city buildings at sunset

In commercial real estate brokerage, the commissions are always there in some form or another to potentially convert across sales and leasing.   The more important issue for agents and brokers to consider in doing that is the size and type of commissions per transaction.

Some thought should occur with the actual property types and the engaged clients; incomes earned can then increase to a plan.  Set some commission targets that you can work towards over time.  Here are some factors to consider:

  • When you fail to plan in brokerage, you set yourself up for mediocre results. Start your real estate plan.
  • Some clients and properties will be time wasting, so look for those indicators early in the process; qualify all your clients and prospects.
  • In your city and territory, there will be zones and buildings where people prefer to purchase and or occupy; focus on those properties and zones.
  • When you control the listing stock, people will find you and note your market share for future engagement; exclusivity matters.

The logic here is that earning targets can be set and KPI’s monitored individually, especially when it comes to the income earned from sales and leasing listings and transactions.  If you do all of it the right way, then improvements in market share then help underpin personal incomes; the transactions get larger and more relevant.  The ‘strategic’ approach to the real estate business applies to annual brokerage planning and agent activity.


Set the right targets

What are the targets here?  Try some of these for starters:

  • Attracting more personal income by agent individually
  • Improving fees earned by transaction size and precinct or territory
  • Spread out the earnings across the year
  • Improving the returns achieved from targeted property or business groups
  • Growing market share by zone and precinct
  • Growing vendor paid marketing per week and monthly
  • Improving conversions to exclusive listings
  • Reducing the time on market through specific and direct promotion

When these things work at the individual level of each broker or agent, then the same rules can apply to the complete team and brokerage.  They are what I call the ‘high priority commission targets’, and they allow greater earnings potential for all concerned.


Brokerage planning

Here are some other ideas to merge into your planning processes for agent earnings in the financial or calendar year ahead:

  1. Determine the property types that seem to offer the best levels of real estate activity in the location for the coming 12 months. When you look back in history, you will see some useful trends and indicators from other property sales and leasing that you can now interpret.
  2. Look at the levels of supply and demand as they apply in the allocated territory on an agent by the agent basis. Understand where the new buildings are located, or to be constructed, and where the new potential property developments may occur.
  3. Understand the levels of competition in each property zone or precinct and particularly identify the top agents that may be holding market share. Strategies will need to be structured to win market share.
  4. Assess the factors of time on market for property types and precincts. With those numbers, you will be able to understand where the better precincts are when it comes to sales and leasing activity.
  5. Identify the priority buildings by precinct so that those buildings can factor into a targeted business plan and growth of market share. Each agent or broker should have identified priority buildings for the zone or precinct in which they operate.

These factors allow directed effort in commercial real estate sales and leasing.  That is then how you can reach your high priority targets through commissions across commercial brokerage.