The Benefits of a 100% Commission Real Estate Brokerage Model

If you are a real estate agent looking for a brokerage that offers you the flexibility to keep more of your commission, a 100% commission brokerage might be the right fit for you. In this type of brokerage, agents keep the entire commission earned from a transaction, minus a fixed fee or percentage paid to the brokerage.

The traditional brokerage model, on the other hand, typically takes a percentage of the commission earned by the agent, leaving them with a smaller share of the earnings. This percentage can range from 50% to 70% depending on the brokerage.

In a 100% commission brokerage model, agents are responsible for their own expenses such as marketing, office space, and technology. In return, they receive the entire commission earned from a transaction, minus a fixed fee which is usually lower than the percentage taken by traditional brokerages.

Experienced agents who can generate their own leads and close deals without relying on the brokerage’s support services may find 100% commission brokerages more attractive. However, newer agents who require more support and guidance may not benefit as much from this model.

It’s essential to note that different 100% commission brokerages have varying structures and fees. Therefore, agents should review and compare the options available to determine which brokerage model best suits their needs.

In conclusion, a 100% commission brokerage offers agents the potential to keep more of their hard-earned commissions. As an agent, it is crucial to understand the pros and cons of different brokerage models and choose the one that aligns with your business goals and needs.

CLICK HERE to view our 100% commission model

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What is 100% Commission Real Estate?

What is hundred percent commission real estate?

(Transcription) This concept was popularized and entered the mainstream over ten years ago and since then it’s evolved and has changed somewhat. Before 100 percent commission was part of the mainstream program that an agent could get a real estate company. The big talk was about splits, so an agent, let’s say a new agen,t would join a company and they would get 50% and then the company would get 50%, so that would be a 50/50 split. As the agent progressed, they might get 60% or 70%. Companies would recruit agents based on an 80/20 split or 90/10 split and then hundred percent commission entered the mainstream and said here’s a flat fee per transaction and you keep the rest of the commission we don’t care how much the Commission is you just pay a low flat fee. There was also another version of that where the flat fee could have been an annual fee so an agent would pay a fee of let’s say three thousand dollars at the beginning of the year and then the agent would keep the Commission that they earn 100% of the Commission they earn on all the transactions they closed that year. Over time I think that this concept has kind of evolved and changed and companies have looked to find ways to increase revenue and still be within that hundred percent commission model. What that term encompasses now are companies that often charge a monthly fee, so there might be a monthly fee in addition to the transaction fee. Often these companies will charge for errors omissions insurance you know so there might be a risk management fee on each transaction or the agent might have to pay quarterly or semi-annually for their insurance, there might be fees for high-risk transactions or a fee for having access to the office or having a key, basically there are other fees. So if you’re looking at a hundred percent commission brokerages, it’s important that you clarify any and all fees that you could infer working at that office. With Balboa Real Estate over the years, we’ve experimented with hundred percent commission programs to find what would be the best, the least expensive to agents so agents can save more of the commission that they make and of course the company can stay profitable, we have done a flat fee per transaction and we’ve done the annual fee where agents pay the annual fee, and and then get a hundred percent of what they earn, and we’ve always paid errors emissions on behalf of the agent. We’ve never had agents have to pay theirs separately. So we we found that in certain situations where the sales price was very high our E&O; bill would go up because it was how the insurance was assessed, based on the revenue commission, revenue of a transaction. We had agents that were closing three, four, five million dollar properties and making these commissions that go along with it that would increase our E&O bill and we were still charging a very low flat fee. Which would essentially make the company take a loss on those transactions so certainly we can’t stay in business taking a loss on those transactions, but we want to be the lowest cost one hundred percent commission company so we camp with a plan that we implemented over a year ago, that’s been working quite well. Our commission plan is a flat fee per transaction that is ten basis points of the sales price. So the easy math on that is if the sales price is seven hundred thousand dollars, then the flat fee per transaction is seven hundred dollars to the brokerage and the agent will keep everything else. If the sales price is eight hundred thousand then the flat fee to the brokerage is eight hundred dollars. Again, the agent keeps everything else, Balbo real estate pays the errors and omissions insurance for the agents. There are no other fees involved, just a simple flat fee per transaction to keep it very easy to understand and low cost as well. then of course if you have a very high sales price it allows the flat fee to the company to go up just enough to cover the E&O insurance on the agents behalf. If you’re interested in our Commission model, what we believe to be the best hundred percent commission model in the industry, please CLICK HERE

 

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Does the Name of Your 100% Commission Real Estate Brokerage Matter?

