Q & A with Cheri Alguire: Splitting Commission | Pro Real Estate Coach

Q & A with Cheri Alguire: Splitting Commission

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Q & A with Cheri Alguire: Splitting Commission
by Cheri Alguire
 
       "I am joining a commercial real estate team and have questions as to what is customary as far as splitting up commission, etc.:

o Currently the "team" is asking for a 50% split of whatever I bring in; including leads that they provide as well as leads that I cultivate on my own.

o If I bring in listings to the team, then I am a "Buyers Agent" and therefore not allowed to take listings myself - I get a 25% referral fee.

o If they bring in more Buyer Agents in under me, I am expected to oversee their transactions and I get a 5% cut of their commission on deals that I help with.

It seems like a "what is yours is mine and what is mine is mine" setup to me. Is this typical? I think it would be more fair to keep the 50/50 split on the referrals that they give me that end up in closed deals, and the leads that I generate on my own should remain my own." ---Stumped in St. Louis

"Actually, yes, the split you are describing is very typical. Most Buyer's Agents are set up on a 50/50 split situation sometimes 40/60 and sometimes as high as 60/40, but 50/50 is by far the most common split out there based on what I see in the industry. Lead Buyer's Agents typically get anywhere from 2-10% or a "flat fee" for managing other Buyer's Agents These splits usually differ depending on how experienced the other buyer agents are and how much responsibility you have to make sure the other buyer team members are "on goal." The listing referral of 25% is very generous. I have seen that as low as 10% but 15-20% is more typical here.

As far as it seeming like it is a "what is yours is mine and what is mine is mine" set-up, I would invite you to look at what the Lead Agent or team is doing for you. Their job is to supply you with the leads you will need to make it. Yes, you will have to carry some responsibility here probably by networking and follow up with leads, but they are typically the ones that pay for all of the marketing, advertising, administrative cost, business expenses and so on!

I am not sure how long you have been an agent or what your current market condition are and have been since you have been in this industry, but assuming that you have been doing this for a couple years in a slowing market (as much of the country has experienced over the past 12 months), I would assume your biggest frustration is having qualified people to work with: a.k.a. lead generation. That is something being on a team can bring. You may also be struggling with all of the other "business" stuff that goes along with being an independent agent. On an established team, there are usually systems in place (follow up plans, drip campaigns,) a solid business plan (including lead generation, transaction goals and a budget), and you don't have to worry about running a business and selling real estate; all you have to do is sell.

I would ask you: what are you looking for?

o Do you want to make a great income? You definitely can do that as a buyer agent.

o Or are you looking to run your own business? When you are a solo agent, you are running your own business. There are positives and negatives that go with that.

o Again, what do you want to do?

I see many people that love the real estate industry; they love the sales side of the business, but do not want the expense and head aches of being a business owner. Those are the people that work well on a team in a buyer agent role. In these cases, it is a win/win." ---Cheri Alguire, Next Level Services

Real Estate, Business and Life Coach Cheri Alguire has partnered with hundreds of Real Estate Professionals and Small Business Owners to help them become more successful in business and in life. Coach Cheri specializes in Group Coaching for Small Business Owners, Working Mothers, and Real Estate Agents and Managers. Learn more at www.NextLevelServices.net

If you're a Working Mother in the Real Estate Industry, visit Coach Cheri's Real Estate Moms blog at http://www.realestatemoms.com/blog