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Real Estate before the internet age depended largely on the Brokerage to draw the buyer or seller through a physical brick and mortar store. When the Internet proliferated, we have consumers being able to seek properties and instead of finding the physical brokerage, now have access to the Agent. The relationship of the agent to the client is what matters. As such, the traditional broker now plays a less important role in generating leads. Subsequently, the Agent should be securing more of his hard earn commission. Hence the emergence of the 100% Commission Broker.
Gone are the Full Service Brokers, and new are the 100% Commission Brokers where the agent can now pick and choose transaction channels and auxiliary services.
Do you want to know what is the 100% Commission Real Estate Broker Model?
Have you thought about going to a split where you earn more money?
A 100% commission real estate broker model begins by comparing them to traditional brokerages.
1) Compute the numbers
In a traditional real estate brokerage model commissions split from 50% to 80% for the agent depending upon the company.
Example:
If an agent earns a $10,000 commission, and the commission split is 50/50, the agent keeps $5,000. In an 80/20 split, the agent keeps $8,000.
With many 100% commission brokerages, a flat per transaction fee may be paid such as $600. In that scenario, the 100% commission agent keeps $9,400. Far better than any of the splits mentioned above.
However, not every 100% commission office charges the same fees. While many use a per transaction fee, others may charge a lower fee but also charge an additional monthly fee (called a desk fee). Some may only charge an annual fee.
Read about different brokerage fees below to better understand 100% commission real estate Broker Model.
2) 100% Commission Real Estate Is Here To Stay
While 100% commission real estate offices have been around for many years, their popularity only recently increased. That’s due to using modern technology with services like DocuSign offering electronically signed (e-signatures) for legal documents. To read about the 10 top e-signature apps on the market Click Here.
Removing the required paperwork outside of the real estate office changed the real estate industry. This enabled real estate agents greater independence without relying on typical office infrastructures and support.
Modern technology provides real estate agents with independence making 100% commission brokerages popular.
3) MLS Data Exclusivity
Up until only a few years ago, MLS data was only available through member offices.
Now, much of the MLS data can be accessed from private websites. Buyers and sellers also access MLS data easier online nowadays.
100% commission real estate Broker Model includes public access to MLS data making traditional real estate brokers MLS monopoly obsolete.
4) Work From Home (WFH)
A 100% commission real estate Broker Model must consider the rising popularity of 100% commission agents. Two important reasons for the work at home popularity:
Offices are no longer needed for meeting clients.
Online access exists for all of the essential tools required by agents.
Should agents contribute a large portion of their commissions for office related overhead they no longer need?
How 100% Real Estate Brokerages Differ
A 100% commission broker also requires looking at what individual brokerages offer. Some 100% companies provide more benefits than others.
Consider the Broker Model when deciding to join a 100% commission real estate brokerage:
1. Stability
Real estate markets constantly change. Over the years, some markets experience fast growth while others slide into a downturn. Then, the climate changes making some markets hotter than others.
Today’s hottest property markets may turn cold tomorrow. The ability for a real estate brokerage to weather the storm during downturn times matters.
According to a recent report, many new real estate companies close within two years. Others keep floating through the good and bad times.
Will the 100% commission brokerage you think of joining provide stability?
2. Costs
A 100% commission real estate Broker Model also consider costs.
As explained above, not every 100% commission real estate broker charges the same fees. The three most popular fees include:
File Fee per Closing;
Monthly “Desk” Fee; and
Yearly Fee
Each option has its Broker Model dependent on the agent’s production level.
Do the math based on your past year’s commissions compared to each broker’s fee structure above. Then, you will know which option works best for you.
3. Hidden Fees
A 100% commission real estate Broker Model also consider hidden fees.
Here is where the biggest difference between realty brokerages shows. The hidden fees need to be explained before jumping ship from one brokerage to another. Typically hidden fees include:
Administrative Fee
Compliance Fee
E&O Fee
File Review Fee
Franchise Fee
Technology Fee
Training Fee
These fees do add up.
4. History
Also mentioned above, is the fact that new real estate brokerages often close within two years. Many startups don’t take into consideration all of the overhead costs compared to the income. Shortfalls occur and reserves dry up leaving the broker with no alternative than to close the doors.
Inquire about the history of the brokerage to determine whether they withstood the bad market times along with the good ones.
Stability over a long period of time counts heavily towards predicting future success.
Why Join a 100% Commission Real Estate Brokerage?
A 100% Commission Real Estate Broker Model explained here lead to one conclusion.
Earn more money by associating with a 100% commission brokerage offering:
Stability
Lower Fees
Leadership
Technology
Support
Brand Name Recognition
5. Leadership
How popular is the broker? Does he or she maintain a good professional reputation? Consider what achievements, professional certifications, honors, and community recognitions the broker possesses.
What does the local media say about the broker? How about social media reputation?
Look towards the future. Will this broker lead you towards innovation, keep up with modern technology and lead you into a successful future?
6. Insurance
Errors & Omissions Insurance (E&O) coverage for the brokerage and its agents is mandatory. But, not every insurance policy provides the same benefits. Consider what the brokerage insurance policy includes such as:
Coverage Amount
Coverages (What is Covered)
Deductible
Exclusions
All Other Perils (AOP) Coverage
Insurer Representation
Did the broker obtain minimum coverage or spend a little more for an “A” Rated Insurance Policy?
Look for ultimate protection in case of a lawsuit. Seek high coverages and low deductibles. Obtain All-Inclusive Coverage with Quality Representation.
7. Broker Support
Some 100% brokers just collect checks and do nothing else. An inaccessible broker provides the agents no favors.
Inexperienced brokers don’t know how to provide support to their agents. California licensing laws don’t require highly experienced brokers.
Look into the amount and quality of accessibility and support the brokerage gives to its agents.
8. Updated Technology
The infrastructure of a modern brokerage determines the efficiency of conducting business. Having to email your contracts to your broker should frighten you.
Learning what modern technology tools your broker provides indicates whether the brokerage supports your growth.
9. Strategic Partners
Brokerages often partner with service providers and suppliers in order to control costs.
Expect the best services and products. Don’t rely on a company who won a bidding war to get the service provider contract from your broker.
Don’t let the bottom line reduce you and your clients’ needs.
10. Brand Name
Join a 100% commission brokerage with a good brand name. Never get caught meeting a new client who questions the legitimacy of your realty company.
Do you want to associate with a “Z” realty company or an “A” brand name image that consumers like and trust?
Don’t be afraid of small companies. Boutique brokerages achieve success due to the marketing of their brand name and reputation. Brand marketing allows small companies to thrive based on their excellent reputation.
Why Join a 100% Commission Real Estate Brokerage?
A 100% Commission Real Estate Broker Model explained here lead to one conclusion.
Earn more money by associating with a 100% commission brokerage offering:
Stability
Lower Fees
Leadership
Technology
Support
Brand Name Recognition
Want to know more about Los Angeles, Irvine and San Diego real estate? Click to talk to a local Real Estate Pro