In the competitive world of real estate, it's essential to understand how commission structures work within different brokerages. Keller Williams Realty, one of the leading real estate firms, has an intriguing concept known as a "capping agent." Let's dive deeper into what this means and explore the benefits it offers.
A Transparent Commission Structure
As a former Team Leader at Keller Williams Realty's Olathe branch, Diamond Partners, Inc, let me shed light on our cap structure as an example. It's important to note that each Keller Williams franchise has the autonomy to set its own cap amounts. For a comprehensive explanation, it's best to reach out to a local Team Leader or me directly.
How Does Capping Work?
For a single agent at KW Diamond Partners in Olathe, our cap amount is set at $18,000. Additionally, there's a franchise royalty fee of $3,000 payable to Keller Williams in Austin, TX. These numbers will be relevant as we delve further.
With each sale, whether as a buyer or seller agent, you'll earn a commission that has been agreed upon within the Multiple Listing Service (MLS). This commission is then paid to our brokerage, KWR Diamond Partners, Inc, and distributed as follows:
- 6% goes to Keller Williams in Austin.
- 30% stays with our local market center in Olathe.
- 64% is paid to you, the capping agent.
This distribution remains unchanged until you've reached the total amount of $21,000 (which includes the $18,000 cap and the $3,000 franchise royalty fee). In the Olathe housing market, this typically translates to around $2.2 million in house sales, averaging 12-14 sales per year.
The Benefits of Capping
While many agents never reach the cap due to being part-time or not achieving the necessary sales volume, those who do cap experience remarkable advantages. Once you've capped, you keep 100% of the commissions earned until your anniversary date. Yes, you heard that right - no limits, just pure 100% for you.
Consider this example: suppose you're a high-production agent who sold $20,000,000 in volume last year at an average commission rate of 3.0%. By capping at $21,000, you effectively paid a 3.5% split (KWRI fee + KW Olathe cap) and retained a 96.5/3.5 split. This scenario showcases the immense earning potential and financial freedom that capping at Keller Williams offers.
Caption: Olathe Keller Williams
Explore the Possibilities with Keller Williams Realty
If you're curious about Keller Williams Realty and what it can offer you, no matter your location, I invite you to reach out to me via email, comment, or a quick phone call. As an ardent advocate of this company and my location, I'd be delighted to provide guidance and insights on whether becoming a real estate agent with Keller Williams or any other brokerage is a suitable career move for you. Remember, real estate offers excellent financial prospects, but it's also accompanied by unique challenges. Let's discuss and see where this journey may lead.
Join our mailing list for agnostic real estate training.
Have a business. Have a life.
Chris Lengquist
Teaching | Speaking | Coaching
KWR, Diamond Partners, Inc
13671 S Murlen Rd
Olathe, KS 66062
913-568-1579
