As a real estate agent, you’re probably familiar with the commission split method a brokerage offers you in exchange for the use of their name and help with marketing and other office-related perks. But, not all brokerage models are created equal. Let’s dive deep into RE/MAX’s commission model for real estate agents.
The Highest Split Plus Desk Fee
The 95/5 agent enjoys the highest split available — 5% of a sale’s gross commission goes to RE/MAX and the agent gets to keep the other 95%. However, the agent will pay a desk fee for a spot in the local office, marketing and paperwork assistance, and the use of the well-known RE/MAX brand.
While desk fees vary by specific office, this is the best option if you’re a high volume agent and can budget for your negotiated desk fee. Desk fees can range anywhere from $300 to $2500 depending on which perks are provided and may include space in the office, advertising, business cards, broker fees, etc.
RE/MAX Alternative Payment Plan
While the 95/5 commission split is probably the most profitable option for any volume of sales, not everyone wants to be on the hook for desk fees. This is especially true for newer agents who may start off with a dry spell for a few months and need to buy some time while they begin to generate an income, making a name for themselves in the real estate world.
The RE/MAX Alternative Payment Plan — or RAPP — allows agents to deduct the brokerages fees as a percentage of their commission from a sale until the contract balance is paid off. Think of it like a loan for office fees — plus, you only pay when you make a sale. This is probably a good option if you’re just starting out and don’t have the funds to foot the monthly desk fees until you generate a good number of sales. But, you’ll still want to set aside some for individual print or online marketing.
What would be your monthly fee is multiplied by twelve months to arrive at your yearly RAPP contract amount. Depending on your prior year’s gross commissions, you’ll then pay 20%, 30%, or 40% of each commission to the brokerage until your RAPP contract is paid off. Once you reach this cap, your commission will move to 95/5. A typical cap is around $23,000/year. If you’re just starting your real estate career and gross less than $25,000 in commissions, you’ll start at the 60/40 split. As your gross commissions increase each year, your commission split will improve.
The cap encourages agents to continue to push themselves to complete more sales, even after they’ve paid off their RAPP contract amount. The agent is motivated by only having to pay 5% of their gross commission once they’ve reached this cap — a big jump from their previous commission split.
Accelerate Your Growth
High quality leads that convert to a sale (and lots of them!) are key to your success whichever RE/MAX commission model you choose. While leads can come from all sorts of places, Clever provides highly vetted leads, saving you tons of time and energy that you would otherwise have spent on marketing and client acquisition.
There are no upfront costs — you only pay when you close, not for individual leads that don’t pan out. When serving as a listing agent to a Clever client, you’ll get $2,000 of a $3,000 flat-fee listing, or 75% for a 1% listing fee leads (homes that sell for more than $350,000).
When you’re a buyer’s agent, you’ll pay a Home Buyer Rebate of $1,000 to your client when they purchase a home under $500,000. Then, you keep 75% of the remaining gross commission. When getting leads from Zillow or Realtor.com, you’d make just 50% of the commission.
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