Showing Off Spencer-Discovering Spencer, the Brookfields, Worcester County, Massachusetts and New England: What do the Profit Sharing numbers REALLY MEAN?

What do the Profit Sharing numbers REALLY MEAN?

 

Yesterday I was reading Face book and caught a friendly competitor announcing/advertising that they were giving back money house$17583 of profit share that month.  That got me really thinking. 

What does this really mean?  $17583 sounds like a lot of money!!! 

My calculating /financial mind made me break that down.  As of this writing they had 157 agents. 


Wait!!! This calculates to $111.99 per agent. THAT’S NOT A BIG NUMBER!!! 

This got me really thinking.  They put such an emphasis on the profit share, but that is such a little number, what else do they get? 

Okay, I’ll fess up, I brought the calculation one step further, I know their cap is $33000 per year and ours is $18000 per year.  The savings is $15000 per person per year.  If I took the savings each agent would receive times the number of agents 157 the total annual savings would be $2,355,000. 

I believe the $17583 profit share was an unusually large month and therefore the reason for the broadcast.  However let’s assume for comparison purposes it is not.  If I took the $17,583 and multiplied it by 12 months the total profit share would be $210,996. 


The total difference is $2,144,004, or $13,656 per agent.

Magnify

Now we know that money is not everything, or everyone of these agents would leave and come to my office if they knew they were losing $13,656 each year.


If I were an agent looking for a new company, what would I want to know?  Here are some questions I came up with?

What are the company splits?

          Are there other options?

          Is there room for growth?

          Do you have team compensations, and how do they compare?

What will my out of pocket expenses be?

Do you have E&O insurance?

          What does it cover?

Do you have in house training?

          How does it and what are their qualifications?

Do you have a mentoring program?

Do you have accountability groups?

Is there a cost to training, mentoring, or groups?

Are you a Realtor Organization?

Do I have to pay for?

           Desk space

           Computer use

           Phone use

           Copier use

Is there internal competition?

Do you get company leads?

          If so what is the cost?

Do I get a web site?

          If so what is the cost?

How does your company rank locally?

Are you a franchise, and how does the franchise/Brand rank?

Are you know internationally?

Can I get paid for referrals?

Can I do agent to agent referrals?

Is there a company intra-net site where I can create marketing pieces, drip email campaigns, monthly newsletters and other marketing pieces, and training from any location? 

          If yes, is there a cost?

How much support do I get?

Is there office staff available?

 

There may be others, please comment and ad to the list!!!

 

Now this blog is not intended to trash another office.  In fact, I am a big fan of the profit share concept.  Profit share make each individual work for a common goal, the profit of the company.  It makes each person accountable.  I am also impressed how this organization gets the message out and promotes what they are about.  They definitely get a buzz going.  This blog is about digging deeper, and doing a full evaluation.  Know what’s important to you.  Don't get caught up in the fluff, and superficial.

 

If you want to know what our program is, ask?  I did not want to publish in this blog, as we may have lost sight of what the blog was about.

 Pam Crawford

Pam Crawford, ABR,e-PRO®,CRS,CDPE,LMC

Owner, REALTOR®, Managing Partner, MBA, BSBA
RE/MAX Professional Associates

 

phone/fax (508)-784-0503    
e-mail: Pam@PamCrawford.com
www.PamCrawford.com
www.CrawfordRealtyTeam.com

 

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Comment balloon 12 commentsPam Crawford • September 05 2011 10:06AM

Comments

Not all agents in an office participate in the profit sharing, so there is a flaw in your reasoning.

Posted by Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) almost 7 years ago

Wow, Lorrie, you could've said it a little nicer, and maybe in some offices profit sharing is among all agents.

Pam - I really enjoyed your list of questions. It just helps me solidify that I made the right choice. Our market is moving really slowly, so I couldn't afford anything out of pocket right now as I make a transition into this career. I'm fine with my commission split, especially knowing that I'm taken care of in a "family" and that everything is pretty much provided. Plus, amazing training really helps!

