Forbes Property Group is actively seeking enthusiastic, reliable and friendly real estate agents to join our team! Stop in and meet with us today and let Lee show you how rewarding a career in real estate can be for you and your family. We not only provide a supportive team, but we also have an excellent systems in place to produce income for you, the agent. We are a family, so you will get to meet with each of us to insure you are a great fit for our group. And with that approval, we can rely on each other as we grow, insuring our success together.
While pay is rarely the most important issue in job satisfaction, it is certainly near the top and a decisive issue! The finest sales people in the world get paid on commission and they wouldn’t have it any other way! Dilligent sales agents can easily surpass the restraints of hourly pay, and most often earn more than their peers in salaried positions.
There are downsides, of course: you get paid only when you complete a transaction, the industry is cyclical (good and bad times), and the competition can be formidable. Most ‘normal’ people also cannot handle receiving irregular paychecks and unpredictable income. But the ones who can have the ability to make far more money.
In real estate, there are many factors in how much money you can make. To evaluate you opportunity and compare with other brokerages, everyone should consider all of these issues below:
The commission is typically paid by the seller and is divided between the listing and selling brokerages. A common example might be 6% of sale price with a 50/50% split of the commissions between the listing brokerage and the buyer’s brokerage.
Inside each brokerage, there is another split – between the brokerage and the selling or listing agent. This can vary widely from office to office. Some can be 50/50% or worse! Some may be as good as 80% to the agent and 20% to the brokerage. At Forbes Property Group, our Brokers’ commission is split 70% to the Realtor® and 30% to Forbes Property Group, every time a commission check comes in from a sale for our starting agents.
The crucial issue here is how much of each commission check from your sales will you be able to keep? Obviously the more the better, right? Maybe not…
Not every brokerage will offer a commission cap! The cap is the point at which the brokerage will take a reduced commission split and the Realtor® receives 90% of the commissions. Caps are usually restarted annually, either the calendar year or the contract year (anniversary of joining the brokerage). Obviously a broker will want to ‘cap’ as early in the year as possible in order to make more money during the year. An agent who has capped has seemingly unlimited income potential.
The ‘cap’ is a more important factor than the ‘split’ to a successful professional. Those who do not sell much will make more money with a better split (60% vs. 70%). However, those who are successful in sales will make much more money by enjoying 90% of their sales after fully satisfying their share of the brokerage costs.
Brokerages can be creative in finding ways to nickel & dime you to death. Most brokerages are money-making operations and naturally look for as many ‘income streams’ as possible. You must look at every service and product they give you as a profitable center for them.
If your brokerage requires you pay a royalty to the national or regional office/brand, then it costs you a lot more than nickels and dimes. Royalties commonly are 5-6% of the gross commission on each and every transaction (although I have seen 8%!). Only one that I know of will cap the royalty at a certain number, $3,000 per year, for example. The value of the royalty (having a national brand) can be debated and is discussed in other articles.
Investigate and be alert to fees and other charges which will come out of the gross commission for each transaction:
Check for these hidden costs
Agents receive 70% of the commissions until they cap at $100,000 gross commissions earned. After this they receive 90% of the gross commissions until the end of the contract year.
Because the cap is designed to satisfy the full needs of the brokerage, we are excited when our Realtors® cap very early in the year and enjoy all the fruits of their labor for the rest of the year. With E&O Insurance and transaction Management costs, risk exposure is related to the number of transactions so we assess those costs per transaction side, we believe this is the fairest way to share costs.
Here are a few links to review about choosing the best type of real estate office for you to work in.
of course our brokerage’s costs are subject to change. Please make a private appointment below to schedule a meeting with the broker.
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