Learn the organizational structure of top real estate teams and the commission splits they implement to compensate their listing and buyers agents. It is important to remember is that sales agents working on real estate teams must embrace the idea of looking at their total sales volume and annual net income rather than being overly sensitive to their commission split percentage. Agents on real estate teams typically receive a much lower commission split percentage than solo agents, but the administrative support and leads received from the team typically enables them to sell far more homes and generate a lot more income than the majority of individual agents. To understand this point further, watch how the listings specialists and buyers agents on Claudia Restrepo’s mega real estate team help her sell more than 350 homes a year, and learn their respective commission splits in this video. Then we examine some of the typical real estate team commission split models below.
Commission Splits for Listing Specialists
Listing specialists should be paid based on their ability to generate appointments, turn appointments to listing contracts, and convert listings into accepted offers to purchase listings. The amount of their commission splits can vary depending on whether a team employs an inside sales agent (ISA) to convert leads into appointments for the listing agent. When ISAs set appointments for listing specialists, the listing agents typically receive around 25% to 35% of the listing side commission. When listing specialists generate appointments without the help of ISAs, the commission splits are typically between 35% and 45% to listing agents. Administrative listing coordinators, which are usually compensated on an hourly/salaried basis, handle all of the tasks and duties associated with the customer service and marketing of listings to enable listing specialists take more listing appointments and generate more income.
Commission Splits for Buyers Agents
Buyers agents are generally compensated on a 50/50% commission split with most real estate teams. As with listing specialists, commissions splits for buyers agents that receive appointments from inside sales agents (ISAs) are typically reduced by 10% to 20% to compensate the ISA. These commission splits may also be modified to differentiate between leads generated by the team and leads generated by the buyers agent to provide incentive for the agents to procure business from their own centers of influence (COI) are through prospecting activities. For example, a buyers agent might receive a 40% commission split on team-generated leads, and 60% for clients they procure themselves.
Agent commission splits might also be increased over the course of a year as specific goals are reached. For example, a buyers agent’s commission split might graduate from 50% to 60% after the first 15 units are closed, then graduate to 70% after 30 units are sold, and then to 80% after 50 closings. This compensation structure also creates incentive for agents to succeed and establishes a win-win scenario with the team.
Finally, real estate teams should regularly source buyers agent business to differentiate which closings resulted from leads generated by the team versus the buyers agent. Teams should also establish expectations by implementing standards for the amount of business agents procure when compared to leads provided by the team. Most real estate teams require buyers agents to generate an amount of business from their own COI and prospecting activities to equal the amount of leads provided by the team. Scoreboards should be kept and regularly shown so that all of the team members are aware as to whether buyers agents are pulling their weight by performing lead generation activities. This prevents buyers agents from becoming too dependent on receiving more of the team’s leads and demanding increased commission splits when they aren’t making enough money. Instead, they focus on lead generating for more business to increase their income.