How do 100% commission brokerages make money

As a 100% commission brokerage, we get this question almost every day from real estate agents looking to make a change in brokers to a 100% commission brokerage.

Our broker Travis Breton gives a clear explanation of how 100% commission brokerages make money. Travis also provides a clear commission comparison example between a 100% commission brokerage and a traditional splits brokerage model.

First we learn the difference between the 100% commission brokerage model and the traditional brokerage model.

In a 100% Commission Brokerage Model:

• Agent receives 100% of their commission.
• The real estate brokerage charges a nominal transaction fee.
• The brokerage transaction fee is not based off of the amount of real estate commission the agent earned.
• The brokerage transaction fee is usually fixed or based off of the amount of the sales price.
• Some 100% commission brokerages charge additional fees for E&O Insurance, Compliance Reviews, Risk Management, Personal Transactions, etc.

In a Traditional Brokerage Model:

• Agent receives a portion of their real estate commission.
• The real estate brokerage charges the agent a percentage of the real estate commission they earn (split).
• The split is usually NOT fixed and is generally based on a minimum percentage of real estate commission earned/charged.
• Some traditional model brokerages still charge additional fees for E&O Insurance, Compliance Reviews, Risk Management, Personal Transactions, etc.

In this example, the 100% Commission Model would put an additional $1005 in your pocket.

If the Traditional Brokerage has a policy in place to calculate commission based on a minimum commission amount of 2.5%, your take home real estate commission would be $400 LESS for a total of…

$14,000

In this example, the 100% Commission Model would put an additional $1,405 in your pocket.

So the answer to “how do 100% commission brokerages make money” is by charging a transaction fee vs. taking a split.

100% commission brokerages offer a modern alternative to the traditional splits based brokerage models.

The 100% commission model also allows the agent to:

• budget operating expenses better by having fixed brokerage fees per sale
• be more flexible with their business & marketing plans
• invest more money back into their business to accelerate growth
• be more competitive with their fee for service without additional brokerage interference or fee penalties
• offer rebates to their clients if/when they need to

If the 100% commission model could improve your business and keep more money in your pocket from every closing…

let’s talk!

(866) 344-7473

www.RiseRealtyCA.com/join-the-team