Why do people become real estate brokers if not for the incredible opportunity to make a lot of money in a single transaction? Of course there are other reasons too; it can offer a flexible schedule, some live for the thrill of the sell, and, particularly in New York, some may enjoy the chance to network with celebrities and the socialites Yet, few would argue that money is the draw, and the ability to keep more of what they sell is always alluring.
Most brokers only see a small percentage of their commission, and few are aware that they can actually keep 100 percent of it if they knew the secret.
Under the traditional real estate broker commission model, broker’s commissions are generally preset, and once a real estate transaction is completed, the commission paid by the seller is divided between the broker and the brokerage, and the broker’s portion is further divided by various fees and expenses tied into the brokerage’s agreement, such as advertising, office space and supplies and even other associate’s fees. The broker does 100% of the legwork, but the broker generally gets less than 50% of the commission.
Why split your commission? After all of the time invested in training courses and licensing exams and finding the right market to work in, wouldn’t a broker rather keep virtually 100% of the commission they’ve worked so hard for? There is a method where Smart Brokers simply pay a set monthly fee of $99 and a small fee (never more than $2000) based on the value of the transaction, leaving them just about 100% of the commission.
It’s really very simple. The broker does the work, and the broker keeps the money.
Rutenberg Explains The Benefit of the Full Commission Model
Let’s face it; brokers are working harder, the competition is working harder, and the traditional commission model takes more than half of their hard earned money out of their pockets.
Brokers are faced with several options, but they all boil down to working harder to either earn the same amount of money that they currently earn, or worse, earning less.
That’s where the unique structure of a brokerage such as Rutenberg’s model comes in to play. The broker-centric model is a proven success, with Rutenberg becoming the sixth largest real estate broker (by number of agents) in New York City.
Under this broker centric model, “Smart Brokers” work as their own CEOs and exert more control over their own marketing and advertising techniques and budgets. Unlike in a traditional brokerage where newer brokers earn far less than experienced agents, and don’t have access to higher value listings, all Rutenberg brokers work on the same level playing field, and can devote as much time to their potential clients as they choose. They can sell one $30 million apartment a year and live off the $180,000 of a 6% commission and be perfectly happy, or they can continue selling all year round. Who else has that flexibility?
This method is perfect for a stay at home mom or dad, and for the devoted fulltime broker as well. You earn what you want, when you want.
CHANGING MARKET CONDITIONS
New York City rents jumped this year by 3.3%, with a vacancy rate of less than 2%. At the same time, buyers and renters are getting savvier, while technology and the internet continue to make inroads. This is making it harder for brokers, since the pool of available properties is smaller and the pool of renters and buyers keeps getting larger.
How does an agent position themselves to be significantly more attractive to sellers, buyers and renters and rent or sell properties faster?
The answer is simple: Motivated Brokers Keeping the Total Sale Price Commission
That’s it. There are no hidden charges and there are no additional fees or splits. With this 100% commission model, brokers at firms such as Rutenberg can know that they make the full value of the commission paid. It provides a level of comfort and security while they pursue the sale.
The more motivated the broker is, the more attractive the property is to a potential seller or renter. The more attractive the broker is to a seller or renter, the more clients the broker will have. The more clients a broker has, the more deals a broker can make. The more deals a broker can make, the more money a broker will make.
There are over 10,000 licensed real estate brokers in New York City. The competition is fierce. The best way for a broker to stand out is to have knowledge that no one else will take what they earn. Sellers want to make as much on their sale as they can, and the best way for an agent to secure more and better commissions is to be motivated and secure.
Full commission payouts are especially attractive under the broker centric system, because the fees are known in advance – no surprises from the brrokerage. Brokers will earn as much as they can, knowing full well what their costs to the brokerage agency will be, plus they know that the legwork they put in is almost exclusively to their benefit.
It’s simple. Total commission rates equal higher sales and higher earnings. Increase your income. The Rutenberg model is the Smart Broker model.