If you ask a gaggle of real estate agents what the most important part of joining a new brokerage or team is, you’ll probably get a smattering of generic answers that dance around the truth. Because honestly, one of the most important stats that a brokerage can share with their agents is the commission split — and agents are always looking to see who has the best commission split in real estate.
It makes sense, of course. If you have a more favorable split, you get to take home more cash on each deal — meaning you can make more money just by doing the same amount of business. For almost any agent, this is going to be an obvious benefit, right?
With that said, there are plenty of reasons that a real estate agent might choose to work with a brokerage that offers “worse” splits than others. If you feel like the money that you are paying into the brokerage is being effectively used to help increase your business. There are some teams and brokerages that offer industry standard splits but also provide exceptional training, lead generation, and support for their agents. This type of real estate team might be more attractive to you than a brokerage that has “better” splits but far less support.
But what if you don’t want to pay any commission at all? It sounds like a fantasy, right? Well, the fact is that some innovative brokers are converting to a 100% commission model that allows agents to do away with commission splits entirely. Instead, agents pay a flat fee to cover administrative and support costs, then take home their commission instead of having to give a percentage cut of every deal to the brokerage.
There are many reasons to join a 100% commission real estate company. A lot of agents are curious about whether this ultra-favorable commission model is the right move for them and their business, so we want to break down the pros of each commission style and help you make the choice that is best for you.
The Pros of a Traditional Commission Split
The main upside to a traditional commission split is that you only have to split your money with the brokerage when you are actually making deals and selling homes. This can make the traditional model attractive for people who are only interested in doing a few deals per year. Because your administrative fees are taken out of your commission, you only end up paying some of your fees when you close on a home.
It’s important to keep in mind, however, that most brokerages charge some sort of fee beyond simply taking part of your commission — so you can’t expect to just break even at times when you aren’t selling homes.
Another potential pro of the traditional model is that you aren’t necessarily locked into a singular percentage. Many brokerages offer a 50/50 split on your commission, but skilled negotiators (and highly productive agents) may be able to keep a higher ratio of their commission by cutting a deal with their broker.
The Pros of a 100% Commission Brokerage
Because of the way the 100% commission brokerage is set up, your training and administrative fees are covered by a monthly or yearly subscription plan. That means that you get to keep the money you make on each deal — and the more deals you do, the more homes you make 100% commission on!
There’s another, hidden benefit to this model. Because you get to keep your commission, and don’t have to deal with the potential resentment of splitting it with your broker, this model encourages you to put the work in and sell more homes, at a higher price point! When it comes to propelling agents to success, income is a powerful and common motivator. This financial incentive to improve, combined with the training materials of your 100% commission brokerage, means that you have all the tools that you need to swiftly improve as an agent!
Verdict: Which real estate company has the best commission model for its agents?
In the current landscape of real estate, it’s easy to see the appeal of the 100% commission model. This business plan allows you to avoid the risk of exploitative splits and keep more for yourself. It also encourages you to sell more (or more expensive) homes, because you see a greater financial incentive to do so.
However, that doesn’t mean that you should just waltz up the first full-commission broker you find and hand up your license. You need to make sure that your broker is providing top-notch support and training — after all, that’s a big reason that you are paying them a monthly fee!
The best full-commission brokerages will partner with a real estate coaching service to help provide you with world-class training, wherever you are, at your convenience. At beREAL, we work with HyperFast Agent to bring you the materials, scripts, and strategies that have helped build some of the nation’s most successful real estate teams, all as part of your monthly fee.
If you want to know more about working with a 100% commission brokerage, or if you want to figure out whether working with beREAL could be the right move for you, then we want to speak with you! Our dedicated teammates are standing by to tell you more about our model and how it can benefit your business, so click here to schedule a time for a 100%, no-hassle discovery call!