what is the idea number? Is it better to have fewer and demand higher production or have a more knowing that they will each sell 1-2 per month?

It is more an issue of what is return on investment of time you make and what your overhead is? Do a profit and Loss on buyer agent positions taking into account value of your management time, space, equipment etc. On our Team a minimum is 30 deals per year to generate enough profit to make a position viable. The real question is conversion, how many leads are you providing that are not being converted? These are lost expenses. Remember that on average in our industry only 6-12% of leads are converted to transactions so don't expect 50 deals out of 100 leads.

excellent points. How do you train your buyer agents? How many do you have? what do you pay them??

__________________
Tim and Julie Harris

Hi there,

Regarding buyers agents, I just cut back from 5 to 3. I had one closing over 250K and one doing close to 100K and three doing under 50K. I decided why not get three strong people versus what I had. What I am finding out is we are 42K ahead of last year in GCI in a down market and those that I have are working smarter versus harder and I am making more since I have reduced monthly fees.

Regarding compensation

50/50 up to 75K
55/45 75K-125K
60/40 after that. (buyers agent

Leslie McDOnnell

Leslie, you are doing something right with your agents...those are impressive numbers. What is the average sales price for your buyer agents.

In many markets the agent owner makes no profit off the buyer agents if they pay them more than 30-35%. Many coaching clients with buyer agents make maybe $300 net per buyer agent transaction....thats where the average sales price is less than $250k.

Please share more details on how the numbers for your agents sort out..

Our average sales price is just shy of 400k. The one making 250K is a little higher, the one making just under 100K is under that. The third person is more like in the 250 and under range with the exception of a couple of deals. Remember I do NO showing at all. I have strict systems and rules that I require and require things like cc's on all outgoing email reponses to a lead that comes in through the internet. We use a drip system to lead follow up and systems within a2k (online agent, etc) to insure CONSISTENT follow up and I do check on monitor it on a biweekly basis through spread sheets, etc.

Leslie McDonnell

I am paying all new ones coming in 40%. No more. I only have one at 50%. They need to do 25 plus deals a year or I get rid of them. We can usually tell within 3 months if they are going to make it or not. I have one (the 50% gal) that will close about 50 units and make a fine living. They can only handle so much, no matter how good they are. You can tell when they are over worked, not converting as well, skimming from the top and let some fall through the cracks...that's when you need more buyer specialists to take what's in the trash and make something happen. If one can't do something with a lead, then someone else might be able to. Don't take their word that it was a dead lead.

Jana

Great posts!

This is the best formula for paying buyer agents that we have seen;

1) Off the top of every buyer side deal there is a flat fee of 10% that goes to the team. If the commission was $10,000 the team collects $1000. THEN the splits.
2) There is a processing fee of $395 (some charge $995) paid by the buyer.
3) The buyer agents split is 50/50 however
if the buyer lead was sourced from the team..past client, marketing, sign call etc then the buyer agents 50% is reduced by 15%. Called a lead generation fee. In other words, their split becomes 35%.
IF they generated the lead then they are given a 15% bonus on top of the 50%. They get 65%. In most cases from the teams that we have coached..buyer agents dont generate many leads.

To pay a buyer agent more than this usually means little to no profit for the team...let alone the team leader.

Tim

__________________
Tim and Julie Harris

We like to see buyer agents make good money. Much easier to direct a few good agents vs minimally productive ones.

Fred Leonrd
Stamford, CT