The majority of you are accustomed to the previous model where an escrow closes. Escrow is emptied of a gross commission that has been pre-approved by the broker and the seller.
This check may be issued directly to you or the Broker may need that it be submitted to them until the file is signed off for compliance considerations before cutting a check to you, the Agent, depending on the terms of your agreement with your Broker.
In order for escrow to pay agents directly, we advise the agents in our business to have the Transaction Coordinator sign off on their files three to four days before closing.
Nowadays with this new 100% commission model as an agent, you can keep all your commissions.
Advantages of this new 100% commission model
The most obvious advantage is that you keep all of your profits rather than sharing them with your broker. The ability to choose your own hours and be exempt from the restrictions of a working contract ends and you become your own boss, which is the second benefit.
In this situation, you will be preparing the showings, timetables, and appointments based on the importance of each meeting, which is vital in any business.
Other benefits include:
- Opportunity to create your own brand
- Sales training only if you prefer it, not when the broker arranges it
- Total transparency remains between you and clients
The promise of leads was the primary tactic employed by huge brokerages to entice top real estate agents. Of course, this meant that one had to go through all the hoops to go anywhere, even though there was no assurance of generating significant leads.
Brokerages continue to fall short of their commitments, either due to a lack of funding or because they lack a strong client-finding network.
A dark reality
With Top Producing Agents, a Broker’s profit margin is minimal to non-existent, and even less so with Real Estate Teams. Team Leaders are Agents and/or Broker Associates who are acting as a Brokerage but are not subject to the same obligations or liabilities that the Broker insulates the entire team from.
Most Brokerages rely on new agents with much smaller commission splits to make up for lost revenues under the justification that they will need to spend a lot of time and money teaching a newer agent on how to be successful.
This may be the case, however, the training that the majority of Brokerages provide is in no way adaptable. It is obvious that a Brokerage requires new, inexperienced agents as a source of income in order to exist under this model. It is not a good connection, really.
The 100% Commission Split Model is now in play. The agent receives the entire commission under this kind of pay. Due to the agent’s payment of a “desk fee” or monthly office fee, this model can pay the agent 100% of the commission.
For the Brokerage, this charge can range from $100 to $300. Because their costs are capped while their income is not, seasoned producers favor this arrangement.