Chapter 3 - Owning, Managing, & Supervising An Office Flashcards
What is the largest variable expense in running a real estate office?
Commissions
What are fixed expenses?
Those that do NOT change proportionately with increases and decreases in income.
Occupancy costs, salaries, payroll costs, equipment rental and maintenance, furniture rental, business liability insurance, and property insurance.
What are the two categories of advertising?
Specific: advertising a house
Institutional: advertising the firm (branding)
How does a Sales Associate qualify to be an independent contractor?
Associate Must hold current, valid, active license
Associate’s gross income must be based on production (commission) rather than on number of hours worked. AND
Sales Associate must work under a written contract that says he’s not an employee for federal tax purposes
What tax forms must be delivered to employees and independent contractors by January 31 of each year?
W-2’s to employees
1099-MISC to Independent contractors
What is the formula to calculate the monthly number of transactions required in the office to make a certain amount of money?
Company Dollar* / number of transactions = average Company Dollar per transaction
(Amount needed for expenses + profit) / avg Company Dollar = number of transactions needed per month
- Total amount left over after paying commissions
Who can pay a licensed personal assistant commissions?
Only the Broker
Who can pay a licensed personal assistant a salary?
The Broker, Broker associate, or Sales Associate for whom they work
What is a graduated commission program?
A sliding scale where associates are paid lower commissions until they reach certain levels of production. May restart at the beginning of the year.
