Understanding the 100% Commission Real Estate Broker Model
Everybody needs to get more cash-flow on their land exchanges. The 100% commission model makes it conceivable. The model has turned out to be increasingly well known as of late, and in light of current circumstances. So how can it work? By paying the realtor 100% of the commission on each transaction. For agents who have been working with traditional brokers, this may come as an amazement. All things considered, if the broker isn’t taking any commission, how are they making money?
The 100% Commission Real Estate Broker Model Vs. Traditional Commission Structures
Let’s do a comparison. Let’s say the sales commission on a deal is $10,000. Using the traditional 50/50 split model, the agent would get $5,000 while the brokerage gets $5,000. But with the 100% real estate broker model, the agent gets the entire commission. That’s the whole $10,000 commission for the deal. Which means higher profits for the agent, after paying the transaction fees of course ($200 for Florida, and starting at $99 for Texas). In addition, we don’t have any monthly or desk fees. And what a difference that can make. If you sell 10 houses in one year and you make $10,000 per sale you would have to pay $25,000 to your broker. That’s a lot of money. However, let’s say that you pay only $200 per transaction, at the end of the year you would pay only $2000. That means $23000 extra to your pocket.
In the event that you sell 10 houses in a single year and you make $10,000 per deal you would need to pay $25,000 to your intermediary. That is a great deal of cash. Nonetheless, suppose that you pay just $200 per exchange, toward the year’s end you would pay just $2000. That implies $23000 extra to your pocket.
How the 100% Commission Real Estate Broker Model Works
There are several ways a brokerage can structure the 100% commission model. Many opt not to provide office support services to their agents. This allows them to keep expenses down, so they can pay out 100% commission on sales. It also allows them to charge their agents very low monthly fees for the use of desk space. But what it doesn’t allow them to do is provide training and support services to their agents. Others tend toward charging a flat fee for each sale. These fees can range from very low to very high, depending on your broker. Either way, the real estate agent ends up paying out funds to the brokerage to be an associate. This decreases the amount of commission the agent takes home. Is the 100% Commission Model right for you?
In the course of recent years, the 100% commission model has turned out to be progressively mainstream with agents. However, is it directly for you?
Are you an experienced agent? Have you built a clientele and a successful business on your own? If so, this structure can be ideal. If you don’t need in-office training or a referral program for breaks on fees, this no-frills model is perfect. Yet for newer agents, a more traditional commission structure may make more sense. Many new agents do need that in-office training and interaction. Learning from other agents can help them build their career at the start. In-office referral programs can also provide valuable breaks on pricing. For newer agents, it may be worth taking a lower commission as a trade-off for growing your knowledge base. Once you get going, however, paying monthly or ‘per transaction’ fees to your broker is no longer of benefit. At that time, moving to a 100% commission structure can give you an exciting boost in commission. But what if you could get training and a great referral program with the 100% commission model? What if you could also get unlimited training and support?
Get 100% Commission at NB Elite Realty
When you sign up with NB Elite Realty, you pay low transaction fees while still receiving exceptional training and unparalleled support. What do your transaction fees get you? We offer incomparable training programs designed by the broker himself. We also provide open and collaborative office locations, as well as total support by our staff of experienced real estate experts.
- The preferred method of communication
- Preferred reports, feedback, or previewing of homes
- Necessary documents
- Services you provide
- Client’s obligations
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