Once you have passed the licensing exam, you have one year to determine how you want to utilize a real estate license. You have numerous options. The most common positions new licensees choose are:

A. Full-Time Real Estate Sales
B. Part-time Real Estate Sales
C. Property Management
D. Builder's Model Home Representative
E. Personal Assistant to Another Salesperson or Broker
F. Investment for Personal Accounts
G. Referral Agent

In Indiana, a real estate salesperson is required to act "under the auspices of a broker." Regardless of which of the above options you choose, you must associate with an Indiana licensed broker who will be responsible for you. If you haven't already found a broker with whom you wish to work, you should contact several brokers and meet with them to see what they can offer you to help your career.

It is a good idea to meet with at least two, and up to five, brokers before you decide what is best for you. You need to understand that the brokers will be interviewing you to determine if they think you "have the right stuff" to make it in the real estate industry. But you are also interviewing the brokers to see if they "have the right stuff" to help you have a successful career. As with any interview, you should prepare. While the following is not a complete list, here are some things to consider before, during, and after an interview:

1. What is the broker's reputation in the community?
2. What training will the broker provide to you?
3. Will the broker provide you with leads for new business?
4. Does the broker hire full-time agents, part-time agents, or both?

1. Are you paid by a "commission split?"
2. What is the split... 50/50? 60/40? 70/30? 100%? Other?
3. What are the brokers' respective "desk fees" and other costs?
4. What will it actually cost you to work for each broker?

1. Being five or ten minutes early is even better than arriving exactly on time.
2. Dress professionally.
3. Type a list of questions and leave space to write the brokers' answers.
4. Anticipate the questions a broker might ask you. Have answers ready rather than trying to give off-the-cuff responses.

1. Thank the broker as you leave the meeting.
2. Send a hand-written thank you note immediately.
3. If you are not offered a position during the interview, ask when you will hear from the broker.
4. If you have other interviews, tell the broker when you will let them know what broker you have decided to join.

In Indiana, a real estate salesperson is required to act "under the auspices of a broker." Regardless of which of the above options you choose, you must associate with an Indiana licensed broker who will be responsible for you. If you haven't already found a broker with whom you wish to work, you should contact several brokers and meet with them to see what they can offer you to help your career.

One of the aspects of a real estate career that is appealing is your ability to earn an excellent income. Unlike many salaried positions, you earn based upon your efforts and successes. In a salaried position, you can work harder than your co-workers and accomplish more goals, but your income will be a constant. You are not rewarded for being more successful than your "peers." As an independent contractor in a real estate sales position, typically you are paid each time you help a client close a transaction. The more clients you help, the more income you make. You truly are paid based upon your efforts and successes.

Different real estate brokers have different payment structures for their sales associates. It is vital that you learn about the payment structures of each of the brokers you consider. While not all real estate professionals are paid on a commission basis, most are. Brokers are likely to discuss "commission splits" with you. You will probably hear about 50/50 splits, 60/40 splits, 70/30 splits and 100% programs. In each case, the first number is the percent of the broker's commission that the salesperson will receive. For example, assume that a salesperson represents a buyer in a transaction. A seller has offered a home at $105,000, and the listing broker has offered to pay the buyer's broker a commission of 3.5% of the sales price. If the final sales price is $100,000, here is how the salesperson would be paid:

50/50 Plan $100,000 x3.5% $3,500 x50% $1,750

60/40 Plan $100,000 x3.5% $3,500 x50% $2,100

70/30 Plan $100,000 x3.5% $3,500 x70% $2,450

100% Plan $100,000 x3.5% $3,500 x100% $3,500

If you consider the income in the 50/50 plan, you see that the salesperson will be paid $1,750 by the broker, and the broker will keep $1,750. The same process will be applied until the salesperson closes a pre-determined minimum volume of sales or generates a minimum amount of income for the broker. If the salesperson were to have 10 identical transactions, the broker and the salesperson would each earn $17,500. On the 60/40 Plan, the salesperson would be paid $21,000, and the broker would retain $14,000. On the 70/30 plan, the amounts would be $24,500 and $10,500. And the "100% Agent" would be paid $35,000 without sharing any commissions with the broker. On first blush, there doesn't seem to be any question which plan is best for the salesperson. But there is another consideration.

Let's first recognize that the salesperson is starting a business. With most businesses, there are start-up costs, overhead expenses, operating fees, inventory costs and numerous other financial requirements. In real estate, you must also comply with licensing laws that require you to work "under the auspices of a broker." A salesperson will actually pay the broker for the opportunity to work with the broker. The salesperson benefits from having access to the broker's facilities, marketing materials, training, experience, phone systems, copiers, fax machines, computers, staff, and numerous other amenities. The broker benefits by receiving income from the salesperson. In the first three plans above, the salesperson remains on the "split" until the broker receives a pre-determined minimum amount of income. You will hear the terms "base rent" or "desk fees" used to describe the minimum income amount. In most commission split plans, the salesperson continues to split commissions until the broker's split reaches the "base rent" amount. The salesperson then typically receives bonuses or is paid a higher "split" for transactions that close for the balance of the year.

