Interviewing brokers now, how does this commission plan sound?

4 Replies

Interviewed a smaller broker yesterday and here is how they structure their commissions. Cycle starts Jan first through Dec 31st each year. Broker has a listing and closing coordinator and also an associate to assist with marketing. Broker pays for all lock boxes and yard signs, agent pays if lost.

60/40 for first $110,000 of gross commissions

Next $70,000 is 70/30

$180,000 and over is 80/20

Avg home in our area is probably $300-$350k

How does this compensation plan sound?

Are you newly licensed or experienced?

That commission structure sounds great for the Broker...unless they are providing you with set listing appointments or are bringing mass clients to you through marketing.

Basically, you would have to sell roughly 10 homes a year to make $60K (the broker made $40k), another 7 to make $49k.

The chances of you selling more than 20 homes in a year (and I don't know your market) but to do that well, and then really only Gross $110k (minus probably 30% in marketing, and 30% in taxes) just doesn't make much sense to me personally.

I forgot to mention a key point in their sales pitch, said they avg around 25 leads per agent each month, mainly from their web traffic and they do not charge for leads. They seem to have the best web presence in the local market.

Howard,

No I am new to real estate, looking for my first home.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.