Posted by Amanda Howard, NorthernKentuckyHomes.com 859-363-9900 (Century 21 Garner Properties) almost 7 years ago

Lorrie,

You are correct, there are some assumptions, but the cap difference is real.  However, you missed the whole point of the blog!  That was not to get caught up in the numbers, and to ask questions, to determine what is right for you.

Posted by Pam Crawford, Owner-RE/MAX Prof. Assoc.,MBA, CDPE, CRS, ABR (RE/MAX Professional Associates) almost 7 years ago

Amanda,

It sounds like you did not need my list.  It sounds like you made your own, which may have had some similar points.  It's not always about the money!!!  Alot of time its about where you feel appreciated and taken care of.  I hope you are hugely successful.

Posted by Pam Crawford, Owner-RE/MAX Prof. Assoc.,MBA, CDPE, CRS, ABR (RE/MAX Professional Associates) almost 7 years ago

Amanda: Not every agent in an office has a downline. Agents with out one do not get profit share. And not every office is profitable. In those offices that are not, none of the agents get profit sharing.

Posted by Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) almost 7 years ago

So Amanda,

Are you saying that the profits are given back to only some of the agents?  What happens to agents that don't want to recruit other agents but sell alot?  They contribute to the profit by selling and bringing in income, but they don't share in profit because they don't have agents in their downline.  Is that correct?

Posted by Pam Crawford, Owner-RE/MAX Prof. Assoc.,MBA, CDPE, CRS, ABR (RE/MAX Professional Associates) almost 7 years ago

Great list Pam.  A mention of nobody selling more homes then Re/Max could be appropriate.  One out of every ten Realtors is a Re/Max agent.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) almost 7 years ago

Pam: I think you meant that question for me, not Amanda.  Yes, that's correct. If a top producing agent has no one in their downline or has people in the downline who are not producing, they do not get profit share.

Posted by Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) almost 7 years ago

Not to toot the KW horn, but in our area(550k people), the average agent does 4.1 deals per year. Our KW office with 130 agents, has the highest deals per agent out of every office in the whole area at 8.6 deals per agent. The next closest one is Re/Max with 6.7.... We are doing nearly 25% more deals per agent than the next closest competitor. (And our brokerage hasnt even been in business for 2 years).

And yes, many companies claim to be the greatest in the area because they have the largest market share, but its important to know what that really means. It shouldnt be about the market share, it should be about how many deals per agent are being done. I would rather have an office with 10 agents doing 10 deals a year than 100 agents doing 1 deal a year!

Yes, we have a higher commission cap, but we get a TON for it that other brokerages dont get. Profit sharing is just a bonus!

Posted by Ryan Smith (Keller Williams Energy Real Estate Brokerage) almost 7 years ago

10 deals EACH a year I meant....

Posted by Ryan Smith (Keller Williams Energy Real Estate Brokerage) almost 7 years ago

Ryan

You are correct.  Productivity per agent is very important.  In my area the Keller Williams office sells on the average 5 homes per agent and the RE/MAX offices average 10.  The national average is 4.61 for Keller Williams and 10 for RE/MAX. 

Be proud, you have a very productive office.  You must also have good profit share.

Posted by Pam Crawford, Owner-RE/MAX Prof. Assoc.,MBA, CDPE, CRS, ABR (RE/MAX Professional Associates) almost 7 years ago

Speaking of "Profit Sharing".... I intereviewed Aaron Kaufman on my podcast, The Niche Agent, about his appoach to profit sharing and how he's built a very successful business from profit sharing and we discuss how it works. Check out the interview and let me know what you think!

www.TheNicheAgent.com/Episode18

 

Ryan Smith - The Niche Agent

Posted by The Niche Agent, Your Niche Is Our Niche (The Niche Agent) about 4 years ago

Participate