Keller Williams Commission Structure and split explained. #kellerwilliams #kw #commission
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As a licensed real estate agent you choose a real estate brokerage to hang your real estate license. For sponsoring your real estate license, & resources, the real estate brokerage receives a percentage of your sales as a real estate agent & this is the commission split.
Each real estate brokerage has its own commission structure & split & traditional real estate brokerages are typically known for higher commission splits. The commission splits range widely with brokerages taking anywhere from 0% with flat fee model to 50% of commission, depending on the real estate brokerage. It doesn’t always make sense to go with the real estate brokerage that takes the least commission split. But since commission splits are important, I am going to break down the commission structure and slit of Keller Williams Real Estate Brokerage.
I learned about Keller Williams commission structure & how it innovated on the traditional real estate brokerage model & was a great commission structure for agents.
KW real estate has same framework no matter where the market. The commission split is 30% to the real estate office/brokerage & 70% to real estate agent. There is 6% real estate franchise fee to Keller Williams Realty Franchise. The 30% to the brokerage is used for maintaining the operations of the office & portion goes back to the real estate agents in form of profit share.
As a real estate agent you receive 64% of the commission with 36% going to the brokerage & franchise. If you have a $10,000 commission, you pay the brokerage 30% or $3,000, pay the franchise 6% or $600 & you have $6,400 as your commission.
The Keller Williams Commission Structure offers what is called a capping commission structure. The commission you pay both the KW real estate office & franchise has a limit, & once you hit the cap, you keep 100% of your commissions. The 6% real estate franchise fee is capped at $3,000 company-wide. The amount that you pay the independent Keller Williams varies market to market, & depends on median sales price of homes in your area & expenses of the real estate brokerage. The Keller Williams cap is higher in a New York real estate market, where real estate is more expensive & costs to operate a real estate brokerage are higher. The Keller Williams cap ranges from $18,000 to $25,000. A great thing about Keller Williams Realty is all real estate agents are treated equally when it comes to commission, whether you are a seasoned real estate agent of ten years or are brand new real estate agent.
Lets compare to a real estate agent from another real estate brokerage with a 36% commission real estate split, with no cap. Real Estate agent A works at KW with $20K cap & real estate agent B works at other real estate brokerage that also takes 36% but with no cap. Both realtors make $55K/year, both pay $19,800 & left w/ $$35,200. Both real estate agents next year make $150K. Real estate agent A is paying $20K & left with $130K while realtor B pays $54K & is left $96K.
If both real estate agents make $250,000 realtor A is paying $20K & left with $230,000, while real estate agent B is paying $90,000 in commission to be left with $160,000.
In a traditional real estate brokerage model, the more a real estate agent makes, the more they have to pay at a higher commission split. We had 2 real estate agents at same level, earning same commission, & Keller Williams real estate agent makes $70,000 more.
Even if Realtor B had a lower commission split of 20% w/ $250,000 a year, they still end up paying $30,000 more than the KW real estate agent.
This is the power of the Keller Williams Capping Commission Structure & why agents can make more money opposed to other real estate brokerages.
Keller Williams has a great commission structure, & there may be real estate brokerages that offer a lower split, choosing a real estate brokerage is a decision to take into account the value you receive from the brokerage compared to what you pay for. You need to look at the whole pie & see everything offered as opposed to just one factor. In real estate brokerages, there is no one size fits all, but KW is right for me & as a real estate brokerage they offer a lot.
In addition to having a generous commission structure Keller Williams agents also make money through KW Profit Share, & if you have any questions about Keller Williams Real Estate or if there is any way that I can help you, you can always email me.
8 янв 2023
