What is the Exit Realty commission split? And, how does it compare to other real estate brokerages? We’re going to […]
What is the Exit Realty commission split? And, how does it compare to other real estate brokerages?
We’re going to break down Exit realty’s commission structure, how it compares to other brokerages, and the unique earning opportunity that Exit realty offers.
Hopefully, this will help you make a smart, informed decision about which sponsoring brokerage is right for you.
Exit Realty Commission Split
Exit Realty offers a 70-30 commission split for agent production under $100,000 of gross commission income. Meaning, 30 percent of the first $100,000 will go to the broker and 70 percent goes to the agent.
Example: A home is sold for $200,000 at three percent commission, resulting in $6,000 in gross commission income. Currently, the agent has yet to reach $100,000 of gross commission income. Therefore, 30 percent, or $1,800, goes to the broker. The other 70 percent, or $4,200, goes to the agent.
Once an agent hits $100,000 in gross commission, the commission split changes to a 90-10 arrangement. In this case, the agent gets 90 percent and the brokerage gets 10 percent.
Take the previous example. Assume the agent who generated $6,000 in gross commission has earned over $100,000 already this year. The agent, therefore, gets $5,4000 and the brokerage gets $600.
It should be noted that if you’re able to earn more than $100,000 in gross commission income, then your average commission rate drops and moves from a 70-30 split to a 90-10 split.
Example: let’s say an agent does $200,000 in gross commission income. The first $100,000 will be a 70-30 split. The second $100,000 will be at a 90-10 split. That results in $40,000 to the brokerage and $160,000 going to the agent.
This averages out to an 80-20 split for this agent.
Average home values in your area and the commission rate will affect your ability to hit $100,000 in gross commission income.
Getting The Better Commission Split
Your area and average commission rate will affect your ability to get to the 90-10 split. However, let’s look at how possible it is for the average agent.
According to Zillow, the average home value is about $270,000. A report published by the National Association of Realtors says that the average agent does about 10 sales a year. That’s a total production of $2.7 million.
At a three percent commission rate, the average agent in the U.S. produces about $81,000 in gross commission income.
It seems, therefore, that you would need to be better than average. While, this is true. The statement holds true for nearly every brokerage when looking at averages.
Exit Realty Commission Split Vs Others
Take Coldwell Banker, for example, which typically offers a 60-40 or 70-30 split without any change in the commission split based on production.
When compared to a brokerage like, Coldwell Banker or Century 21, an agent is going to pay a higher commission split and still have to pay monthly desk fees. If you’re hoping to optimize your income, you may not find it at these companies.
A brokerage that is gaining popularity is eXp. This company offers an 80-20 split with a cap of $16,000. Meaning, you won’t pay more than $16,000 to the brokerage. After that, an agent will receive 100 percent of their commission minus some fees.
To hit this point, an agent will need to produce about $80,000 in production. If you’re an agent who is able to produce far more than $80,000 in gross commission, then eXp may be a good choice for you.
However, the average agent only produces about $81,000 in gross production. It’s important to note that this is only an average. It plays out much differently.
Exit Realty Fees
It’s not only commission structures that you have to consider. Some brokerages offer attractive commission splits, but charge their agents a large number of fees.
For example, at eXp you’re going to pay an $85 monthly fee. At Exit, there are no monthly fees and no desk fees. This is in direct contrast to a majority of real estate brokers out there. Exit is one of the very few to not have a monthly desk fee.
But, Exit isn’t without fees. There are a few that you will have to pay. Here they are:
- An annual membership fee of $325 to the franchise
- Transaction fees capped at $3,200 per year.
- Errors and omissions insurance fee (optional and not present at all Exit locations)
Here is a point to realize with any brokerage. Every real estate brokerage is a business. They rely on getting a certain amount of revenue from you in order to support their services they offer.
There is often a correlation between your commission split and the level of support at a brokerage.
While eXp or Keller-Williams seem to have better splits, they don’t offer near the support a brokerage like Exit Realty does.
