Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Agent
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 4 years ago,

User Stats

14
Posts
3
Votes
Matt Keller
  • Real Estate Agent
3
Votes |
14
Posts

Is this commission split fair?

Matt Keller
  • Real Estate Agent
Posted

Hi. I'm a new agent. I've been license for a few months. Before I got licensed I was finding deals for some flippers for about 1 year. Recently I referred a potential seller to another agent (let's call him Paul) for 25% of their commission. That house's value was around 3m. That seller never ended up signing the listing but Paul still suggested we work together to find future deals. Paul knows a large developer in the area that builds new single family homes. The developer has a deal with Paul where whenever Paul brings them an offmarket opportunity they guarantee he can list the new build on the back end. Paul agreed that for any offmarket lead I bring him that the developer buys he will not only give me 25% of his 2.5% commission on the front end but also 25% of his 2.5% from the newly built home as well. This seemed like a good idea because the developer often pays 2m+ for teardowns and then builds 6-7m dollar homes. Recently we got our first deal together under contract. The purchase price is 1.05m with a 60 day escrow and the new home should sell for 2.3-2.5m within 12-16 months. That means I'd be getting around 6k after 60 days from the first sale and then 14-15k for the second after 12-16 months. This deal took about 3 weeks of back and forth with the seller to get tied up but most of the high level negotiation and all of the paper work was done by Paul. My main role is effectively to cold call lots of owners from a list and just line up appointments for Paul. I've been toying with the idea of asking for a higher split of the commission. At least on the front end. My question though is from Paul's perspective could this demotivate him to continue working with me etc. Should I just be happy with the agreement we have and leave it at that or should I ask for more money on future deals and if so what would be the best way to go about asking? What do you think?

Loading replies...