a commission negotiation between 2 women

Alternatives to the Traditional Split Fee Commission Model in Real Estate

It’s almost a given that a real estate agent will work at several different brokerages during their career. In fact, the median tenure for agents with their current brokerage is just four years. But, whether you’re a new or seasoned agent looking for a brokerage where you can hang your hat, or you’re simply trying to renegotiate your commission with your current brokerage, there are some important, money-related questions you’ll need to ask your broker. 

Getting Creative with Commissions

The real estate landscape has shifted considerably over the past few years, and so has the myriad of commission structures available to agents. The traditional split model—in which the agents simply splits the transaction side commission with the broker according to a fixed percentage—is still utilized by many brokerages, but we’re seeing new alternatives pop up. 

Let’s look at some of the newer and common structures outside of straight splits: 

#1. The Desk Fee Model 

Agents on a desk fee model often see a high commission split but are charged additional fees based upon whether the agent maintains a desk in the office, uses a community workstation or works from home. Typical fees can include fixed monthly fees for technology, marketing, and admin help; desk rental fees; and (if the brokerage is part of a franchise) a franchise fee. 

#2. The Cap Model 

Under a cap program, each office sets a number that the agent must reach before they get a high split. For example: if an agent’s previous year’s gross is $100,000 they might have an 80-20 split until they reach a pre-determined cap. If the agent’s gross is $50,000 to $100,000, they may start on a 70-30 split until they reach a pre-determined cap. Once an agent hits their cap, they may receive an even higher split for the remainder of the year. 

#3. The Transactional Fee Model 

With a transactional fee model, agents can expect to pay a certain amount for each of their closed deals. If the brokerage is part of a franchise, a franchise fee could also be applied, in a per-transaction way (rather than a percentage). Of course, agents could also have other fees like advertising, insurance, technology, etc. 

#4. The Salaried Employee Model

Some newer brokerages are testing out an employee-based model where agents are not contractors working on a commission at all. Instead, they are salaried employees who may receive a commission or bonus based on sales. 

Which Model is Right for You?

If you are considering changes brokerages, perhaps the most important step is to interview managing brokers to ensure you’re aware of their commission structure. 

Here are a few questions to ask: 

  • What is your most common commission structure? Can this be changed over time? 
  • Do you charge any additional fees? (franchise, technology, advertising, etc.) 
  • Will I be competing with the managing broker for leads and business?  
  • What kind of training is provided to me? How is it paid for?
  • How does the company provide lead generation? (At what cost?) 
  • What kind of marketing does the brokerage do for agents and listings? (What marketing expenses can I anticipate?) 

Of course, finding the model that’s best for you will depend on a number of factors. Often, top producers and top teams find the cap and desk fee models especially attractive, since the fees become a smaller percentage overall as their gross commission income (GCI) increases. If you’re doing a large volume of transactions for a relatively low sales price, the transaction model is not a good choice — and vice versa.

To learn more, sign up for our AgentEDU course The Best Real Estate Company to Work For today. 


AgentEDU® is a platform where agents at every level can come to watch 10-minute video courses for the many situations that successful agents must master. From essential to advanced level and everything in between, AgentEDU® courses help agents become top producers with increased earnings and a plan for continued growth. For a 7-day free trial sign up here.

AgentEDU® is an Agent Publishing brand. For nearly two decades, Agent Publishing has been committed to providing residential real estate professionals with the information and training required to build successful and meaningful careers in their local markets. Agent Publishing’s influence extends to every career stage and reaches agents across print, digital, events and online learning.

team conference

4 Reasons Why Real Estate Teams Fail

Starting a real estate team isn’t an easy task for the team leader. Here we run through the four most common reasons real estate teams fail, so you can avoid these mistakes as you build a successful team.

Don’t let these four mistakes derail your real estate team’s success.

#1. Poor Recruiting Planning

Hiring agents without a long-term recruiting plan can lead to quick turnover and ultimately hinder your team’s growth. Your recruitment systems should be based on where you see your business in ten years, and how you will encourage agents to achieve the levels of success that you envision.

#2. Hiring for the Wrong Reasons

Just because you have a good feeling about a someone, does not mean they are the right person for the position you are looking to fill. While you may have a gut feeling about someone, it’s always a smart idea to utilize a personality assessment tool, such as the DISC behavioral assessment, when meeting with potential new team members. By identifying the candidate’s personality profile you can determine whether they have the right personality to succeed in the role. Remember, you aren’t looking to hire someone with the same skills you already bring to the table – you want people on your team with complementary skills and traits.

#3. Insufficient Training

Continued training and support is critical to the success of your team. When a team has insufficient training, team members lose sight of expectations, priorities and goals. This can lead to a decrease in quality of work and drag on the team’s success. Whether you’ve hired a rookie agent or a seasoned professional, ongoing training is necessary in an industry that is constantly changing.

#4. Micromanagement

Team leaders tend to have type-A personalities, which often tend to to micromanage and develop overwhelming workloads, which can lead to an unhappy team. The point of hiring team members is to alleviate the workload on a team leader, but many times leaders have difficulty delegating tasks out of fear that someone else won’t do the job correctly. It’s important to keep in mind that your staff specializes in certain areas, and by giving up control you allow them to do their job so you can devote all your attention to yours.

Running a Team is Hard

Forming an effective team involves many moving parts and often requires more up-front planning than originally expected. So, remember to be kind to yourself as you go. There will be challenges along the way, but you can handle them and you will improve over time. No one “just knows” how to start or run a team. It’s a muscle that gets stronger over time. Even veteran team leaders can find areas for improvement.

The reward growing a team the right way is that it will multiply your results and earnings dramatically. At AgentEDU® we have an entire learning track on Team Building that breaks down its different aspects. Check out this track – as well as the nine others – that we have on our platform. 

AgentEDU® is a platform where real estate agents at every level can come to watch 10-minute video courses for the many situations they must master. From essential to advanced level and everything in between, AgentEDU® courses help agents become top producers with increased earnings and a plan for continued growth. For a 7-day free trial sign up here.

AgentEDU® is an Agent Publishing brand. For nearly two decades, Agent Publishing has been committed to providing residential real estate professionals with the information and training required to build successful and meaningful careers in their local markets. Agent Publishing’s influence extends to every career stage and reaches agents across print, digital, events and online learning.