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8 Keys to High Commercial Real Estate Commissions – Part 1

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The 2016 survey shared several trends and practices of commercial real estate brokers and agents, including support, tenure, social media and yes, realtor commission benchmarks that are insightful in any year.

I will dig deeper into the realtor commission data, and see if there are trends that pay the greatest realtor commission income, and how you can get the highest possible commission for your CRE sale.

In this article:

  1. A Survey on Commercial Real Estate Broker Fees
  2. Determining the Sample Size
  3. Age and Income
  4. Tenure and Income
  5. Marketing Support and Income
  6. Product Type Versus Income

Linda Day Harrison, creator of the terrific theBrokerList, along with marketing platform provider, Buildout, regularly publish their findings from their national commercial real estate survey, The DNA of CRE. If you have not seen it, I highly recommend you review it.

Realtor Commission | How Much Commission Do Commercial Real Estate Agents Make?

 

A Survey on Commercial Real Estate Broker Fees

 

In this first of two blogs, we will look at 4 of the 8 keys to earning higher commercial real estate commissions.

RELATED: 8 Keys to High Commercial Real Estate Commissions PART 2

Determining the Sample Size

 

Before we dive into the data itself, it is vital that we share characteristics of the data that may, in fact, skew the findings, or more practically, shed light on its direct application to you and your personal business.

Here are several key data points you need to be aware of:

  • Several hundred people completed this survey
  • All regions of the US were represented, and equally.
  • 45% of the respondents were from national brokerage firms, with 55% from independent brokerage firms.
  • 46% hold CCIM designations, 13% held SIOR designations (thus you may assume the costs of commissions paid would be higher than the average)

 

To keep things simple I recalculated the data, to look at 4 distinct buckets of realtor commission earnings.

  • Less than $100,0000
  • Between $100,001 and $200,000
  • Between $200,001 and $500,000, and
  • Greater than $500,000

Based on the data collected, here are the first series of observations.

Age and Income

person counting money with smartphones in front on desk | Keys to High Commercial Real Estate Commissions – Part 1 | broker commission

 

Of those surveyed, 23% made less than $100,000 GCI, while 16% got paid with over $500,000 in Gross broker commission income.

For those looking to make over $500,000 GCI, the key earning years seems to be between 40 and 60 years old; representing over 60% of all high earners. If you are in this range, this is your prime earning time. If you are not there yet, call us now.

Tenure and Income

 

Age is not a direct reflection of tenure. However, of those surveyed, just about 70% had more than 11 years of experience, yet these same pools of respondents accounted for 87% of those earning more than $500,000 GCI.

Note, just over 2% of those with less than 1 year of experience earned over $500,000 GCI.

So, there are still opportunities to earn high broker commission dollars when you first start out, but the longer you stay in the game the better are your chances of earning more with each transaction.

Marketing Support and Income

 

Providing marketing support has a significant impact on real estate agents’ ability to earn more.

Respondents were asked if they were provided marketing support from their firm. 67% declared they did receive marketing support.

More telling is that 23% of those surveyed who received marketing support earned greater than $500,000 compared to just over 2% for those that did not.

If you don’t have marketing support – get it and get it now. Virtual assistant, outsource, part-time, full-time, doesn’t matter.

Product Type Versus Income

 

There are always suggestions that one property is better than another when it comes to earning commissions. For example, I have often heard “if you really want to earn the big bucks, focus on _______!”

The survey findings suggest otherwise, however. For example, while multi-family was the focus for 14.19% of all respondents, it also represented 14.6% of all those earning greater than $500,000.

The deviation was not significant enough to suggest that focusing on multi-family would be better than focusing on some alternative product type. This was true across all product types. So, be careful not to fall into “the grass is always greener” trap.

 

These are the first four of the eight observations I wanted to share with you regarding high commission findings. In the next blog, we will look at the impact of location, designation and company affiliation, and biggest concerns.

Get known, connect instantly, and win more business for your commercial real estate business! In this webinar session, Bo Barron will show you how presence, a great value proposition, and a targeted prospecting campaign can grow your business without chaos! You can watch the webinar here.

Up Next: 4 Basic CRE Financial Metrics You Need To Know

Editor’s Note: This article was originally published on January 24, 2017, and has been updated for quality and relevancy.

 

7 Responses

  1. Rod,
    Thank you for turning our survey into some calls to actions for brokers. I think you have done a wonderful job of pointing out some vital facts about the industry and how earnings can tell a story. As always we love your genius and passion to help brokers to be successful. You are always on point!
    Thanks,
    Linda

  2. Rod, this is great! Please include data on what percentage of the CCIM candidates were >$500,000 producers. I am trying to justify my broker paying for CCIM designation, and I don’t have any hard numbers yet on how the designation affects income.

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