When looking at commission splits, it’s important to ask yourself what level of support you need. You can have the best commission split in the world, but it doesn’t matter if it doesn’t help you get clients, sell homes, and avoid mistakes.
A 100 percent split model of zero production is still zero.
Opportunity For Residual Income
Exit Realty is unique because of its Exit Formula. The Exit Formula allows real estate agents to earn residual income on single-level sponsors, or people they introduce to Exit and who become agents.
It’s essentially a recruiting incentive for real estate agents and offers them a way to earn additional income. Agents can finally earn income from more than selling homes.
For each agent sponsored into the company, the sponsoring agent will receive a 10 percent bonus of the sponsored agent’s gross commission income, up to $10,000 per year. This amount is paid by Exit corporate as an incentive for recruiting and helping the company grow.
The bonus doesn’t come out of an agent’s commission. It comes from Exit Realty.
Theoretically, the Exit formula offers an agent an opportunity to earn more than their gross commission income.
More About Exit Sponsorship
You must be an active real estate agent to be eligible for a 10 percent residual. However, the company does offer 7 percent residual upon retirement and five percent ongoing residual to a beneficiary should you die.
There are no limits on the number of agents you can sponsor or the location. An agent in Michigan can sponsor an agent in California. An agent in Texas can sponsor an agent in New York.
This creates a massive opportunity for a real estate agent to earn more money. For agents who are at max personal production due to time limits, they can use the Exit formula for growing their income. That means they don’t have to build a real estate team or find a way to scale their company.
Become An Exit Realty Agent
We’ve helped real estate agents all over the country join the Exit Realty family and build additional revenue streams. Get connected with us and we can help you with your journey to joining an Exit Realty brokerage today.
Get started by sending us an email at realtor[@]dolinskigroup.com
As an enthusiast with a deep understanding of the real estate industry, I can confidently provide insights into the Exit Realty commission split and compare it to other real estate brokerages. My expertise is grounded in a comprehensive knowledge of various commission structures, industry averages, and the unique offerings of different brokerages.
Exit Realty operates on a commission split model that evolves based on an agent's gross commission income. For the initial phase under $100,000, the split is 70-30, with the agent receiving 70 percent, and the broker taking 30 percent. Once an agent crosses the $100,000 mark, the split transitions to a 90-10 arrangement, favoring the agent with 90 percent of the commission.
To illustrate, let's consider a scenario where a home is sold for $200,000 at a three percent commission. The gross commission income is $6,000. If the agent has not yet reached $100,000 in gross commission income, the split is 70-30, resulting in $4,200 for the agent and $1,800 for the broker. Once the agent surpasses $100,000, the split becomes 90-10.
Exit Realty's commission split can be advantageous for high-performing agents, especially considering the potential for an 80-20 average split if the agent consistently earns over $100,000 in gross commission income.
Comparing this to other brokerages, traditional players like Coldwell Banker typically offer a 60-40 or 70-30 split without adjustments based on production. In contrast, emerging options like eXp provide an 80-20 split with a cap of $16,000. This means that after reaching the cap, the agent retains 100 percent of their commission, excluding some fees.
Besides the commission split, fees play a crucial role in an agent's earnings. Exit Realty distinguishes itself by not charging monthly or desk fees, unlike many other real estate brokers. However, agents at Exit Realty do face an annual membership fee of $325, transaction fees capped at $3,200 per year, and an optional errors and omissions insurance fee.
It's essential to recognize that every brokerage operates as a business, and there is often a trade-off between commission splits and the level of support provided. While brokerages like eXp may offer better splits, Exit Realty prides itself on providing substantial support to its agents.
One unique aspect of Exit Realty is its Exit Formula, which allows agents to earn residual income by sponsoring new agents. This recruiting incentive offers a 10 percent bonus on the sponsored agent's gross commission income, up to $10,000 per year, providing an additional income stream beyond home sales.
In conclusion, the decision on the right sponsoring brokerage involves considering commission structures, fees, and the level of support needed. Exit Realty's commission split, combined with its unique Exit Formula for residual income, presents an intriguing opportunity for agents seeking a balance between financial rewards and support.