Real Estate agents spend a lot of time comparing commission models, office amenities, and company policy when they consider joining a brokerage. Equally important is the name of the brokerage. Consumers have access to nearly all the data, so it is incumbent for agents to prove their value. Agents prove their value by building trust and credibility with their prospects. This brings us back to the company name. If you are a well-established agent, and your name is already very recognizable, then the name of your real estate brokerage takes a backseat your name. However, that is very rare, some tiny percentage of agents, much less than 1%. For the rest of us, the question will come up with clients, “what brokerage are you with?” These prospective clients are sniffing around. They want to know about your support system and if they are reputable.

So, you can choose a reputable name, like Keller Williams and be done with this, right? Yes, but you also are factoring in what the brokerage will charge you when you close a transaction. Let’s say you want to save the most commission for yourself, so you look at 100% commission model brokerages. This is a different segment of the brokerage world. Again, you will have to look at a list of companies, what they offer, and, of course, the name.  So, Balboa Real Estate fits the bill as a 100% commission brokerage, and we don’t charge monthly fees. We are partial to our name because rather than something generic, like “First Home Realty,” or something abstract like, “Cyber Broker.” The name Balboa is a California icon. In each county of California it has different geographic landmarks and meaning, it sounds familiar.

Agents often call our office because they heard we offer a 100% commission program and they like our name. That is the conversation starter. Agents join our company because our reputation gives agents the credibility they need to win over clients. Agents stay at Balboa because we offer great support and take care of them.

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Is a monthly brokerage fee worth it?

In some real estate offices agents have to pay a monthly brokerage fee. Not every realty brokerage charges a monthly fee to its agents. For example, Balboa Real Estate does not charge its agents a monthly fee. Now, even though we don’t charge a monthly fee, we aren’t universally opposed the concept of charging a fee in certain circumstances. Some real estate agents like to hang around an office. If you like to go down to an office, and jump on the company wifi with your laptop, as you drink a Keurig coffee, sitting in an auxillary desk, under an AC vent, as your print out an email, then a monthly real estate brokerage fee is indeed intended just for you. Also, you should happily pay it, because all the overhead created by the office ammenties you like to utlilize cost the company money.

Real estate brokerages that offer the “100% commission” model have a thin profit margin, so they must be careful when budgeting. The understanding is that the monthly fee is in place to help cover the overhead, ideally a break even. All the charges to an agent’s commission should be added revenue, to pay salaries and such. Balboa Real Estate offers 100% commission, a low flat fee per transaction, but no office to hang around. The reason is that we did have an office – for years- and it was barely utilized. Why was our big beautiful office not utilized? The answer is that it’s more convenient for agent to meet the sellers at the listings, buyers at the prospective properties, and conduct research/paperwork from their computer than to drive out of the way to our office. Agents that keep busy and focused know this, and many see no point in paying a monthly fee for an amenities that they do not use. Agents like this come to Balboa Real Estate for 100% commission, our broker supervision, and not our office.

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Do Real Estate Agents Need an Office?

The question arises from agents, “do you have an office?” This is an important question because a big difference between many tradiitonal brokerages and 100% commission brokerages is access to an office. In order to answer, it’s only fair that we give some background information. When proespective agents would call or visit the office to inquire about Balboa Real Estate, the answer to the question whether there was an office to use was an unequivocable “yes!”  Agents were mostly concerned if a prospective client wants to meet then where could they host a meeting. For years, our company had professionals offices and a conference room with company signage and nice furnture, basically everything that an agent would need in a professional office. All this was set up for our agent and then….nothing. By nothing I mean agents never used the office. I shoudn’t say never, because once every 3 or 4 months the conference room was used and maybe an agent would use an auxiliary computer to print something on occasion.

We realized that agents meet sellers at their home, the home the agent would list. Agents would meet buyers at the properties they were interetested in viewing. If an agent needed to to talk to a client somewhere other than the propsective listing or purchase properties, they would meet at the most close and convenient coffee shop. I was told there was no reason for an agent and their client to drive several miles out of their way to meet at an arbitrary location.

When agents need to create a listing agreement it is created online, then either sent through Docusign or a PDF is emailed. The client will sign online or print/sign/scan back to the agent. The same process is used for purchases. It seemed that since the paperwork was done online, there was no point in going to an office to print and fill out paperwork. The concept of the office has changed drastically. At this time our office had over 100 agents, did hundreds of transactions a year, yet the office was always quiet with very few visitors.

As most real estate tools are web-based, and agents can easily have a printer and scanner at home to use as needed, there is no reason to go into the office. In fact, a case can be made that it is less time effcient to run to the office for a few tasks, than to do then from your home office. It’s also inconvenient to request your clients to drive over to your office for paperwork or a discussion. Clients are better served at the home they are listing or interested in buying.

