amount left over. Unless things have changed since this was last updated, Coldwell Banker’s Franchise Fee is 7%, for example.
Example 1: $3,000 commission – 7% Franchise Fee = $2,790. Your 60% split is now $2,790 * 60% = $1,674, a loss of $126. Of course, that fee grows as your commissions grow.
Example 2: $10,000 commission at an 80% split would be $8,000 income to you. Instead, it’s reduced to $7,440 if there’s a 7% Franchise Fee — a difference of $560.
You can give yourself a raise simply by signing up with End Zone Realty instead of with a brokerage with a Franchise Fee. They’ll tell you it’s to have access to all their tools and training and their brand name, but studies have consistently shown that clients choose the individual agents and often don’t even recognize the brokerage their affiliated with. It’s a hard thing to believe for those of us in the industry who are so focused on branding, but it’s been proven over and over.
Plus, EZR provides more value via technology tools, hands-on training, and broker support than what you’ll receive from cookie-cutter training plans.
How do I Obtain a Higher Commission Split?
Even though EZR offers very competitive commission splits, the commission split percentage isn’t everything. The overall compensation and benefits need to be included in the evaluation.
There are some brokerages around the country that offer absolutely no support services, technology tools, or training and payout effectively 95% – 100%. However, these “agents are on their own” setups haven’t been very popular. Some have described this with the phrase: “100% of zero is still zero,” which speaks to their lack of training, support, and tools to help agents produce business. So that’s one extreme. Just know that it’s out there. It’s also a testament to the real value of good broker support.
Some brokerage models offer multi-level recruiting compensation (Keller Williams is known for this). For those that want to be recruiters, people definitely have made money over the years with the KW profit sharing program. However, it significantly rewards those at the top of the referral pyramid and isn’t a boon for everyone. KW also has a commission cap, but the majority of part-time and full-time agents do not ever “cap” so keep that in mind (even if the way they describe it doesn’t sound difficult to obtain). Plus, the cap gets reset every 12 months (on your anniversary). Bottom line, if you’re not a multi-multi-million dollar producer, you won’t cap. If everyone did cap, they wouldn’t have money to run their offices. It just makes sense that most won’t cap.
EZR’s philosophy is to provide all the tools and support that all agents will actually use and benefit from and to allow each agent to pursue their real estate objectives in their own ways. This is coaching, not just training. With a name like End Zone Realty, don’t you think we’d like the idea of coaching? Each associate has their own sphere of influence, skills and abilities, and short-term and long-term business goals to pursue.
Since you’re wondering, here’s the full compensation and fee structure for your viewing pleasure:
- $50 per month
- 60% to new agents and agents with less than $12,000 company dollar in their past year
- 70% to agents under $21,000 company dollar
- 80% max commission split
- 90% split on your first transaction at End Zone Realty
- 100% payout on seller-paid bonuses and warranty service fees
- $100 transaction fee per side (i.e. $200 if you get both sides of the transaction)
Alternatively, if/when you become a really big producer, you may want to choose End Zone Realty’s version of the RE/MAX commission model and pay $1,000 per month and get a 90% commission split. This option only makes sense if you’re generating $9,500 in GCI (e.g. $316,667 * 3%). Most won’t choose this option, but it’s nice to have it available nonetheless.
In case you didn’t figure it out yet, Company Dollar is the amount the broker keeps from each split:
- To go from 60% to 70% ($12,000 company dollar), you’ll need to sell $1 million volume ($1 mil * 3% * 40%).
- To go from 70% to 80% ($21,000 company dollar), you’ll need to sell $2 million volume.
- If you’re following along with your calculator, you might have thought it was going to be $2.33 million volume * 3% * 30% = $21,000. But it’s only $2 million because you already earned the first $12,000 company dollar while you were at 60%.
- Therefore, it only takes the additional $1 million volume at 30% to get to the 80% split.
At End Zone Realty, your commission rate does not reset each year. Once you’ve obtained a higher split, you keep it in most cases (at broker’s discretion).
Does $1 or $2 million volume sound like a lot? The average sales price in the Tulsa, OK area is around $150,000:
- $1 million volume divided by $150,000 is only 6.7 houses per year.
- $2 million volume is only 13.3 houses per year.
- If you get both sides of a transaction (seller and buyer sides), it counts double (and you get paid double).
- If your personal average sales amount is $250,000, that’s only 8 transaction sides per year for $2 million volume.
If you compare EZR’s simple, straight-forward, no-reset commission structure, fees, and benefits, you’ll realize how competitive we really are. We are fond of the saying, “Make your broker earn their split!”
What if I Want to Sell My Own Property or Buy Property for Myself?
When you sell Oklahoma real estate that you own or have an ownership interest in, you need to disclose that you are a real estate licensee. Other than that, it’s up to your broker’s policy.
Of course, you’ll want to put your home up for sale in the MLS. There are a variety of ways your own broker may charge you for listing your own property for sale, but EZR’s is probably the lowest price and the best value.
If you’re representing yourself (i.e. not asking another licensee to be your REALTOR® in this transaction), you can take advantage of EZR’s limited service listing option and sell your own home for an up-front fee of $500. You get the photos and video, get listed in the MLS, and pay the buyer’s broker, if applicable.
When buying property for yourself or your entity, it’s just like helping someone else buy property: you write the contract, go through all the steps to closing, and the commission gets paid to your broker (and you get your split).
You’re not allowed to receive a lower commission in exchange for a lower purchase price because the IRS considers that tax evasion.
How do I Select the Best Broker for Me?
Ultimately, you need to choose your broker in line with your personal values and professional goals.
To help you get started in making your decision, here are some sample questions to get you thinking:
- Do I want to be in an office everyday, or do I want to work from home or the coffee shop?
- Is the compensation structure simple enough for me to figure out when I will achieve the next level?
- Do I want a brokerage that embraces or puts up with technology?
- How much will I be spending in addition to my broker’s provided tools and marketing to run my business as desired?
- Can I see myself at this brokerage long-term?
- Will I be happy?
- What is important to me, and how does my brokerage decision play into that?
Our friends at BreakthroughBroker.com have a free New Agent Guidebook that might prove helpful in making your final decision and getting started.
Of course, we hope you’ll think all this information and our value proposition is compelling and feeling like the right fit for you already!
End Zone Realty’s clients are its sales associates. To us, it’s all about you.
Your clients are the public. To you, it’s all about them.
If you’re thinking End Zone Realty might be a good fit, we’d love to hear from you. If not, feel free to share your thoughts and concerns with us and maybe we can help each other improve. (Yeah, we like to do that.)
Disclaimer: transaction amounts, commissions, and other examples are for illustration purposes only and should not be interpreted as recommendations, guarantees, or considered for any other purpose whatsoever.