Let's Talk About Agent Commission Splits

Forsyth Real Estate vs other real estate agencies

Real estate agencies are unusual in the business marketplace, in that they often have extremely complex commission and payment models.  Real estate is different from other sales-based models because real estates agents not only make the sales, they also sign up the listings – so they also “source” the product, as it were.  For successful agents considering moving agencies, it’s therefore often difficult to weigh up where their sale efforts will bring them the best financial returns – and where they feel they will be most appropriately rewarded for their input to the business.

There are a number of existing agency business models in the marketplace, depending on whether agencies are independents, franchises or part of a group, and what percentage of external fees they expect to be contributed by the agents themselves.  Some agencies have a sliding scale of percentage-based commission, depending on whether agents bring in the listing or simply sell a listing that’s come into the company due to corporate marketing.  Often, the rules relating to these commission splits are unclear, and can lead to issues within the agency and, in the end, agents missing out on fees which should belong to them.

The key question for an agent looking after their own best interests, is what’s the bottom line for me?  When comparing “my input vs the agency input” and “my commission vs the agency’s commission”, it’s important firstly to consider what the agency has to offer you.  In particular, does a well-known franchise or brand really bring in work (and income) for the agent or is the reality that agent have to generate their own leads to achieve listings?  The case seems to be that a well-known brand or franchise can contribute to sales leads, but it is the quality of the individual agent that gets those leads across the line.

So if you take the sales base line as being pretty much the same regardless of whether it’s an independent agency, a franchise or a group, what are differences in costs to the agent to gain the same agency benefit?  At Forsyth Real Estate, while we value our own brand, our reputation as a leader in the market, and our history as a family-owned company for over 100 years, we also value the individual input of the talents and sales skills of our agents.  Franchise or group affiliation fees can take a large chunk out of potential sales commission, which we believe is not only unfair, it also demotivates successful agents or upcoming agents who feel they’re not being remunerated in a way that reflects the value of their contribution to the company.

That’s why we believe that it’s important for agents to do their sums before committing to a new agency – and why we’re offering our sales agents the best commission splits in the business.

We also believe that paying our agents fairly for their achievements ensures that our clients get a better level of service.  If agents aren’t constantly pushing for quick turnover simply to make a fair salary, they can focus on achieving the top prices, not just the fastest sales.  Putting quality above quantity means that consumers get better service and ultimately a better deal – and this is a model that Forsyth is embracing.  We believe it’s important to enable our agents to offer customers more choices in how their properties are marketed – because they’re not pushing for a quick sale above all else – and make the consumer experience their priority.