What You Need to Know About the 100 Percent Commission Model in Virtual Real Estate Firms
April 11th, 2020 by David Martin
In the world of real estate, agents live on their commissions. Unlike in other careers, there is no monthly salary to speak of. Industry statistics show that the average income for a real estate agent who works between 21 to 40 hours a week is $46,458. The earning potential all depends on how much time and effort an agent puts into his work.
A commission model that is now gaining momentum is the 100 Percent Commission Brokerage structure. About 15-25% of the industry is practicing this model. It might have been around for over a decade, but innovative firms have tweaked their features to provide leverage for their agents.
If you’re about to start your journey in real estate, here are the things you need to know about 100% commission brokerage structure in virtual firms.
Traditional Commission vs. 100 Percent Commission
The national average for traditional commissions is 50/50. For example, if the total sales commission is $40,000, the broker receives $20,000, while the agent will receive $20,000 as well. With the 100 Percent Commission Model, the agent gets the $40,000.
If the agent pays a minimal monthly fee of say, $300 to the brokerage firm, he will only shell out $3,600 every year. The net income of $36,400 is significantly higher than the income derived from the traditional commission model. Remember, even if you sell more properties, the monthly fee does not change, which makes the earning potential unlimited.
Not All Commission Models Are Created Equal
Before choosing among the firms that offer a 100% Commission structure, ask about their fees. Usually, there are desk, franchise, or marketing fees. Sometimes, it is a combination of two or three of them. The best firm would only have a monthly payment that you have to pay. Some even offer referral fees as an additional incentive. This arrangement is more cost-efficient and convenient for the agent.
Be wary of firms that have hidden fees. They may be offering a 100 percent commission, but you will be slapped with additional expenses in the long run.
The 100 Percent Commission Structure Must Come with Training and Support
Just because a company gives you a 100% commission does not mean that you are on your own. A 100 Percent Commission Brokerage firm should come with intensive training and technological resources so you can reach your career goals. An agent will only be as successful as the support that their company gives them.
A Virtual Brokerage Firm Offers More Savings
Imagine not having to go to an actual office. There will be no transportation costs in going to and from your workplace. Savings may seem small, but it will equate to a significant amount in a year.
A virtual real estate brokerage will also allow you to make the most out of your time. Since you do not have to contend with other commuters during the morning and afternoon rush, you will have more time to do administrative work. More time means more opportunities to find leads and communicate with clients. These tasks will then translate into closed deals.
The real estate business is a lucrative career if done right. The best way to go is to work for the best real estate brokerage firm the provides the best perks that come with the 100% commission.