Defining Commission Models
April 1, 2009 by e-Partner · Leave a Comment
The ability to create contemporary commission models is a requirement for profit and survivability in the New Real Estate Economy and when it comes to your commission model, creativity can work wonders.
One of the prerequisites for creating effective commission models is allow them to be driven by market area and Broker supplied assets. Another requirement is having an accurate market penetration model that allows you to hire agents in “NEW” markets who work from home offices, creating fee-based cash flow for Broker/Owners without the corresponding bricks and mortar commitment.
Listen to this e-Partner Podcast; it will help you think about your commission model(s).
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Factor 3 – Commisson Proforma
March 24, 2009 by e-Partner · Leave a Comment
Let’s talk about the money. The real estate brokerage premise has one great overriding premise: the generation and retention of gross commission income. This should come as no surprise to any red-blooded capitalist entrepreneur because income generation and profit retention is the basis for any viable business enterprise.
During the 1994-2004 time period, the commission proforma for the real estate industry took it on the chin. The following illustrates what occured during this decade of transformation:
| Transaction Commission per Closing | - | Decreased 20-40% |
| Commission Paid to Agents per Closing | - | Increased 25-50% |
| Annual Brokerage Office Operating Costs | - | Increased 15-20% |
| Technology Operating and Training Costs | - | Increased 150% |
| Transaction Skimming by New Middle Entities | - | Increased by 1000% |
