Commissions, What Works, What does not, How do you do it?

Great questions. I work for a Broker now, in more of a partnership relationship. But, it took about five years to get here. We split commissions on new construction projects, as we both help develop the product and market the product. I pay 10% to him on my private sales, up to 10K. If he gives me a referral, I pay him 30%. It's working well - and I have no complaints. It would be tough to go elswhere - although, I do have to do a LOT of my own online marketing. ( However, he does pay for our website and IDX. )

Bob, I'm in the mortgage world but we're still commission based for the most part.

I've turned down higher splits & even pretty decent salaries because my company offers me the most bang for my buck - I think that's the same in all commissioned businesses - if a company offers a ton of resources, then a commission may not need to be as large.  If they offer very little assistance, they'd better have competitive splits. 

When I look back at all the money I dished out to big box real estate companies I get sick.  I'm so glad I finally opened my own brokerage and now what I earn I keep.  My Agents pay me a nominal fee as I recall the days of me the money John Boy.  Referrals I pay up to 25% and expect to be paid the same.

This is a great question, because it's more than just the percentage of the split.  With my broker, she supplies services, including professional photography and listing brochures, and she gives the agents an excellent split, depending on experience and productivity.  I think that she's provided a far better value than a company like ReMax could.  Also, her approach enalbes us to be very competitive in the very high end of the market.  So you're talking about a much higher average sales price than many of our competitors.  

Bottom line, give your agents value!

Having formerly been a corporate wife, assissting my former husband transfer employees from other companies to ours, I can safely say that that swayed me from moving around so much.  It costs money to move and start over again and I'd just as soon stick with the same company and work harder on my business.

I've been with RE/MAX for almost 11 years now as a 100% agent and have no interest in moving currently.  I pay a flat fee (expensive) but I also receive tons of free tools.  In my opinion, it pays for itself.  So, offering better tools and skill sets to employees for a higher fee can work if the tools are constantly improving and evolving, helping employees to improve their business.

You are a wise man.  But even Solomon had problems with splits.  You will never please everyone.  But, the one piece of advice I would offer is just be consistent.

Bob  I used to have 6 agents working for me but I have more free time and make more money working by myself.  But I do try to help other agents (regardless who they work for) in the business to succeed.  I get satisfaction knowing I helped someone else learn this business.  (That said, I got an education from another agent today!)

Hi Bob, my brokerage has an established split for its agents with an annual cap. Once you met the cap it is all yours until the next annual period begins. Plus they have a profit sharing of sorts that you can participate in by bringing someone else into the brokerage and you get it so long as you remain active with the brokerage.

Much of the time it really depends on the property.

But usually it is 55/45 (apx)

I really agree with so many of the comments people posted here. It's a good question. Sometimes I fee I showed this person one house and they took it, I made out great. Others are clients who look at a million and one properties and nothing happens. Sometimes I say to myself when I get an easy one, that made up for all the people who ran me around and did nothing. But I am more of a buyer's agent.

Good question Bob. I think for the most part as a Real Estate Professional you really work hard for your money.

Bob, I didn't care much for the split I had when I was with Remax, but at the time it was ok.  The franchise I worked for then changed names and went to a flat fee split...it was a very small fee which was great for the agents, but the owner was counting on volume...ultimately that didn't work out for them.  Where I currently hang my license is very equitable in terms of splits and and referral fees from company generated leads.