Each individual agent is worth a lot to the team.
As a broker, you may ask yourself, “What are my agents worth to my brokerage?” You probably asked yourself this question when you hired your team, carefully deciding which people would work best in helping your brokerage thrive. While there are many answers to this question, there is one incredibly important factor that leads to a brokerage’s ultimate downfall or success: commissions.
Agents typically receive a 2.5-3% commission from their clients on a given sale. This is an average commission and most brokerages are in agreement that it is a fair price to ask of a client. A large amount of work goes into the commission that agents receive: they work hand-in-hand with clients in order to ensure that all their needs are met. They conduct listing presentations, write up contracts, plan meetings around their client’s schedules, search for homes, show homes, conduct open houses, and much more. It is needless to say that the 2.5-3% they receive in return in well-earned.
However, not all clients feel the same way. Some view this commission as a “rip off” on their part, since they are losing a large portion of their deal. The biggest mistake an agent can make is lowering their commission in order to accommodate for a client – but that doesn’t mean it doesn’t still happen.
Lowering commissions is one of the biggest reasons why real estate agents end up failing. If they are not making enough money off of a sale, they will not be able to continue in the career path they are pursuing. They lower the commission, make much less money, and end up having to leave the brokerage due to the hole they dug themselves in.
This flaw is detrimental to a brokerage and can even lead the entire company to fail if agents have to leave due to poor judgement on commissions. It is important to drill this into the minds of your agents – the commission you receive is hard-earned and very well deserved. It highlights your worth to the company.