Real Estate Brokerage model with 100% commission – what is it?

What exactly do you mean by that? Those who are new to the 100 percent commission real estate company”  

In this business model, there are a number of terms and phrases that you may find confusing, so to make things easier for you, we highlighted several of them so that you can click on them and learn what they mean.

There is a long-standing tradition among real estate brokerages to pay their agents a portion of the total commissions, although it is possible that the majority of the commissions go-to real estate offices.  The commission percentage “split” between the real estate broker (offices) and the real estate agent is based on a 50/50 split.

Over the past decade, working on a 100% commission basis has become very popular.

In this model, the agent receives 100% of the commission.  Exactly how is this possible? 

Big Block Realty does not have any.

If you join Big Block Realty, you will make a monthly payment of $300 or an upfront payment of $3,000 to get started. The training is provided 100% free to all agents, the agents are able to work in one of four offices, and they receive 100% support.

Big Block Realty offers a referral program through which you can refer new agents to our company and, if you refer five new agents to us, we will free your monthly/annual fee. Moreover, you will also be entered into a drawing for the chance to win a brand new Mercedes Benz. 

There are different types of 100% commission models.

Several other brokers with 100% commission fees, for example, charge their agents over $1000 per month for office space and monthly amenities, but they don’t offer their agents any kind of training or support, and they don’t even have a referral program.  

Are there any advantages and disadvantages to 100% commissions?

We can compare the 50/50 commission model with the 100% commission model based on the 50/50 national average.  

Let’s pretend that the commissions totaled $20,000 for the purpose of this example.  Brokers and agents will each receive $10,000 under the 50/50 split.  

In contrast, a 100% commission model pays out the entire $20,000 commission to the agent.

The agent will make $8,000 in profits if he or she pays $12,000 in-office fees for the year.  The greater the income of the 100% commission agent during a given year, the more commissions he or she earned.

There are several variations of the 100% commission model

The majority of real estate companies do not provide support services or office amenities.  A flat fee per transaction, or a lower monthly fee, is charged to the companies’ 100% commission agents.  An agent without a desk and without office privileges could be subject to a $100 monthly fee.  

If you’re looking for an alternative to paying a monthly fee, you can charge a flat fee (like $750) for each sale that generates a commission.  

If the 100% commission agent in the example above who pays only a small fee on an annual basis ($1,200) makes a profit of $18,800 on the $20,000 commission, then the agent makes a profit of $20,000.  In addition, there is the option to pay the broker a flat fee of $750, which would result in the agent making $19,250.

In conclusion

There has been a recent increase in the number of brokers that charge 100% commissions in the real estate industry.

It may be better for new agents to rely on traditional commission structures until they earn a steady stream of commissions.  Accordingly, the 100% commission model would make sense as the agent would be earning higher income as he/she would have paid annual commissions to a broker (or, per transaction commissions) and any additional commission he/she earns over those costs can be credited to higher income.