Diagramming Your Commission

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  • How many commission structures do you have?

  • Do you take a variable commission?

  • Do you charge mentor fees?

    • When?

  • Referral fees? 

    • At the deal level or later?

  • Do you offer graduated splits?

  • Do you take a team leader fee?

    • When?

  • How much is the split between members?

    • When?

  • Does the company take a % or flat fee?

    • When?

  • Do you have a cap?

    • What is it based on? E.g. sales price, count of deals, company split, sales entity split

    • When do they reset? E.g. Jan 1, or an Anniversary date?

  • Do you offer bonuses?

    • When?

    • Is this % or flat?

  • What is your closing process?

  • Are fees paid at escrow or through the brokerage?

  • From who is each fee being taken?

  • Do you have examples of:

    • DA

    • Commission Statements

    • Commission Calculation Spreadsheets?

  • Important: What are the exceptions to your compensation structures? 

    • What are the specific instances per agent?

  • Do agents work as teams?

    • What is team compensation?

    • Is check written to the team or to individual entities? 

    • How does the team split contribute to individual caps?

  1. Reference a disbursement document for a simple commission payment to jog your memory.

  2. Start with the beginning, and end pieces drawn, left to right on a piece of paper (or online application if you prefer).

  3. Remember that this is just a draft, on paper, it will be rough and that’s OK.

  4. Uses arrows and boxes to add the fees and cuts step by step, labeling as you move from right to left.

  5. Consider whether any other fees apply and to which part of the process. Section off those special situations by circling those fees and splits.

  6. Let the diagram sit for awhile, before reviewing it again.

  7. Redraw the diagram in a neater version.

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