People interested in a real estate career with our company often ask, “What is the commission split?” The split is actually irrelevant! In the absence of value, any amount you pay is too much. What really matters is that your broker provides that value in the form of the very best real estate training to give you the best chances for success. If you lack education and know-how in the real estate business, and don’t know how to run your business, people are simply not going to work with you.
What is A Cap?
The cap is simply a max payout per anniversary year. If a KW agent does not reach their cap in a year, they DO NOT have to make up the difference…
The KW commission split is very competitive, and even superior compared to many other real estate firms. The best news is that there are no sweetheart deals for top producing agents. There are no secret agreements for marketing budgets or parking spaces, which only a few agents benefit from. Every Keller Williams agent is treated exactly the same.
Here is how it works
Every agent, no matter the level of experience, is on a 70/30 split. That’s 70% to the agent and 30% to the broker. Since KW is a franchise, there is also a royalty due to KW International, 6% on each transaction capped at $3,000 per year.
If you are thinking about becoming an agent, you need to know that many companies charge new agent 50 to 60% because they figure that you need more help and it will take up more of their resources to assist you.
It’s important to remember that a commission split is only as good as the company’s training, education, support and technology. Does it matter if a company offers a 100% commission split if they don’t offer the support and training? 100% of zero is still zero.
The best part about the Keller Williams commission structure is the ‘cap’. The cap amount varies from Market Center to Market Center. Our local team leaders can give you the specifics on the cap amount in your area. The cap is based on economic conditions and operating expenses for that specific market center. Also contributing to the cap amount is the average median home price in your area. It usually amounts to selling 8-10 houses per year. Once an agent reaches the set amount of production (cap), they no longer pay the cap and royalty, meaning the ENTIRE 100% of the commissions earned goes entirely to the agent. Not only does KW offer the best real estate career training and support, there also is a true incentive at KW for our associates to share ideas and teach classes.
With the addition of KW profit share, many of our associates actually NET more than a 100% of their commissions, as their annual profit share exceeds their commission cap every year!
1. In the Atlanta, GA market, an agent cap is $15,000. If an agent earns $200,000 in gross commission income, they will net $182,000.
$200,000 Commissions in 12-month anniversary year
– $15,000 cap to office
– $3,000 royalty to KWRI
NET to agent = $182,000
2. In the Beverly Hills, CA market, an agent cap is $42,000. If an agent earns $400,000 in gross commission income, they will net $355,000.
$400,000 Commissions in 12-month anniversary year
– $42,000 cap to office
– $3,000 royalty to KWRI
NET to agent = $355,000
Sam is a new agent with KW and is ready to start building his real estate business. The cap in his market center is $18,000 per year. This breaks down to $15,000 to the market center and $3,000 in royalty to KW International. If Sam closes a total of $4 Million in sales, it will gives him a gross commission income (GCI) of $120,000. From this amount, $18,000 is paid as his cap and royalty with his commission split. The remainder, $102,000, is Sam’s to keep and he will not pay KW on any future transactions until his anniversary date. At that point he will start capping all over again. If he does not reach his cap, he is not required to pay the difference.
If his gross commission income is $200,000, he will still only pays $18,000 per year to KW and takes home $182,000. KW only gets paid when Sam gets paid. And KW does not get paid once Sam reaches his cap. He doesn’t work for Keller Williams. Keller Williams works for him. Under this system, every agent is worth exactly the same, a new agent that caps is equal to a top producing agent in the market center.
The beauty of the KW commission splits system is that if the agent earns anything after capping during the anniversary year, they would keep 100%.
Keller Williams works off the agent’s anniversary date, not the calendar year. So no matter when you start, you have a full year to cap and enjoy 100% commissions.