Low splits or high 1099s: Why agents should join a team



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Verl Workman explains how the leverage a team provides can result in higher overall earnings for team members vs. those who go it alone.

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Among the number and variety of critical decisions agents are faced with on a daily basis, the sometimes overwhelming decision between flying solo or joining a team can make or break an agent’s career.

With the allure of independence comes the promise of high commission splits, but at what cost? Let’s explore why embracing a team and its lower commission splits could be the smartest move you’ll ever make.

The solo agent’s gamble: High splits, higher stakes 

Independent contractors often enjoy the freedom to dictate their commission splits, sometimes taking home 70 percent to 90 percent of the commission, or even opting for a 100 percent commission model by paying a flat fee to their brokerage.

While this autonomy can be very attractive, it also comes with the full weight of business expenses, marketing efforts, client servicing and financial management, including taxes and insurance.

Flying solo is oftentimes a right of passage, but let me ask you this: How many wildly successful businesses where the solo operator makes a ton of money, serves their clients with amazing services and support, and balances life at the same time, operates as a company of one? Let that simmer.

The team advantage: Lower splits, higher volume 

Agents on a real estate team often accept lower commission splits. However, this trade-off comes with significant benefits, as the brokerage assumes many operational costs and risks. Agents gain access to office space, administrative support, marketing resources, lead generation and training.

One of the biggest advantages they receive is becoming part of a team that is focused on production and specialization, providing more and better services to the consumer. These resources allow agents to concentrate on what they do best: selling homes. It also allows team members who specialize in transaction coordination, closing activities and paperwork to excel in those areas. 

The golden question 

When new agents join my team, I pose a critical question: “Would you rather have a high split or high 1099?” Or, another way to ask is, “What is more important to you: the split you are on or the amount of money you take home to your family?”

This question highlights that the true value lies not in the split percentage but in the actual deals closed. Well-coached team members benefit from a wealth of resources, sometimes leads and training that ensures they consistently close deals, maximizing their earning potential. The biggest advantage of being on a team is leverage.

The allure of independence vs. team structure 

The independence of a solo real estate agent offers the potential for higher earnings per deal. However, this path is laden with hidden costs, such as self-marketing and administrative tasks and always having to be “on” when it comes to responding to clients’ needs. When these variables are factored in, the net earnings may not be as lucrative as they first appear.

Conversely, a team structure provides a more predictable and sustainable career path with a culture of productivity, where daily huddles review the past day’s performance, daily role plays and prospecting as a team.

These daily activities, while they may seem simple, are actually quite difficult to duplicate as an individual. Though the commission splits are lower, consistent support and shared resources often lead to higher overall earnings and greater career and client satisfaction.

Real-life success in team environments 

The evidence of success within team environments is undeniable. Agents who join teams often outperform their solo counterparts financially, thanks to the support, leads, culture and branding provided by the team. Testimonials and case studies reveal that lower splits don’t necessarily equate to lower earnings; in fact, the opposite is often true.

As agents consider their future in real estate, they are welcome and encouraged to evaluate the full compensation package, weighing the benefits of support and stability against the potential for higher earnings and independence. The right team can offer a balanced approach, ensuring agents are well-equipped to thrive in today’s competitive and changing market.

If you’re an agent contemplating the solo versus team dilemma, take the next step towards a more prosperous career. Join a team that supports your growth and maximizes your earning potential. The right team can make all the difference.

Verl Workman is founder and CEO of Workman Success Systems. Connect with him on LinkedIn or Instagram.





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