I invite you to run your brokerage split and profit numbers again.

People get confused when looking at running their numbers because we run conversions on appointments set by buyers versus sellers. I ask people that are getting started in the business, “Do you want to work with more sellers or buyers? What kind of price points? Which neighborhoods? How far do you want to be traveling?” All these things could equate to time saved and money made. 

Here’s a quick tip on running some quick numbers when you’re doing business planning, even for those agents looking at which brokerage they want to join: 

1. The brokerage’s split. Sometimes you have zero-fee brokerages who typically charge a flat cost that may or may not cap out. That’s when you need to go run your numbers on these splits. If your business is going to sell a certain number of units or bring in a certain amount of gross commission income, these are the numbers that you need to know. What are you truly going to be paying the broker?

For example, let’s say you’re working with a no-split brokerage. Let’s say they’re charging $450 per transaction. If you were to sell 50 transactions, that comes out to $22,500. If you start selling over 50 homes, no-split brokerages aren’t the way to go. They make sense to begin with, but as you grow, you’ll be costing yourself tens of thousands of dollars.

“All these things could equate to time saved and money made.”

2. Your profit. Look at your profit numbers, and make sure that your business plan steers you toward the most profit of both money and time. When you start putting in your expenses, look at those two numbers. When you are running your business, look for the brokerages that give you tools and support, but keep your profit in mind. If a low-cost brokerage doesn’t give you a lot of support and tools, despite costing the same, switch over. Eventually, you’ll also save money as you start climbing through these 40 to 50 transaction ranges.

If you have any questions about today’s topic or other real estate matters, please feel free to reach out to me at (803) 567-9836 or jacob@barnhillteam.com. Have a great day.

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