We all want to make more money on our real estate transactions. We can do this with the 100% commission model.
The model has become increasingly popular in recent years, and for good reason.
What does it all mean? Paying 100% of the commission to the real estate agent in every transaction.
This may come as a surprise to agents who have previously worked with traditional brokers. If the broker isn’t taking any commissions, how do they make money?
Comparing 100% commission real estate brokers to traditional commission structures
Typically in the U.S.A 50% of the commission goes to the agent and 50% to the brokerage; how does this compare with the 100% commission Real Estate broker in FL model?
Let’s make a comparison.
Consider a sales commission of $10,000 on a deal.
With a traditional 50/50 split, the agent gets $5,000 while the brokerage gets $5,000.
However, with the 100% real estate broker model, the agent receives all commissions. So, the agent receives the entire $10,000.
As a result, the agent will make a greater profit after paying transaction fees ($200 for Florida, and $99 for Texas). Furthermore, there is no monthly or desk fee.
It can make a world of difference.
If you sell 10 houses in one year and make $10,000 per sale, you would have to pay your broker $25,000 in commission. How much is that? Let’s say you pay $200 per transaction, at the end of the year, you will only have to pay $2000. That’s an extra $23000 in your pocket.
Brokerage model based on 100% commission
Brokerages can structure 100% commission models in several ways. Many choose not to provide agents with office support services. So they can pay out 100% commission on sales, they are able to keep expenses low. Additionally, it allows them to charge very low fees for desk space to their agents.
Nevertheless, it does not permit them to provide their agents with training and support.
Some companies charge flat fees for every sale. Brokerage fees can range from very low to very high, depending on your broker.
Either way, the real estate agent pays money to the brokerage in order to be an associate. The agent’s commission is reduced as a result.
Are you interested in the 100% Commission Model?
The 100% commission model has grown in popularity with agents over the past several years. Do you think it’s right for you?
Do you have experience as a real estate agent? Do you have a clientele and a successful business all on your own? This structure may work for you. This no-frills model is perfect for anyone who does not require in-office training or a referral program for discounts.
For newer agents, a more traditional commission structure may make more sense.
There is a need for in-office training and interaction for many new agents. Interacting with other agents can help them gain experience at the outset of their careers.
There can also be valuable discounts on pricing through in-office referral programs. You may want to trade off a lower commission for developing your knowledge base if you’re a new agent.
Getting started, however, means you don’t have to pay your broker monthly or ‘per transaction’ fees. You may be able to boost your commissions by switching to a 100% commission structure at that point.
However, what if you got training and a great referral program with 100% commissions? What if you also got unlimited training and support?