The Advantages of Straight Commission in Commercial Real Estate Brokerage

In commercial real estate brokerage it is common for the top agents to be employed on straight commission; in that way they can be rewarded based on achievement and results in listings and commissions.  For new sales people to the industry that process of earnings can be really hard until such time as the market respects their skill and value as an agent, and is thereby giving them new business leads and opportunities.  It takes time to become a top agent earning a lot of commission; it doesn’t happen overnight.

So what are the advantages of commission only employment packages for agents?  Try some of these for starters:

  1. It provides real stimulus to agents to get results and grow the business opportunity fast.
  2. It rewards productivity over time and on that basis encourages top agents to focus on growth of their sales territory.
  3. It gives those agents a good degree of independence to improve and personalise their services and client base.
  4. It minimises the costs for a brokerage in employing sales people
  5. It eliminates fairly quickly those agents that cannot grow their business effectively and efficiently

Whilst these things have benefit to the brokerage and the agent, I go back to the point that it takes time to build skills and market share as part of the process.  The world is full of agents that have lots of ‘self-belief’ and ‘not enough skill’.  One would say that you have to start somewhere in the industry and that is why a lot of brokerages will have ‘trainee’ packages to get ‘newbies’ underway with some skills and encouragement.

If you are new to the industry, carefully consider what I have said here and choose the brokerage that can give you the right support and training to grow your skills and your market share.  Don’t worry too much about commission calculations until you are really commanding your market and your client base.

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