As a real estate broker, understanding and setting up agents’ commission plans properly is key for the overall success of your brokerage and your agents. There are multiple commission structures that are commonly used in the real estate industry that you should be aware of; however, as the industry evolves, so does the creativity of innovative new commission structures
Fixed Splits
Fixed splits are the most simple to understand and are the most commonly used. In a fixed split commission plan, the commission is divided between the broker and agent at a predetermined percentage.
Example: 50/50 or 60/40
Fixed splits are so common because of their simplicity which makes internal operations and accounting for the brokerage much easier and predictable.
Tiered or Graduated Splits
With tiered, or graduated, splits, the percentage of commissions may fluctuate (typically increasing) and is based on different goals, transaction volume or dollar volume, which is agreed upon by the agent and broker. Usually, as an agent’s sales numbers increase, their commission split will also increase. This commission split is often used to motivate agents to increase overall sales numbers or to keep high-performing agents with your brokerage by helping them to anticipate raises in their commission structure.
This type of commission structure can add more administrative duties and are much more complex than fixed splits. They are less predictable and harder to execute than traditional fixed splits, but can be a great way to motivate agents and build loyalty!
Fixed / Flat Fee
In a fixed or flat fee structure, brokerages charge agents a set amount of money and allow the agents to keep typically 100% of the commissions or a very large percentage. Fixed fee commission plans often come with far less support and tools provided by the brokerage. The specific fees charged to the agent by the brokerage vary from brokerage to brokerage. Often fixed fee brokerages will charge a recurring monthly (or annual) fee to the agents that is paid regardless of production and then oftentimes a per transaction fee that is also paid for each successfully closed sale or rental transaction.
How TotalBrokerage Simplifies Agent Commission Plans
- Automatic Commission Calculations TotalBrokerage’s All-in-One Real Estate Brokerage Software Solution calculates all of your agents’ commissions in any way you want. Our commission calculation system is flexible, scalable, and easy to use. Fully automate the calculations of complex commission structures like tiered or graduated splits.
- Keeps Your Accountant Happy With TotalBrokerage, you can track all expenses for your brokerage down to the individual transaction or vendor and export by CSV for convenient reporting.
- Quickbooks® Integration Our Real Estate Brokerage Software natively syncs to QuickbooksDesktop ® or Quickbooks Online®, so your brokerage won’t miss a beat when you transition to TotalBrokerage.
TotalBrokerage eliminates the need for a separate Commissions Calculation, CRM, Lead Tracking, Transaction Management, or other back office programs because TotalBrokerage has all of these features and so much more for your real estate brokerage in one, unified platform.
Our All-in-One Real Estate Brokerage Software Solution Features:
Lead Management, CRM, Marketing, Transaction Management, E-Signature, Commissions & Accounting, Reporting, Agent Onboarding, Human Resources, Intranet, API & Zapier, Auditing & History