Posted by Anonymous on 10/16/05 8:48am
Msg #70800

Being a Maryland SA isn't cheap

My spouse and I finished up the preliminary analysis of my business yesterday; my operating expenses (annual costs for licensing, continuing education, insurance, fuel and vehicle maintenance, cell phone, computer and printer, consumables, utilities, etc. broken down to a monthly level) total $1,100 per month. I have to make more than that just to payback our personal accounts for the initial startup costs, and even more to actually make a profit.

According to the spreadsheet we put together, I'd have to complete 25 signings at $50 just to break even with my monthly expenses. When the fees are boosted up to $80, my monthly expenses are met at 14 signings and at a fee of $125, just 9 signings are required to meet expenses. We expect the monthly expense figure to gradually decrease over time, as my operating costs and insurance rates come down.

So for those of you out there considering a jump into the arena, keep your operating expenses in mind and consider the consequences of accepting the cheaper fees; namely you work much harder for what you get in return.

Reply by BLE/MD on 10/16/05 9:24am
Msg #70803

When I first began, I didn't think about the number of signings I needed to break even. Now that I'm established, it makes me remember how expensive it was to get started in Maryland. My first month in business, I closed 6 loans @ an average of $100 each. The number of loans increased considerably each month as well as the average fee. I no longer look at a "per loan" analysis, but now look at a gross vs. net at the end of each month. And, if you give it time, you'll do more than 25 signings a month. I do a lot more than that.

Reply by BLE/MD on 10/16/05 9:26am
Msg #70804

What part of MD are you in/covering?...n/m

Reply by Art_MD on 10/17/05 8:10am
Msg #70886

I can't get a good grasp on your $1,100/month.

$200/mo - licensing, bond, insurance

Cell phone, car, car maintenance, fuel, internet access - you would have these costs even if you didn't do a signing. Being a signing agent allows you to write off a portion of these costs.
Ofice supplies - 0 cost unless you do a closing.
computer - 0 cost. You'd have it anyway.
printer 0 cost. you'd have it anyway. If you bought a higher quality/speed because of loan signings , amortize it over a year, lets say $40/month
Utilities 0 cost. you don't have extra because you're a SA

So, your fixed costs are $240/month.

Fuel and wear and tear on the car, and office supplies, are variable cost which only occur if you are making money doing signings.

My cost/month = fixed costs + 30% of gross income.

for tax purposes, you might include use of office space, your upgrade of minutes on cell phone, high speed internet, and include a portion of these in your fixed costs. - JMHO not legal advice

Art

Reply by Anonymous on 10/17/05 8:18am
Msg #70888

I refused to accept $50 closings, that's just not enough in the State of MD.