Product Info - Free Commission Agreements - Real Estate: Real Estate Agent

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Sample Real Estate Agent Compensation Plan Template

iReal Estate Agent Compensation Agreement
Revision Date: ii____________

 

This document describes the sales compensation agreement between iii_____________________________ (“Company”) and iv________________________________ (“Payee”) regarding terms related to compensation.
Company and Payee enter into this agreement whereby Payee provides services to the Company and customers of company, in return for compensation specified in this agreement.

Duration:

This agreement covers the period starting from v__________ and ends on _______________.
Commissions will be calculated and paid once every week, for the preceding week. Commissions will be calculated and paid out as part of the next payroll cycle, following the month for which commissions are calculated.

Services:

The primary service rendered by this payee is arranging and closing real estate sales transactions between buyers and sellers. Additionally payee also arranges and closes leases between owners and renters.
Payee can be a listing agent, buying agent or play both roles in a deal.

Base Pay:

viSales Rep's base salary (if any) is specified as part of a separate agreement.

Sales Compensation:

Targeted variable compensation for the full year is vii______________.

Other Compensation:

Sales Rep will be paid for all travel and lodging expenses related to sales activities. Auto travel will be reimbursed at the current federal reimbursement rate viii(Currently $0.56 cents per mile).
Sales Reps will be required to maintain a cell phone as part of conducting sales business. Sales Rep will be provided an allowance of ix$50 per month for cell phone usage.
Client entertainment expenses will be reimbursed as following:
Meals: Reimbursable with receipts.
Special Events: Must be pre-approved. Reimbursable with receipts.
Expenses will be reimbursed within 30 days of being presented with the receipts and a completed expense reimbursement form.

Commercial Sales Commission
This incentive pays commissions on commercial sales transactions closed by payee. This commission is paid every week (depends on the company and the agents agreement).

xCredits:

Any deals that are due to the Payee’s primary efforts are eligible for this commission. Commissionable transactions are closed sales between seller and buyer for commercial properties. Payee gets credit for the sales amount when the deal is closed. Payee gets 50% credit for playing the listing agent role. Payee can also get the other 50% credit if they play the buying agent role.

Calculation:

Calculation is based on the following data available from closed deal.
Sales Amount - This is the total sales price for the property.
Commission rate for the sale is negotiated on a deal-by-deal basis with the seller. This commission is the revenue to the company. This commission revenue is then split between the company and the payee for the role they have played.

Sales Price                             Split Rate %
0 – 1,000,000                               60%
1,000,001 and Above                    70%

Example:

Sale: #1
Sales Price: $1,100,000
Commission Rate: 8%
Company Revenue: $88,000 ($1,100,000 x 8%)
Payee role: Listing Agent Only
Credit for role: 50%
Earned Credit: $44,000 ($88,000 x 50%)
Split Rate: 70%
Commission Amt: $30,800 ($44,000 x 70%)

Residential Sales Commission

This incentive pays commissions on residential sales transactions closed by payee. This commission is paid every week.

xiCredits:

Any deals that are due to the Payee’s primary efforts are eligible for this commission. Commissionable transactions are closed sales between seller and buyer for residential properties. Payee gets credit for the sales amount when the deal is closed. Payee gets 50% credit for playing the listing agent role. Payee can also get the other 50% credit if they play the buying agent role.

Calculation:

Calculation is based on the following data available from closed deal.
Sales Amount - This is the total sales price for the property.
Commission rate for the sale is negotiated on a deal-by-deal basis with the seller. This commission is the revenue to the company. This commission revenue is then split between the company and the payee for the role they have played.
Number of Deals Split Rate %
1 60%
2 and Above 70%
Example:
Sale: #2
Sales Price: $500,000
Commission Rate: 6%
Company Revenue: $30,000 ($500,000 x 6%)
Number of Deals: 2
Payee role: Listing Agent Only
Credit for role: 50%
Earned Credit: $15,000 ($30,000 x 50%)
Split Rate: 70%
Commission Amt: $10,500 ($15,000 x 70%)

Lease Commission

This incentive pays commissions on residential and commercial lease transactions closed by payee. This commission is paid every week.
xiiCredits:
Any deals that are due to the Payee’s primary efforts are eligible for this commission. Commissionable transactions are closed sales between owner and renter for residential or commercial units. Payee gets credit for the lease fees when the deal is closed. Payee gets 50% credit for playing the listing agent role. Payee can also get the other 50% credit if they play the buying agent role.

