How to incorporate various types of commission structures into your Agency Agreement

Whether it's a fixed fee or a performance-based commission, this article will guide you in including it in your Agency Agreement.

Flat % Commission

This is the most common method - basically its the % x the price 
E.g. If the estimated price is $1m - 1.1m - and you enter a 2% flat % commission rate - then the commission would be $20,000 - $22,000

Commission rate 2%

Commission 1

2024_Realtair_Commision_Structure_1

 

Flat dollar commission
A flat fee regardless of the sale price

Commission 2

Agent’s Remuneration in the agreement should be $25,000

2024_Realtair_Agents_1_Numeration

Tiered Commission

  • Think of this as your sliding scale, the commission payable depends on the contract price
  • There are three types of tiered Commission

Fixed percentage
Agent’s commission is based on the final sale price of the property multiplied by the agreed percentage rate of that bracket.

Sample:
Fixed % Tiered Commission inputs are:

2024_Realtair_Sign_Tired commision new ui


Agent’s selling fee in the Sliding Scale should be:

2024_Realtair_Fixed_1_percent agreement


image-20231121-044254

Estimated selling price is $1 - $1.1m
at $1m the commission applicable is 1.5%, and at 1.1m the % applicable is 2.5%

Hence commission payable based on the estimated selling price from and to would be
$1m x 1.5% = $15,000
and at $1.1m x 2.5% = $27,500

 

Fixed Dollar

Works similar to Fixed %
Agent’s commission is based on the final sale price of the property depends on the fixed dollar

2024_Realtair_Sign_Fixed dollar new ui 

We insert the text “ Refer to attached commission schedule annexure”within the Agreement

2024_Realtair_Sign_Fixed dollar sign

Estimated selling price is $1 - $1.1m

at $1m the commission applicable is $10,000 and at $1.1m the commission applicable is $15,000

 

Incremental

This structure allows Agents to earn the base commission amount plus the extra percentage rate for every increment until the final sale price of the property

2024_Realtair_Sign_incremental commision new ui

We insert the text “ Refer to attached commission schedule annexure”within the Agreement

 2024_Realtair_Sign_incremental

Estimated selling price is $1 - $1.1m