How to Motivate and Compensate Your Agents Using the Agent Income Calculator


One of my consulting clients put together an Agent Income Calculator spreadsheet based on my compensation structure. I like the visual of these.

Buyer Agent Compensation

Basically, we have four tiers in our comp structure and everywhere there is a highlighted area here so you can see the average price, average commission, the Agent converted versus scrubbed tier, and a "gimme" is when my best friend goes to buy a home.

You may say, "Well our team is running about 15% for 5 deals, 45% of your business would be team lead agent converted, and maybe get 11 deals from the team and a handful of gimme opportunities."

Running these numbers does not include transaction fees, we pay our agents on transaction fees. That's $113,000 to our agents, and 36 is sort of a joke. It's not that really hard to do 36 on our team because we are always top-loaded.

One of our agents put 20 homes under contract in May and over 90% were team generated leads. It's not like he brings business to the team; he just follows through on business brought to him. That's buyer agent comp. There is a listing agent comp tab as well.

Listing Agent Compensation

We have 2 tiers on our listing agent, 25% and 35%. If you're going to use this, I'd take out 10% off the top on all of our commission checks. In this formula, if you're not taking 10% of the top, you'll have to get rid of the .9 if you don't take anything off the top. If you take 6% off the top, you'll put .94.

The next things is what we actually do with our agent. Schedule C of our position agreement has a written sales goal affirmation we have our agents sign saying how much you want to earn, want to work, hours per day, weeks of vacation, percentage of transactions on buyers/sellers side, what percentage of those buyers actually have a home, etc.

So if the sales goal affirmation says to gross 150k, it boils down to $75 per hour. On average, I'll have a gross commission of $7500, closing 44.4 transactions, as well as 99 buyer presentations. I am willing to commit to achieve these goals.

Establishing a stake in the ground when they sign their position agreement on an annual basis is a mindset thing. They are saying they can achieve these goals they set down. That's a pretty cool tool. It's in Excel, and it's called agent goals and comp affirmation.

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