Agent Academy: How Our Agent Pay Structure Was Determined
I had a conversation with another agent who asked me about:
Splits, Models and how to structure team listing agent.
I want to share with you what I shared with him.
There is no right split structure that will work for every team. And there is no exact amount that will translate from my business to yours or my market to yours.
Here’s what you need to think about:
How much opportunity will you be able to provide for the agent?
What is the average sales price in the market?
What is the average commission you take in?
What is your expectation from your agents?
Ultimately, it is important to define the agent’s scope of work.
Do you expect your agents to be generating business and opportunities? Should they be managing the transactions? Will they be dealing with marketing and photography? And all other pertinent steps to get the property out of the market? Or will you provide all these steps for them?
Have a clear understanding of what your agent should be doing. Then you think through how much are you willing to pay for agents performing well. How about for agents exceeding the set metrics, how much do you think they should earn?
On the other side, if you do the funneling of lead on the listing side that is another level that you need to think about.
If the conversion rate is not there, it will cost you tons of money!
There’s a certain amount of money that your listing agent can never make because you will be making changes.
Set your passing number. Think through the number they should be earning depending on their performance. Then plug in these metrics considering market pricing, commission rate, and opportunities.
Once you understand these you’ll have a basis to get the percentage of how much you should pay!
Some markets might be 5% to 15% higher than in other markets. Some businesses will be 5%-15% higher or lower based on the opportunity they can provide.
Look at your business and market then you will be able to find the correct pay structure for your business.