I received my October 2008 copy of Tierra Grande this afternoon. I love reading it because it's specific to Texas real estate instead of trying to interpret national information.
There were several new studies presented at the American Real Estate Society meeting in April 2008. One of the studies was about agent compensation verse their performance.
"The larger the brokerage firm, the more likely the agent is to be on full commission." I'm not sure if this is interpreted to mean "full commission" as no income coming from any other entities like property management or another job, or if "full commission" means 100% with no splits to the Broker. I interpret it as no splits to the Broker.
Which ever they're talking about, the study goes on to further state that, "...male agents are more likely to take full commissions than are female agents. The authors cite studies indicating that men are overconfident about their financial abilities and more likely to take risks when investing as well as when making career choices."
Hmmm, what do you think about that one? I thought guys were supposed to be the more analytical ones who think things through and won't do anything without knowing what the outcome would be. With that, it seems more like women would take more risks with investing and making career choices being a little less sure of themselves and not doing as much research. But what do I know, I'm not a typical woman!
And here's the most interesting stuff I found in these studies. "...the more hours full-time agents worked, the less likely they were to be on full commission. Full commission agents make more money but work fewer hours, suggesting that they work more efficiently."
I think I completely agree with this! When I wasn't on a full commission, and was splitting ungodly amounts of money with my broker, I had to work my arse off just to make a decent salary. When I switched to Re/Max, after making a not-so-smart-move to a team, I started working smarter and not harder and doubled my income. The next year, I doubled again.
I still work very hard, but I don't work pay check to pay check. I have a steady amount of closings each month. I close an average of 25-28 transactions a year, and don't worry about where my next transaction will come from (until my move to Austin in a couple of months). But even with my upcoming move, I know I'll be just as successful, if not more so, and will apply these studies so I don't find myself working longer hours and being less productive.
Have you read the article yet? What do you think about the studies?
Hi Donna... I like Tierra Grande a lot, but the reading is always a bit dry... it goes down better with a drink. As for the study, I have not read it yet, but the excerpts you provided all make sense to me. Now I can't wait to read the article!
I'm not licensed in the State of Texas, however, I'm curious what you consider a "full commission". I rarely negotiate my commission, which is 7%.
I re-read your blog and now understand what you're talking about the broker split. Even though I work for a corporate company, everything is negotiated.
Steve, I've only read half of the current issue thus far, but it has some great stats about foreclosures have actually declined in Texas over the past year! My next blog....
Darla, Yes, it's about splits. Someone making only 60-80% is going to work more than someone making 95-100% to make the same amount of money.
I guess I am a hybrid. I work for full commission, but work more hours than almost any of the agents I know.
Interesting...I wonder where they get their statistics? Perhaps the difference comes from the fact that most full commission agents are responsible for their own expenses as well, so that requires them to be better at budgeting and make more careful decisions - just to generally be more efficient in that way because it's their money, not their brokers money. I'm not sure that agents making 60-80% work more thans someone making 95-100%, I think they may work the same, but for less money, which I guess would make them have to close more deals...okay, I get it now! :)
Randy, I feel that way too sometimes.
Kelly, It definitely helps to talk/type out loud, huh?
Wow,
I saw the title and got so excited, because it is sooo true. Full service is needed now more than EVER! This is why the bottom feeders will starve in a challenged market because it tests skill more than ever!
Greg, Glad to hear I can get you excited!! LMAO