Keep Your Commission - How much does RE/MAX pay ?

In this blog post we're going to compare a one hundred percent commission virtual online flat fee California brokerage to RE/MAX.

Many realtors believe RE/MAX is a 100% commission brokerage.  Lets take a close look and see if that's really true.

Lets start off mentioning that new agents at R/M start out on a 50/50 split.  After that, every agent is going to be on a different commission split.  So instead of going through a bunch of complicated percentage figures on how much commission R/M takes out, lets just keep it simple and just look at the all the fees they charge.  Following is a quote I found on a real estate discussion board directly from a R/M agent; "My desk fee is $14,000 a year and my split is 95/5, so is costs me $19,000 ($14,000k desk fee + $5,000 commission split) for the first $100k I make."  

So this R/M agent gets to look forward to paying out a cool $14,000 a year for his desk, not to mention the other additional fees R/M tacks on for advertising, etc.. Yikes ! For $14,000 a year I sure hope that desk is made of gold.

Again, lets look at the CURB business model.  

Desk fee: $0

Advertising fee: $0

Franchise fee: $0

Commission split to agent: 100%

Please do the math and decide which business model works best for you.

CURB

California's Premier 100% Commission Brokerage

www.KeepYourCommission.com

Keep Your Commission - How much does Keller Williams pay?

In following blogs I am going to post the commission differences in flat fee 100% commission brokers to the commissions the large corporate brokerages; Keller Williams, Coldwell Banker, ReMax, Century 21, etc..  take from their agents.  This blog will be on Keller Williams.

The following information is copied from an inman article where the CEO of KW spoke;

"The commission split that Keller Williams offered agents is a hybrid of that offered by traditional franchises and 100 percent commission organizations. The Keller Williams agent/Keller Williams Realty receives a 70/30 commission split from the first dollar of gross commission income generated. The agent was responsible for paying a franchise fee to the international office each year, which was capped at $3,000. The agent was also responsible for paying a fee to the market center,..."

So let's use the median sale price for a home in California this year (from CAR) which is $449,500, to calculate how much an agent would receive if they were with KW.  On a 3% commission the amount earned by the agent would would have been $13,485.  After KW takes their portion of $4,046 the agent will end up with only $9439.  ..yikes ! We're not done yet. KW agents are also required to pay a "franchise fee" of $3,000 per year on top of the already huge chunk taken out.  So, if the average agent only sells only 3 properties a year (according to NAR) then that's an additional $1,000 the agent must pay to the KW broker. So after all the commission grabbing is done the agent has given KW $5,046 and is left with only $8439 from the original $13,485 they earned. And I'm not even including another additional fee KW agents also must pay to the "marketing center". 

Now lets look at that same transaction with CURB.  Instead of an agent paying a whopping $5,046 in commissions with KW, with CURB for that same exact transaction they would only pay $595 + $95 E&O, for a grand total of $690 vs $5,046 !  With the KW model the agent ends up with only $8439 as opposed to $12,795 with CURB.  That is an extra $4,356 in your pocket !  Do that only 3 times a year and that equals an extra $13,068 that stays in your pocket for you to spend on anything your little heart desires. 

Keep Your Commission - But my broker gives me training !

A one hundred percent commission / flat fee agency is great, but what about training ?

Some new real estate agents try to reason that working with a traditional style brokerage and paying thousands and thousands of dollars of their commission, is for the training the old school style brokerages offer.  At CURB we've got that objection covered. We host an exclusive monthly webinar teaching our Realtors specifically how to market themselves and stand out from the sea of other Realtors,  All at no cost to our agents.

Furthermore, if you desire even more training, consider this: if you just do 1 single transaction on say a $500,000 property, your commission will be $15,000.  Out of your $15,000 you have to give 15% ~ 50% ($2,250 ~ $4,500) of your money to your broker for training.   The actual price for one of the top agent training companies is only $439.  On just one single transaction, the $2,250 ~ $4,500 you give to your broker, you could probably have your own private coach come to your house and personally train you !

Think about this; if you sell only 7 homes a year; that equals $15,750 ~ $31,500 of your money your paying  for your offices training.  How much training can you buy from a top of the line private professional real estate coach with $15,750 ~ $31,500 a year ?  It doesn’t take much to figure out paying $439 for your own professional coach and spending the $15,000 ~ $30,000 on a first class round-the-world cruise for two would be the better option.

Also consider, the traditional training you are getting from your traditional broker is the exact same training being given to all the other agents in your office, as well as all the agents in EVERY one of their offices !  How is that going to help you stand out from the thousands of other agents being “trained” the exact same way as you ?

Keep Your Commission - A New Era In Old Real Estate Brokerages

100% commission / flat fee virtual online real estate brokers have officially made their way into California, breaking the age old business model of doing real estate. There isn't much business left anymore that isn't conducted online, so it was only a matter of time until real estate brokerages caught up. Who would have thought just a few years ago what we'd be doing online; buying insurance, planning vacations, buying cars, drawing up wills, holding business meetings, and now even doctor appointments are done online!  Just a few years ago we had to get in the car, drive to an office, and find a parking place to do all of that.  So it should come as no surprise the day would come when real estate would be all done online as well.

Because of the technology available to all via the internet, real estate brokerages no longer have much to offer their agents, and because of that they are having a tough time justifying taking a big chunk of their commissions. Agents are now beginning to smell the coffee and are starting to flock to the virtual online model of real estate brokers.

In the past, agents had no choice but to be connected to traditional real estate brokerages because of access of information that only brokers had. Heck, when I started in real estate, in order to see what properties were on the MLS, you had to use this doo-hicky that only real estate companies had that had two suction cups mounted on it that you put a telephone receiver into, dialed a number, then there would be a noise signal that would feed into this machine that printed out lines of coded text on a giant piece of paper of the available properties. ..yikes !  But that was then.

The internet is is the great equalizer and no longer do brokers have a monopoly on information or technology and agents are voting with their feet. Of course there are still going to be the old school real estate agents that believe they need to give a big chunk of their commission to a brick & mortar brokerage office in order for them to function, and thats fine.  But the realtors that don't want to subsidize for a break room to sip coffee with co-workers are going where they can buy lots of their own coffee.  

..to be continued !