How does the 100% commission work for a broker sponsor?

There are various ways 100% commission works for a broker sponsorship. The basic premise is that you pay reoccurring dues, usually monthly, but it can be quarterly or annually, and then often times there is a small transaction fee. The commission can be paid directly to the agent in residential sales from the title company with a commission disbursement authorization (CDA). However, with apartment locating, you are doing business under a LLC brokerage, and the payment is sent most often to the brokerage and then disbursed to the agent.

Remax, Keller Williams, and other large brokerage firms are franchises and you will not be able to get this type of broker split from them. The broker who is franchised has to pay a monthly franchise fee back to the parent company (here is a list of them), and they typically are required to have a brick and mortar location. These costs are passed down to the agents. In contrast, the 100% commission brokerages are not franchises and you are working directly for the broker who does not have any franchise fees. Some may offer office space at your request, but there would be a cost associated, but overall you are putting a lot more money in your pocket from your sales.

The dues can range from a annual flat fee to monthly dues well over $100. However, much the dues are what the brokerage needs to cover their costs in some way. So a lower flat fee may be accompanied with a higher transaction fee, and vice versa. Even though the independent broker doesn’t have to pay a franchise fee, they still have some overhead, and this overhead is passed on to the agents. Insurance, licensing, management, and other services are covered by your regular payments to the brokerage.

The good and the bad of it is that as an agent you have unrestricted income potential with higher splits and no oversight, but the brokerage will earn income whether you do or not. You may be your own boss, but your income rests solely on you, so if you do not have the work ethic then your earning potential is not very high. It can be a very lucrative model for someone aspiring to be their own boss with a stream of leads and a strong work ethic.

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