A real estate team leader breaks down commission splits and payout tiers designed to hit 65-68% gross margin. Buyer agents tier from 27% to 54%, listing agents from 25% to 35%, with clear paths to $110-150k for agents within two years.
I want to quickly cover value based commissions. Before you start building a team, you've got to decide what the model looks like. Okay. So for us, my model, we're doing a little bit more than 60% of our volume from listings. So this is dependent on where your business is coming from. But essentially you've got to have a target for how much you want to pay out on the listing side and how much you want to pay out on the buyer side to agents and what the split between listing and buyer business is going to be. So you can figure out your gross margin and a very simple gross margin, what you bring in versus what you pay to agents. Right. So that to me, I want to be in the 65 to 68% range gross margin. So after I pay my agents, there's 65 to 68% left over for the team to make decisions on how to spend. And this is how it happens. We do 10% off the top, it ends up being it's 30, 40, 50, 60. On the buy side, it's 27, 36, 45, 54 and it blends out at 45% for us. And then a listing side, it's 25 and 35, which ends up being 22.5 and 31.5. And that's it. That's value based commission structures. And if someone asks, we provide a clear path to 100K on our team. There are very few agents in my market that take home more than 100k. Three of my four buyer agents who are less than two years in the business and they'll all make between one, I think 110, 120, probably in the low side bridge to upwards of 140, 150. The other two. One of my senior buyer agents is struggling with some personal issues and that's why he's not hitting his goals. But he's made six figures before. And we have two new agents which once we get them ramped up, their goal next year will be to hit six figures. Then we've got three listing agents. So that's it, that's value based commission structure.
