Posts

Is there really such a thing as a 100% commission real estate brokerage?

Is the term 100% commission real estate brokerage accurate or a misnomer for low-cost brokerages? By now 100% commission real estate brokerages have been around long enough to represent a considerable slice of the the real estate brokerage world.  Many real estate agents know that there are brokerages that charge less than the traditional broker-agent split. Some of these 100% commission brokerages charge a flat fee per transaction with a monthly fee or without a monthly fee. Some brokerages charge a flat annual fee and the licensee keeps every penny of the commission they charge. Many charge licensees separately for  errors and omissions insurance. The point is that this isn’t exactly a 100% commission in the literal sense of the word.  If a brokerage charges a flat fee per transaction, even a very small flat fee, then the licensee isn’t getting 100% commission, right?  Maybe they are getting 99%, which still isn’t 100%. Therefore the term 100% commission encompasses a variety realty brokerages with a structure of very low-cost brokerage fees for the real estate licensee.

 

Now, it should be noted, that this is simply an analysis of what 100% commission real estate has grown to mean. The variety of 100% real estate companies are still vastly better that their traditional counterparts. Many traditional companies charge a substantial percentage of a licensee’s commission that is way more than any 100% commissional estate brokerage. As recent as 10 years ago from the date of this post, the industry was still overwhelming using the traditional model in which brokers took 20%-50% of a real estate agent’s commission. This was justified because agents got to use the office, copy machine, fax machine, and all sorts of “brick-and-mortar” tools. Technology has made most of this obsolete. Realty documents are rarely printed, most of the transaction is done online through email, using Docusign or scanned PDFs. In-person meetings are held at the home of the listing appointment or at properties being viewed by the buyer. The days of bringing a buyer back to your office and having them sign a stack of papers so that you can fax an offer to a listing agent are gone. Agents that seek 100% commission real estate companies realize this and typically have no interest in paying the overhead for tools that they simply don’t need.