Do agents typically get compensation for recruiting new agents?

Question

Hi everyone, I just passed my NJ state exam yesterday!  I'm now looking for a brokerage to sponsor me, and I want to know if agents typically get compensation for recruiting new agents?  I'd like to know if they are incentivized to recruit me and tell me how amazing their brokerage is.

Chris Mason · Answer

Keller Williams is well known for  having an MLM-like model, yes.

For you the brand new real estate agent, I strongly suggest being focused on selling houses, not on recruiting. Most new Realtors fail within two years, something like 85% or 90% depending on who you ask. Stay focused and overcome that hurdle first.

Frank Wong · Answer

Hi Nam,

Most brokerage recruit and sell how great their brokerage is.  Some live up to the billing but most over promise underdeliver.  You want to focus on a company that has great training.  Look for companies that are reputable and have lots of top producers.  You want to learn off of them.  Don't worry so much about commission split in the beginning.  If you handle your business your split and income will go up.

Joel Owens · Answer

I have the opposite model. I don't want agents and turn them away...lol

Happy to keep on trucking along with my commercial real estate clients and doing transactions one by one as a principal broker.

I have friends that like to be babysitters with residential agents. Instead of selling property they make a few hundred k a year for themselves and stay on the golf course.  Commercial teams can also do very well but it is constant meetings with junior agents training them and talking about their deals etc.

Nothing wrong with that business model it's just not my jam. I just like closing deals I work on and doing my investments. I do not have to wonder what the agents are up to day to day and what they might have overlooked or messed up that they will tell me the last second about.

Don't expect any brokerage to make you successful. It starts and stops with what the broker and agent does themselves everyday to get better. Some places might have better tools but you still have to pick the tools up and use them.

Hopefully you are one of the 10% that makes it.

I think the residential principal brokers go to the add agents model because they get tired of selling volume and want to make money off of the newer agents and ramp down their time requirements. Residential is typically smaller number such as 3,000 to 10,000 a deal for most and then you split with the brokerage if you are not a principal broker so that is a lot of grinding.

What I love about my model is in commercial I can make six figures per deal so as an example I can do 4 deals a year and do very well. I do about 1 to 2 closings a month. These larger deals it varies.

Russell Brazil · Answer

Some brokerages have that business model such as EXP and KW. Others do not.

Account Closed · Answer

eXp Realty, LLC and Keller Williams both have revenue share models. Agents are compensated through revenue share intensives as they add additional agents to their down line.

Ola Dantis · Answer

Another thought: Some brokerages charge fees as well. So, make sure you hit the ground running so that you aren't saddled with fees and not selling. Sell, Sell, Sell is the name of the game!

Goodluck!

Marian Huish · Answer

Congratulations on passing your exam Nam, welcome to the world of real estate!    You are correct in that exp Realty does compensate Agents for helping to grow the company.    And while eXp is built off of the KW business model, the difference is the KW pays an incentive off of profit share, (that is, after all expenses for office overhead, etc.)  vs exp pays revenue share which is off the top. And because exp doesn’t have offices, they in term  pay that money back to Agents for helping to grow the company. Although that is an incentive, recruiting is certainly not a requirement in the XP and many agents do quite well buying and selling real estate-  This passive income is optional and certainly works well towards an exit strategy come time to retire!

Exp offers tremendous financial incentives for realtors that extend beyond revenue share including stock awards and 100% commission split after reaching a $16K cap. We also offer online training every day of the week however, as a new agent, I would recommend aligning yourself with a bricks and mortar brokerage so that you learn the tricks of the trade sitting side-by-side   seasoned agent and a broker to walk you through the nitty-gritty. Exp is an amazing concept however, i would recommend a more traditional Brokerage which offers closer oversight and mentoring of new Agents.   If you enter exp as a new agent you would be assigned a mentor until you’ve closed 3 transactions however, I do believe it’s better to get face-to-face, hands-on experience with experienced agents first. Best of luck to you !

Mike Cumbie · Answer

I would ask them up front. As mentioned there are some brokerages where it is their business model. Hire as many agents as possible and let them recruit more people. I do believe most brokerages just recruit who is going to fit into the office/system currently in place.

Steven McCutcheon · Answer

@Nam Hoang

It’s pretty common, but they’re all different. Some might offer incentives to agents if the person they recruit performs well. Varies to every brokerage

Do agents typically get compensation for recruiting new agents?

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