Commission Split for New Agents

What commission split plans do your brokerage provide to new agents?

  1.  50 / 50
  2.  60 / 40
  3.  75 / 25
  4. 100%

These are the common splits, with the 100% split being offered the least to new agents.

We surveyed real estate brokers and found that most new real estate agents start in the 50/50 to the 60/40 split range.  Brokers say this is due to the amount of time they have to spend teaching and training new agents.

What New Agents Expect

Agents new to the real estate industry need time to understand how real estate works, build their business, and stay profitable.  Brokers offer  the following list of items that agents expect their broker to provide:

Industry Jargon and Terms.   Agents need to know the different terms, meanings, and expressions used.  Especially terminology used on listing agreements.

Marketing and Prospecting.   For agents with no prior sales experience, agents look to brokers to show them how to write and prepare marketing materials.  Whether advertising online, sending emails, or send postcards, agents want information on the best words, phrases, pictures and other info that will help their efforts to get new clients.

Listing Agreements.   From their studies and exam prep, new agents are aware of the listing agreement.  However, when they actually get their first client, completing their first listing agreement can be overwhelming with the different options, contingencies, and contract language.  New agents look to their broker for assistance in completing the listing agreement.

Buyers Agreements.   For those new agents interested in having their clients sign a buyer’s agreement, agents would like for their broker to assist with understanding the agreement’s terms and conditions, along with understanding the agent’s legal and ethical obligation to their clients.

Contract Negotiations.   New agents want to know, what do they say and not say during their listing presentation.  How do they handle it when a potential client makes a request that the agent is unfamiliar with.

Help Closing their First Couple of Deals.   Dealing with closing companies, earnest money, various documents requests, and communications with the agent on the other side of the transaction, can seem like a lot to handle for a new agent.  Thereby, new agents often seek the knowledge and experience of their broker to help them with getting the transaction closed.

Win / Win for Agents and Brokers

Agents new to the real estate industry are excited about starting their real estate career.  They want to succeed.

Brokers, who accept new agents into their brokerage, want the agents to have a successful and fulfilling real estate career.

Brokers must spend their time and resources getting new agents prepared, and the commitment by brokers can be six months or more before an agent does their first deal.

New agents understand that the broker is making an investment in them, and that the broker’s return on investment is only received when the agent closes a deal.

Thereby, the agents and brokers both win when they work together.