I am curious how other brokers decided which commission plan to use for their agents? What factors did you take into account? How did you accurately project revenues between different compensation plans to determine which plan you felt you should go with? Would love to hear everyone's thoughts on this and/or what type of commission plan you ultimately went with and why you feel that was the best decision OR whether you now wish you had gone a different route.

And How about BPO's? Legally, does the Broker get the check from the BPO company, and then cut it back to the Agent? Or, since it's not what we consider a commission check, can the Agent just have the check deposited straight into their own account? Hmmm. I have been searching everywhere on here for that one.

the brokers that i know with lower commission splits seem to have a door that revolves a bit more. the upside is that they make more per deal. the downside is that each agent is only worth a few transactions.

if you go with higher splits, you wont be competing with other brokers for retention for producing agents as they wont want to leave because the split is good. also with a properly run high commission shop, with producing agents, you will have agents who probably or should know how to solve many of the problems that are run across on a day to day business as they have seen the problems before.

keep us posted on your thoughts and the decision you come up with along with the reasons why you came up with the decision

Water are you thinking of adding more agents???

I know you just have a few right now. I have had a few agents want to join my company but I am just too busy doing my own thing to mess with it right now. Rather than babysitting for 300.00 a transaction I can make much more procuring my own deals and investments.

I guess it really comes down to if you enjoy that part of it or not. I would personally say with the knowledge you have in commercial you can command a better split where you keep more. Agents want to learn the commercial side but it's a specialized field where they should pay for the knowledge.

Super, got some plans in the mix to diversify and expand. Will most likely announce it in the next few weeks. I agree 100% with what you said re: value of commercial education shown in the commission split.

However, I am very interested in commssion plans other brokers have used for residential as a point of comparison.

My split with my one broker associate is 90/10. He buys his own signs, MLS fees, Realtor Fees. As I run a home office I don't charge desk fees. Also if anyone calls on his listing signs I answer any simple questions such as price, but then turn those calls/leads over to him. I've even asked him if he thinks the split is fair and he does. I wouldn't bother with another agent either, but I need someone to take care of my business if I go on vacation. Plus a little extra if he sells something is nice. He also can buy and sell his own stuff with no split and there is no split on bpo money.

Personally, I like high splits... I've never hired agents before, but if I did, that's probably the way I would do it.

Thanks for the feedback all- keep it coming.

what are you looking at doing? what are your goals? i am very quorious.

easy equation, factor in all your costs/expenses, factor in how much you want to pay yourself, factor in your marketing budget, factor in your liabiliy/legal bills then take that number and turn it into your monthly expenses. You know how to bring in more than that to be profitable. So, now you just have to find agents who will close deals and bring in that much money

nobody else wants to share their split? We had an established plan before I joined the office, so I don't know what exact criteria went in to it. We start out at 50/50 on coop and 60/40 inhouse and build on that with a (yearly) bonus program that maxes out at 90/10. Looking for insight here...

Just a thought that your last post elicited: I've done many co-brokes with a large Agency where their commission structure causes the Agent involved to make more by co-broking with me as an outsider than he would make working with another Agent right across the hall inside his own Office. As the beneficiary, I certainly don't mind; but it sure doesn't help their esprit de'corps. I'm just a trusted outside ear that listens to the gossip (gossip with a basis in fact) of their disgruntled staff.

I agree with VM Group...after you add up all your expenses you pretty much need to decide what you need to earn total and how many agents would do it...

I work for a company that only does 50/50 splits on most deals though in-house is a 2/3 split...they've got 12,000+ agents, too. Everything is free with them. Agents don't have to pay for mail, no signs, e&o...

There is no "right" answer...But i would probably suggest starting at lower splits first...you can always decide to give them a higher split later down the road Maybe even making it performance based like many brokers do - start at 50 - after x dollars in sales go onto 55% etc. etc.

for some reason the color buttons are not working right now, so i will use >>>>>>><<<<<<<<to highlight what i am speaking about.


I agree with VM Group...after you add up all your expenses you pretty much need to decide what you need to earn total and how many agents would do it...

I work for a >>>>>>>company that only does 50/50 splits<<<<<<< on most deals though in-house is a 2/3 split...they've got 12,000+ agents, too. >>>>>>>>Everything is free with them. Agents don't have to pay for mail, no signs, e&o...<<<<<<<<<

There is no "right" answer...But i would probably suggest starting at lower splits first...you can always decide to give them a higher split later down the road Maybe even making it performance based like many brokers do - start at 50 - after x dollars in sales go onto 55% etc. etc.


nothing is free...

if you make 60k this year in gci you will have paid $30,000.00 big ones for mail, e & o, lockboxes, etc... while it may "feel free" the cost is very high for the agents the more they produce.

That is going to depend on your state's laws. In OH, BPOs are not considered "real estate activity" and it's up to the broker whether or not they want the checks to go to them or the agent.

As far as BPOs go, in Missouri, ALL money received for real estate activities has to go to the broker, then be pauid to the agents. BPOs require a license, so they ARE a real estate activity. I will keep $5 of every BPO my agents do for administartive costs...
Most brokers here sytart everybody at 50/50 and most I have talked to give a raise after $1million in sales. I am looking at starting brand new agents at 60/40 with raises more often. Still ironing out the details, but think it will help agents feel like they are worth more to me and the compnay if they make more money more regularly. Retention of good agents is more important than big profits to me. I will cap them out at 90/10.
They will have to pay their own Realtor fees, CE, licensing fees, and any specialized advertising or signage (eg:name riders),an a small monthly fee towards E&O ($10-&20 per agent), but no desk fees, tech fees, phone bills, etc. I think, once I get an agent or two on the plan, they will talk and I will get several working for me.
I hope so, anyway!

I only have two agents; part of my team. They each make 50/50; but I supply all leads. No phone time, no fees for: MLS, E&O, Signs, or desks. I refer out on an average 8 buyers a day to each agent and some days more. If they get their own business its a 60/40 split to them. I'm a heavy hitting REO Listing Broker and am not looking for any other REO listing agent, would take on a good retail listing agent preferrably a Broker to head up retail.

Spam... Guy is likely getting compensated for signing people up. Spamed all over board. "id=wallmann"

How do you find out about california? Don't the agents fill out w9s and then get 1099s from the BPO company?

I never recruit but have 3 agents. One asked me to colist s few properties with her. We just closed one and she called me about the commission. I kept the buyer's side commission. I replied we split the listing and I have the buyer. I dealt totally with the buyer. She is on a 90/10 split. I want to be fair. Should we split the buyer's side?

Nope . . . . Unless you had her do all of the Hand-Holding through the Mortgage and Closing Process as a Training Activity; but your scenario indicates that she did not participate so the answer remains . . . . Nope!

Thanks Vermont007. I agree but I decided to go ahead and pay the agent anyway - be the bigger person. The funny thing is she contradicted herself. There was a repair that the buyer wanted done (seller wouldn't pay) or there would not be a closing. At this juncture my agent offered to "chip something in" but never offered to split the cost then.
The good thing is I found out where she is now. I have done a lot of extras for her but will not do the next thing I was planning for her. Her loss.

There'd be more Training Value if the Buyer's Side was going elsewhere into a Cooperating Agency's Pocket. People seem to have difficulty visializing the different pieces of the Pie when it's staying in house.

If you have three Agents, then it becomes critical to maintain a consistent Policy. It's amazing how the Human Mind can make instantaneous complex calculations on how one commission split differs by fractions of a dollar from another. I know, because I pushed those numbers endlessly myself . . . . as if calculatng it one more time would make it come out bigger.