Let's again consider the 50/50 Plan above, and let's assume that base rent is $17,500. After the salesperson has closed enough transactions so that the broker has been paid $17,500, the salesperson's "split" is likely to change. One scenario is that the split will change to 90/10 for the remainder of the year. Now, when the salesperson closes the 11th transaction in our scenario, the salesperson would receive $3,150 rather than $1,750. The broker would only receive $350. The biggest benefit to the salesperson on a "split" plan is that the broker doesn't collect monies toward base rent unless the salesperson closes a transaction. While the 100% Plan looks inviting, here is the catch. Let's again assume that base rent is $17,500. If you divide that number by 12, the result is $1,458.33. The "100% Agent" would be required to pay $1,458.33 to the broker every month, even if there had been no closings.

For most salespeople who are just beginning a real estate career, one of the "split" plans is often more attractive than having to pay an amount toward base rent each month. Again, it is important that you discuss each broker's payment structure and that you understand how you will be paid and what expenses you will owe.

In a word, YES. Here is a list of SOME of the expenses/fees that a salesperson must pay in addition to base rent:

L. Pre-licensing School
M. State Examination
N. State Licensing
O. Board of REALTORS® dues and technology fees
P. Continuing Education
Q. Advertising
R. Personal Promotion
S. Computer Expenses
T. Errors and Omissions Insurance
U. Automobile (Fuel, Maintenance, and Insurance)
V. Health and Disability Insurance
W. Cellular Phone
X. Voicemail and Email
Y. Taxes
Z. Professional Advice (Accountant, Lawyer, Coach, Financial Planner)
AA. Postage
BB. Franchise Fees
CC. Transaction Fees
DD. Company Fees

You need to understand that some of the listed expenses are the same regardless of the broker you choose (State Exam fees, Licensing Fees, Board of REALTORS® dues). Other fees vary widely, and not all brokers charge all of the fees. It is vital that you discuss expense issues thoroughly with each broker before deciding where to work.

EE. Model Home Representative for a Builder
As is the case with brokers, builders have varying programs for their representatives. Some builder representatives are paid straight salaries. Others have salaries plus bonuses. Others receive draws and commissions. There are even some who are on commission splits similar to traditional sales representatives.

There are some significant benefits to being a builder's representative. Expenses are often less than those of a traditional salesperson's. There are no out-of-pocket expenses for advertising, personal promotion, postage, franchise fees, company fees, or transaction fees. Some builder representatives are employees rather than independent contractors and receive benefits.

Another benefit is that builder representatives typically have set hours. They are required to work when the model home is open and must perform some other duties throughout the week. Traditional salespersons are "on call" nearly all day every day. Builder representatives do not have to spend money to generate business leads. Part of their daily time spent in the model home is dedicated to making client calls, performing market comparisons, preparing advertising flyers, and planning promotions. These duties are similar to those performed by traditional salespersons; however, the builder is responsible for the expenses.

There are drawbacks to being a builder's representative, too. While many like the fact that there is a defined work schedule, the schedule is much less flexible than that of a traditional sales representative. Many model homes are open seven days a week, and nearly all are open every weekend. Builder's representatives have schedules that can become tedious.

Builder's representatives often are required to be in one model home location all the time. Their work is often passive. They must wait for a potential buyer to come to the model home. There is often lots of "down time," especially when neighborhoods are newly opened and when they are nearly completed.

FF. Property Manager
As a property manager, a licensee represents the interests of the owner of a property. Typical property management positions include overseeing the operation of apartments, commercial buildings, strip shopping centers, or shopping malls. In each case, the property manager has a similar set of duties. Some of the duties that the property manager must perform are:

Like builder representatives, property managers are often employees and are paid salaries. They do not incur personal marketing expenses, and they rarely pay Board of REALTOR® fees. Hours are often more manageable; however, income potential is sometimes curtailed in comparison to traditional sales representatives.

GG. Referral Agent
A large percentage of real estate licensees in Indiana act as referral agents. As a referral agent, the licensee is not allowed to represent clients in the traditional manner. A referral agent merely refers clients to the broker with whom the referral agent is affiliated. The broker then represents the client or assigns the client to another licensee affiliated with the broker. If the client completes a transaction with the assistance of the broker, the referral agent is paid a referral fee. While the amount of such fees is always negotiable, it is not uncommon for the referral fee to be 20% or 25% of the broker's income. If we consider the sample sale from above, there is a total broker commission of $3,500. If the referral agent receives a 25% referral fee, and the broker represented the client directly, the broker would pay the referral agent $875. The referral agent incurs no expenses other than licensing fees and an annual fee charge by his broker. The referral agent is not required to perform services for the client. While it is a simplified analysis, the referral agent in this example would receive $875 for making a telephone call to his broker. The option of being a referral agent is especially attractive to persons who have full time jobs outside of the real estate profession.

HH. Personal Assistant to a Real Estate Salesperson
As a personal assistant, you help a real estate licensee perform their duties. You would assist in all of the aspects of real estate detailed in the paragraphs above. The benefit is that you do not have the expenses that the salesperson has. You are typically assigned job responsibilities and perform them under the direction of the salesperson. You income structure will vary from agent to agent. An assistant can work full-time or part-time and can be paid hourly, by salary, by commission, or by a combination of all options.

As you can see from the information above, there are numerous opportunities in the real estate industry. You can begin a professional career on your own under the direction of a broker. You can work full-time, part-time, or as a referral agent. You can work for a builder, a property manager, or another real estate agent. You can be completely independent and set your own goals, your own hours, and your priorities, or you can receive assignments and direction from other real estate professionals. No matter what you ultimately decide, make sure you research your options thoroughly.