How Your Pay Your Way™ fees are assessed for agent teams is ultimately the decision of the broker. The size of the team, whether or not each team member has a desk, and the ‘load’ the agent team places on the brokerage and staff, are all determining factors in a fair and equitable split that preserves broker profitability and ensures an attractive and competitive opportunity for the agent team leader.
Your Pay Your Way™ defines the five financial ‘commitments’ of a broker. The first is The Franchise and Marketing Fee, the second is The Shared Office Expense Fee, the third is The Administrative Staff Fee, the fourth is the Basic Agent Service and Technology Fee, and the fifth is The Broker Service Fee. Depending on the situation, some or all of these fees may be assessed to the Team Leader for their team members.
All ‘team’ sales whether credited to a team member or the team leader are subject to the first four broker commitments up to a maximum of $5,000.00 each or a total of $20,000.00 per year. All team members are subject to The Franchise and Marketing Fee up to an annual maximum of $5,000.00 per year. The Broker service fee is equal to 10% of all gross commissions earned. It has no annual cap. It is structured this way to ensure that the broker owner is compensated, rewarded, and motivated to support elite producers regardless of their volume.
If the team shares a single desk in the brokerage then The Shared Office Expense, and The Administrative Staff Fee are both waived for the team member or team members. The Basic Agent Service and Technology Package is also waived unless there are actual costs associated with a specific team member. For instance, if the team leader desires that her team member has their own 8 X 8 phone line, the team leader would be assessed those actual charges on a monthly basis.
As a rule, agent teams operate, advertise and market themselves as a single entity. For instance, the three member ‘Sims Team’ would advertise as a team and not as three individual licensees. If at some point a team member elects to ‘graduate’ to doing business on their own as an individual agent they would do so in accordance with Your Pay Your Way™.
The granting of team status is at the sole discretion of the broker owner. An obvious example of an agent team is a married couple where the spouses, work, market themselves, and sell together. Another example is of an agent who brings on a son or daughter to learn the business, assist in day to day activities, and possibly over time take over the team. A third example is a successful team member consistently grossing more than $150,000.00 per year who needs to bring on a buyer agent to expand and take the quality of their service to a new level.
Your Pay Your Way™ Matrix for Agent Teams
Two Person Team Example
Let’s consider an agent team made up of two people who average $250,000 a year in gross commissions. The team will pay 30% of their gross commissions to the brokerage on the first $100,000 earned to meet their five fee obligations outlined above. They will pay just 10% on the last $150,000 earned to cover The Broker Service Fee. Because they are a 2-person team, they will also be assessed and additional $5,000 for the designated team member.
See the example below:
In the above scenario, the effective discount to the team leader is $15,000 per year compared to two individual agents doing the same amount of business. A team structure only makes sense when two people working together can do the work of three or more. We want to encourage and support that kind of productivity and pledge to make all the resources at our disposal to help make that happen.
The split for a two-person team is 70/30 on the first $125,000 in sales and 90/10 after that. The team leader is responsible for all additional costs associated with the team including board dues, MLS fees and E and O insurance for each team member.