In today's real estate market, many agents are focused on commission splits. Some brokerages offer high splits like 80/20 or even 100%. It sounds great, but is that really where success lies? For agents in and around Philadelphia, including Montgomery, Bucks, Delaware, and Chester Counties, let’s take a closer look.
The Problem: Chasing High Splits Isn’t Enough
Many real estate agents are drawn to the idea of keeping a higher percentage of their commissions. But focusing only on the split percentage can be misleading. Why? Well, a higher split often comes with fewer resources, less training, and no lead generation.
For example, an agent with a 90% split might close three deals a year. Meanwhile, an agent with a lower split could close ten deals with more support and resources. So it becomes a vital question: Would you rather keep 90% of three deals or 70% of ten?
The Agitation: Real Costs and Support Make a Big Difference
Let’s dive into why the split percentage isn’t the whole picture:
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Net Income Matters Most – After splits, fees, and expenses, what really matters is how much you actually keep. An agent could keep 90% of $100,000 in commission but have no support, ending up with $90,000. Another could keep 70% of $300,000 in commission, with plenty of support, ending up with $210,000. Which would you choose?
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Support Drives Growth – Brokerages that offer training, marketing tools, and system support lead to more deals. Though the split might seem lower, agents often earn more because they can close more sales.
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Think Like a Business Owner – Successful agents act like CEOs. They focus on growth, consistency, and volume. They realize that volume, not merely high splits, is where wealth builds.
The Solution: Focusing on Long-Term Wealth
Now, how can agents truly grow their business and income?
1. Evaluate Net Income, Not Just Splits
When considering a brokerage, look beyond the splits:
- Calculate your net income after all fees and expenses.
- Compare how much business you can do with the support provided.
2. Seek Strong Support and Training
- Choose a brokerage that offers robust training to improve skills and grow your volume.
- Ensure they provide marketing resources, lead generation, and administrative help.
3. Think in Terms of Volume and Consistency
- Focus on increasing the number of deals you close each year.
- Maintain a consistent growth strategy—this builds real wealth.
Setting the Right Path: Support and Consistent Business
Think about real estate as a long-term business. Agents need volume and consistent growth, not just immediate high commissions. By putting support and training first, agents can transform their careers:
- Aim for a balanced approach between split and support.
- Recognize that in the right environment, you can grow your business and income significantly.
Conclusion: Let’s Grow Together
So, for agents in Philadelphia and the surrounding areas, it’s time to see the whole picture. Grow your business with the right tools, support, and volume. Remember, success is more than a high commission split—it's about creating a consistent and profitable business.
If you're interested in focusing more on growing your bottom line and net income, feel free to request a call to connect. Let’s see how we can make your business thrive.
This content is for informational purposes only. Please consult your tax or legal advisor for personalized advice.
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