There is one last factor to consider, and that is commission. If an agent doesn’t need a brick-and-mortar office to consistenly go to, then they will keep more commission. 100% commission real estate companies that have limited office recources for agents allow agents to keep far more of their commission than tradition companies. If an agent can save thousands of dollars on a transaction at a 100% brokerage, then is it worth it to invest some of this money in home office? We say yes.

If you are interested in finding out what Balboa Real Estate has to offer. please CLICK HERE

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How To Keep 100% of Your Real Estate Commission

The phrase “100% Commission Real Estate Brokerage” has been a popular trope for about 10 years. 100% Commission has taken on the meaning of a low-cost brokerage, typically where a licensee pays a small flat fee to the broker and keeps the rest of the commission. There are variations, but this the general idea.

It can be argued, from a purist standpoint, that 100% commission isn’t truly 100% commission because if a licensee has to give even $1 to the brokerage then it’s not a true 100%. While the term may not be a full 100% to the purist, it is very close to 100% and still far better than tradition brokerage splits.

However, there is a caveat to all this. A clever licensee can structure a transaction to where they keep the full 100% commission and not a penny less. I will show you two ways to make the broker fee a pass-through cost to the client so that they pay the broker fee rather than the licensee.

The first is on a listing agreement, when the licensee is a listing agent. Since there are variations of the transaction fee paid to the broker, we will use $500 as an arbitrary number for our example. Paragraph 3 of the listing agreement is where the licensee will put the listing fee percentage that is being charged. After the space for listing percentage there is the word “AND” with another blank space (see image below). In that space the licensee will put the amount of their broker fee. In the case of $500 the licensee can write something like “$500 broker processing fee” or “$500 brokerage administration fee.” This will cover the licensee’s transaction fee and allow the licensee to truly keep 100% commission.

100% commission real estate brokerage

The other way to truly keep 100% of the real estate commission is with the purchase agreement. Paragraph 7  is the allocation of fees. Section D, lines 8 and 9 are generic blank lines where the licensee can check a box for the seller or buyer and then write in a fee. In the case that the licensee is representing a buyer they can write check the buyer box on line 8 and then write $500 “processing” or “administration fee” to Balboa Real Estate.

This will ensure the buyer pays the licensee’s broker fee thereby allowing the broker to keep 100% of the commission.

If you want to learn more about a 100% commission real estate broker that services all of California then please contact us at info@balboateam.com

 

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The Best 100% Commission Real Estate Plan

With so many different 100% real estate brokerages in California,  agents often wonder which company has the best plan? It’s been our goal at BalboaReal Estate to create a flat-fee-per-transaction-inspired commission model that allows full-service real estate agents to pocket as much commission as possible. Our company started in 2011, and in that short time we have tested just about every low-cost commission option for real estate agent. The goal was that despite agents keeping more money, there would be no compromise on the service. On the contrary, the expectation is that our 100% commission plan is a reward only available to deserving agents that offer excellent service to their clients. In turn, we offer excellent broker support to Balboa Real Estate agents.

As mentioned before, 100% commission is not all the same. Basically every company has their own take on what that is. Many companies charge a monthly fee; we do not. In fact we don’t charge any sort of application fee, initiation fee, risk management fee, E&O fee, desk fee, franchise fee, or other fee. We just charge one simple flat fee per transaction. This begs the question: what is Balboa Real Estate’s flat fee per transaction? The answer is simple: 10 basis points of the sales price. Written another way, it is 1/10th of 1%. This means that if the sales price of a property is $500,000 then the broker fee is $500, that’s it, no other fees. Another example would be if the sales price is $800,000 then the broker fee is $800. You can multiply .001 times the sales price to find the broker fee. The licensee keeps the rest.

Real estate agents mught ask if this is the best 100% commission brokerage program. Our answer is unequivocally yes. An agent typically earns 2.5% of the sales price as the gross commission when it’s all said and done. This means that 2.4% goes to the agent. If the agent earns 3% then 2.9% goes to the agent. Some times agents will ask about transactions with the sales prices in the seven-figures. They notice that the higher the sales price the higher the broker fee. This is correct, however, it’s commensurates with how much an agent is earning too. If a licensee sells a home for $2,000,000 then the broker fee is $2000 while the licensee keeps $48,000 in a 2.5% commission scenario, or $58,000 in a 3% commission scenario. We sell a fair amount of homes in the seven-figure range and our overhead does increase with larger transactions. This is why we feel the “basis points” model is fair for the company and generous for the licensee. If you have any questions about this program please email admin@balboateam.com or CLICK HERE

 

 

 

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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.

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