B-SCHOOL COACHING CALL: How to Sell Your Agents on Lower Commission Splits

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"So what are your commission splits?" Invariably you will have to answer this question. I know a lot of you are hesitant to offer lower commission splits because you think you won't be able to compete with someone who's offering 70-80% commission splits. I address that issue in this short clip from my latest B-School Coaching Call.

Here's the key: Turn their attention away from splits, and aim to motivate them with what they're really seeking. If or when it comes up at the initial meeting, shift the focus to their needs, what they've been making in the recent past, and their desire to increase their net worth. Are they making more money than they've needed with the ability to invest the difference? Most agents have no concept around any of that, so you can easily talk through that with them.

Rather than conversations about splits at the first meeting, we focus on discussing things like, "What have you done in the past? How much have you made in your best year financially? If you've been in real estate, what did that look like for you? How many homes have you sold? What kind of expenses have you had? What have you tried? What's worked and what hasn't? What are you paying your current broker?"

We also show them the Agent Income Calculator you see in this video, presenting a tangible and measurable way of seeing what their income would be if they meet certain sales goals.

It's just math. It doesn't matter if you give 100% commission splits. The biggest broker in our market uses a transaction fee model with 100% splits. At around 800 agents, they do about 3700 sides per year. I tell agents, tongue in check, that if splits were the #1 determining factor of your ability to build wealth in real estate sales, that's the firm you'd want to be in.

There's no sales pitch, and we give them the honest truth about real estate and what really happens. We're offering agents the opportunity to make a 6 figure income in the first 12 months, with $60K guaranteed right off the bat. Less than 5% of agents in our market are making more than six figures take home, so I show that our agents consistently surpass that. 

For most people who are on our team, we've doubled their income by joining our team. Some are new to real estate, coming from a different industry, and some came from builders where they just weren't making the kind of money we offer. But we always provide value and opportunities they wouldn't have had otherwise.

So you just have to tell that story. Display your value, and show them the path to $100,000.

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