Calculation:

Calculation is based on the following data available from closed deal.
Lease Fees - This is the lease fees paid by the owner of the property.
Commission rate for the lease is negotiated on a deal-by-deal basis with the seller. This commission is the revenue to the company. This commission revenue is then split between the company and the payee for the role they have played. Lease commission is due only on the move-in date, which is when the renter has moved in to the unit.
Split Rate %
50%

Example:

Lease: #3
Lease fees: $2,400
Payee role: Listing Agent and Buying Agent
Credit for role: 100%
Earned Credit: $2,400
Split Rate: 50%
Commission Amt: $1,200 ($2,400 x 50%)

Special Building Incentive

This incentive pays an additional amount on residential and commercial lease transactions for buildings represented by the company. This commission is paid every week.

Credits:

Any deals that are due to the Payee’s primary efforts are eligible for this commission. Commissionable transactions are closed sales between owner and renter for residential or commercial units.

Calculation:

For every unit in the contracted building that is leased, payee gets a one-time incentive. Incentive is due only on the move-in date, which is when the renter has moved in to the unit.
Incentive $
$250 per leased unit
Example:
Lease: #3
Lease fees: $2,400
Payee role: Listing Agent and Buying Agent

Credit for role: 100%
Incentive Amt: $250

Expense Deductions

Payee’s commissions will be adjusted by certain deductions every week. There will be some standard deductions as well as variable deductions
Standard deductions are:
xiiiDesk Fees: $100/week
Insurance: $20/week
Variable deductions are:
Marketing expense: Variable
Materials: Variable

xivDraw

Payee has a weekly draw. The weekly draw amount is $1,000.
Payee will be advanced the difference between commissions earned during the week and the draw limit, if commissions earned is less than the draw limit.
If commissions earned is greater than the draw limit and there is a current draw balance owed to the Company, then the excess amount will be used to pay down the draw balance.
Draw recovery will continue until draw balance is reduced to zero.

xvSplits

Commissions can be split with other Payees, on a deal-by-deal basis with prior agreement from the company.
A split can be made between one or more Payees playing the same role. In either case, a split percentage would apply indicating the payee’s share based on involvement.

Termination of Employment

On voluntary or involuntary termination of Payee’s engagement with the Company, commissions will be paid on transactions dated prior to the termination date only. Any amounts owed to the Payee will be according to federal and local regulations after withholding taxes and other dues.

Other Terms

1. Payee agrees to follow all Federal and Local laws while engaged in providing services to the Company during the period of this agreement.
2. In the case of any disagreement regarding sales credit, splits and commission calculations, company has sole authority to decide the calculations and results.
3. Payee shall not engage in any other employment during the term of this agreement. Company reserves the right to require Payee to terminate any such other employment at Company’s sole discretion.
4. Any transaction entered into by the Payee during the period specified in this agreement is considered to be made on behalf of the Company and is the property of the Company.
5. All transactions involving other firms or unapproved providers should be first approved by the Company.
6. Payee shall be liable for all fees, including, but not limited to, Standard Fees, appraisals and credit reports ordered on applications he/she originates, if such fees are not paid by the customer. Any unpaid fees will be deducted from any unpaid compensation otherwise due to the Payee under this agreement.
7. The Company establishes Standard Fees for various services, and Payee will require prior approval before changing any of the Standard Fees.
8. Payee agrees to protect all confidential material including prospect data, transactions, and client information belonging to the Company and shall take all reasonable care in making sure that such confidential material is not disbursed to anyone outside the company.
9. Payee shall read, understand and follow all compliance rules in operation from a Federal, state, local and Company level.
10. Payee shall be responsible for acquiring all necessary education, licenses and certificates to legally practice the profession.
11. Payee shall indemnify Company and hold harmless against any Loss or Damage incurred by the Company due to Payee’s gross negligence or misrepresentation during the duration of this agreement.
12. Payee shall use the most ethical practices while engaging in any sales activity.
13. This entire agreement shall be governed by the laws of the State of ___________.


Company                           Payee
_______________________ __________________________
By                                     By
_______________________ __________________________
Name                                 Name
_______________________ __________________________
Title                                   Title
_______________________ __________________________
Date                                  Date



i Any part of this agreement can be changed or overridden based on your needs
ii This date will give us information as to when this agreement was written and distinguish it from similar other agreements.
iii Fill out the company name here
iv Fill out the payee's full name here
v Enter the start and end date for the sales commission plan effective period. Most companies use the calendar or fiscal year start and end date for these values.Some companies may not have an end date specified.
vi Alternatively you can remove this section or rephrase it such as Base salary is specified in a separate employment agreement.
vii Targeted sales compensation for the full year
viii Search for current IRS mileage rate
ix You can put any amount or you may completely remove it or change based on your needs
x Percentage can be changed according to the agreement of the parties
xi Percentage can be changed according to the agreement of the parties
xii Percentage can be changed according to the agreement of the parties
xiii You can changed or alter the expenses based on the companies needs
xiv The weekly draw amount can be changed or altered accordingly
xv This agreement can either be changed or altered or completely removed if not necessary