If you are considering a career selling Gig Harbor real estate, one of the biggest questions you may have probably surrounds real estate compensation plans. Most agents get paid on a commission as a percentage of the sales price of the property and these commissions vary from company to company. Which option is best for you and your new career?
How Do Real Estate Agents Get Paid?
Most people (including a lot agents) don’t really know how real estate professionals get paid. Every agent in Gig Harbor must be affiliated with a brokerage; inside that company is a designated broker that is in charge of all listings and sales. When an agent sells a property, a commission (usually a percentage of the sales price) gets paid to the brokerage and then a portion of the money is paid to the selling agent. This is what is known as a commission split.
Most real estate compensation plans involve a 50/50 split, meaning that 50% of the earned commission goes to the agent and 50% goes to the brokerage. Some companies have “caps,” a maximum amount that an agent will pay in a fiscal year, and many don’t. If you’re considering a career in real estate, these are questions that you should get answered right away.
Keller Williams Compensation Plan
At Keller Williams Gig Harbor, we not only have the best real estate training in the industry, but also one of the most attractive real estate compensation plans. Every agent (not just the super producers) are on a 70/30 split, with 70% of the commission dollars going to the agent and 30% going to the company. We also have a company cap of $20,000 per year, with a $3000 franchise royalty yearly. Once those “caps” have been met, the agent gets 100% of their commissions for the remainder of the year.
What does this look like in real terms? If an agent sells a home for the Gig Harbor median home price of $364,000, and receives a 3% commission (anywhere from 2-4% would be “standard”), that’s a $10,920 commission. At Keller Williams Gig Harbor, the agent pays 30% ($3276) to the brokerage and 6% royalty to KW International ($655). So $6989 goes into the agent’s pocket, whereas in a 50/50 company, only $4805 goes to the agent.
Imagine that the agent sells one home a month at the same price, same commission. They would earn $131,040 worth of commission. At Keller Williams, agents pay up to their “cap” ($20,000 company dollar, and $3000 royalty), and then get 100% of their commission. So one median home price sale per month at a 3% commission would net the agent $108,040. At a company with no franchise royalty cap, the agent would pay an extra $4800 per year in royalties in this scenario (and significantly more the more the agent produces).
When researching companies and comparing real estate compensation plans, make sure you take a look Keller Williams Gig Harbor. Our belief is our agents are the driving force behind the company and we want to compensate them as such. Before you begin your new career, come see why more agents are choosing to join Keller Williams than any other real estate firm!