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REIQ Journal : July 2008
Industry Practice 19 Show me the money By Jason Roach, National Head of Real Estate, Macquarie Relationship Banking Practice 19 Show me the money By Jason Roach, National Head of Real Estate, Macquarie Relationship Banking agencies agencies should be using strategies, other than commission splits, to compete for and retain staff. But how do you strike the right balance between giving staff reasons to stay and not giving away your profits? LAST YEAR MACQUARIE Relationship Banking conducted a survey of hundreds of real estate agencies to pull together a benchmark for the industry across sales, property management, staffing and salaries. When it came to commissions, the benchmarking Survey found the typical agency splits 40 per cent of agency commission with sales staff. Our intent with the benchmark was to give principals an informed idea of what the industry average is, but there’s only so far you can apply this 40 per cent commission split figure. It’s not a hard and fast rule. For one, commissions varied markedly according to size of agency. Small agencies (less than 10 staff) gave an average of 38 per cent to sales staff; mid-sized agency commission splits were 42 per cent; and large agencies (more than 20 staff) gave up to 46 per cent. In dollar terms, the big agencies paid the most generous commissions – 35 per cent of agents in large agencies earned more than $150,000, compared to just nine per cent in small agencies and 19 per cent in mid-sized agencies. Elite sales staff The benchmark found the top 1 per cent of agents earn more than $1 million a year. And the top 2 per cent of agents earn more than $500,000 a year. This is an important aspirational goal for agents who want to succeed and it gives some genuine balance to the stories of super earnings currently out in the market. REIQ Journal July 2008