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    Determining Commission Plans Based On Your Key Numbers

    Monday, June 11, 2012, 2:48 AM [General]

    Your ability, as a Champion Lead Agent, to set complete and compelling performance standards will create the opportunity for your team to reach the Champion Team level. Without these concrete performance standards, your team will always fall short of the mark for Champion Team status. The truth is unless your average commissions check exceeds $10,000,Cheap Chris Long Jersey, it is challenging to generate any more than a small, short-term net profit. You will usually be in the range of $500 to $1,500 per transaction after the associated costs are covered in terms of your time and cost per transaction. The secret to an effective commission plan for Buyer's Agents is your ability to calculate the split arrangement from your seven key numbers. You must determine what amount of the net profit you are willing to share after all costs are paid for. The costs must also factor in your time invested to manage, coach,Cheap Jamie Silva Jersey, and train to improve performance. And the costs must reflect the amount of time you will personally have to invest in each transaction to guarantee it's closing for the team and your Buyer's Agent. You must know the performance standards that you want to achieve in net profit for the company before you enter into a transaction with a prospect. It could determine whether you service that prospect or refer them to another Agent in your office or someone on your Buyer's Agent team. For example,throwback Dennis Byrd Jersey, if your average commissions check through a Buyer's Agent was $6,Cheap Derrick Ward Jersey,000 gross, and you are on an 80/20 split with your Broker, the revenue you receive would be $4,Cheap DeSean Jackson Jersey,800. Then your average cost per transaction is $1,500 to cover your car, cell phone, Administrative Assistants, advertising, marketing, etc. You are now down to $3,300 before you factor your time in as a cost. You make $250 an hour, and you factor in three hours of training, education, and coaching for each transaction your Buyer's Agent does. You now have a final net profit of only $2,550 left to split with the Buyer's Agent. How do you split that up? If you are too low,Cheap Josh Beekman Jersey, you can't attract skillful Buyer's Agents to work for you. If you aren't going to make something, why bother?
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