Professional agents put a good amount of effort into becoming savvy negotiators and dedicated advisors who are committed to their client’s success. Although the potential for earnings is high, market fluctuations and low seasons can drastically impact their earnings.
Another factor that can also heavily impact agents’ earnings is broker commissions and service fees. This cause for concern has led to some brokerages pursuing different business models in an attempt to reduce commissions.
Sean Redinger, a digital marketing agency owner who works with over 230 real estate agents, looked more closely into this area of concern. The former 7-figure COO currently works with over 230 real estate agents and found that their current broker model required them to pay service fees, monthly recurring fees, and joining fees.
This led to high levels of stress and anxiety while at the same time receiving little return on their investment. Sean Redinger also explains how real estate brokers charge between $12,000 and $16,000 annually, with advertising costs on top of this expenditure. He believes that the $12,000-16,000 spent on brokerage fees would be much more beneficial if they allocated it towards their own marketing initiatives instead.
Cloud Realty is set to launch and radically transform the broker industry. Sean, the founder of the cloud brokerage, created the marketing tool with a direct financial incentive to help the agent secure the best possible marketing deals. Cloud Realty operates as a virtual nationwide brokerage and functions as both a referral brokerage and a cloud-based virtual brokerage.
The cloud brokerage’s primary benefit is that it will allow real estate agents to keep 100% of their commissions on self-generated leads. With 25 agents already committed to changing the way they earn commissions, Sean Redinger states, “all registered agents of Cloud Realty will not be required to pay any upfront, recurring, or monthly fees. One of the key value propositions is that they will also be able to utilise the CRM technology free of charge and will only be required to pay a one-time transaction fee after the first 2 transactions.”
Therefore, an agent who joins but doesn’t close a single deal is not required to pay anything. Typically with the current broker model, Sean Redinger explains, “the amount of real estate agents who actually reach the cap and their fullest potential is usually less than 15%. So 85% of agents don’t reach their cap. In addition, they have an 80/20 split until they reach that cap, and on top of that, they are charged a monthly recurring fee.” The time and effort put in by agents shouldn’t be diminished to account for the high commissions charged by many brokerages.
The solution rests in brokerages such as Cloud Realty overhauling and optimising their own operations in order to offer better splits. As a result, it will enable agents to keep their cash and invest it in other areas of business that will bring them greater returns.