Question for agency owners:

What would your net compensation be on a sale for a 250k home at a 3% gross commission? This is after you pay the agent and any franchise costs if any.

The reason I ask is that I am working on a new real estate office/network model with an integrated bonus & retirement plan. Broker net for what I have in mind on this sale: $1,787.50 (Agent gets 70% of gross)

How does that stack up against what you receive ?

I don't understand your question. . .

A 3% commission on a $250,000 home would be $7500.

At a 70% split, the agent would get $5250. The brokerage $2250.


In my case, my split with my agent will vary, depending on their productivity. My "need" for revenue is dependent on the costs of doing business. But, those vary tremendously.

Perhaps a bit of clarification??

Steve,

I am after the net figure to the broker after paying the agent and any franchise fees. This is not inclusive of office overhead... since that will vary from office to office.

So with your example would'nt there be a franchise fee off the top before the split... thereby reducing your broker net?

I know there are alot of different business models used by brokers here and am trying to determine how my pricing model fits within those. I'm playing around with using a bonus/retirement program that is hybrid of what Exit does and what Avalar does. Actual broker compensation on this example if they hired the agent directly would be $2,117.50.

$250000 X3% X92% [after 8% franchise fee] X30% = $2070.
That would be my [as a broker] net-net fee [in a franchise office that charges 6% franchise fee and 2% national advertising on net commissions].

Careful Steve. There are alot of offices, Exit included, that run on a very low profit margin. I guess what is just as important is what is your fixed expenses?