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Updated over 9 years ago,
New California Agent, immediate 1031 exch and broker fees
I have a bit of a dilemma. (And please excuse the novel below ;))
I'm going to take my CA Salesperson exam in a few weeks and my partner of 6 yrs (romantic, not investment!) is doing a 1031 exchange about the same time I'm getting my license.
Here's the deal: she listed her place in SF and received a generous cash close with 2 week COE, which means she'll have 45 days to have an offer accepted on a place she's buying here in Los Angeles, beginning 10/23. The timing will be tight, but assuming it works out and I can be her Agent, I'd love to keep as much of the commission as possible to help with her closing costs, etc. since we all know the Agent's commission is built into the selling price.
I've interviewed about 5 brokerages and am extremely frustrated about the amount of commission each one wants to take. I understand I'm new and they want their cut, but 35% to a mentor, 21% to broker and an additional 6% off the top literally leaves me with 38% commission, and then considerably less after fees, dues, etc. I feel paying so much to my mentor and the broker is kind of ridiculous considering I'm literally bringing them business on day one and they won't have had to spend a considerable time mentoring me before closing my first deal. It's going to be contracts, etc. since I'll be the one searching properties and taking her to open houses, etc. The mentor's name will be on the offer, but mine will be the one if I'm licensed by COE (the listing agent has to agree to put me on).
Is there any way to avoid paying so much to get help with an exchange? I wouldn't have as big a problem with this if my mentor were to actually have spent time teaching me a bunch of stuff before my 1st transaction because at this point, I'll likely need help on a couple more going forward, which means I'll still be paying out of pocket. I probably look like a cash cow at this point because it's the equivalent of having $7k land in her lap on a $600K deal. It feels like I'm being sold snake oil.
Any advice?? Thanks in advance, folks!
Btw, my end goal is to make enough $$ as an Agent while learning about CA real estate contracts, etc. to eventually invest on my own for passive income (any state will do!).