RE/MAX or Real Estate Maximum is an American / International real estate company. It is considered as one of the highest selling real estate companies in the world and the second-highest in America.
There are different models or plans that a realtor can choose to follow when they work for an agency apart from the initial installation cost and other fees. If you’ve come across RE/MAX and are wondering what is RE/Max commission split for agents then this article is exactly what you need.
RE/MAX provides a maximum of 95% to agents based on a 95/5 split. But that split is only for advanced agents that have a higher sales volume and an established base of business. The company also has other commission plans for lesser performing agents.
If you’re a realtor or a potential agent who is looking to work for RE/MAX, we’re happy to let you know that we will talk about those plans here in more detail.
Whether you are an established realtor with potential buyers and sellers, or one that has been in business for any period of time, RE/MAX has both kinds of plans that can support you. The company has 2 main commission plans for their agents to choose from.
95/5 Split (Highest Split for a Desk Fee)
The agent who chooses this plan are put onto the highest split that Re/MAX has to offer.
The company keeps 5% from the sale’s gross commission, which is also referred to as the corporate marketing fee, while the agent earns the remaining 95%. The company uses this fee to pay for the advertisements and national IDX search link up system. In return for this model, an agent has to pay a certain desk fee to RE/MAX.
The agent also benefits from a space in the regional office, paperwork, and marketing help besides being able to use the well-known RE/MAX brand name.
The desk fee may differ from office to office. Some agents and companies choose to look at just the commission split. Other look at the split and the amount of desk fees that are paid out. When you factor in both calculations, the RE/MAX commission plan is comparable to other companies. When an agent is considering the 95/5 plan, he or she will also need to budget for the negotiated desk fee.
If you’re wondering about the fee, desk fees can range from as low as $300 to as high as $2500 monthly, even if you don’t have any transactions that month. It really depends on which benefits the agent is asking to enjoy; it can be an office spot, advertisements, broker fees, business cards and so on.
All the agents in this company get the chance to earn from the highest split plan at some point of the year. It happens regardless of what plan they are following currently. Agents on a lower plan may feel a sense of unfairness for the people working there that are on the higher split.
This commission plan is what has mainly made RE/MAX so well-known, popular and eventually successful with experienced and established agents.
Agents who choose the 95/5 plan; realize the benefits of paying a monthly desk fee in return for the high pay-off. Thus, they have to budget it accordingly.
However, an agent must choose this plan only when they know they will have enough sales volumes per month so that the monthly fee is worthwhile. For other realtors, there is always an alternative plan.
The RAPP (RE/MAX Alternative Payment Plan)
In response to other companies that offer commission plans without the steep monthly desk fees, RE/MAX created the RAPP programs. This plan is ideal for agents who are hesitant to pay a monthly fee before becoming established yet. All of the office costs in this plan are put into a limit or a so called threshold. This is then paid out via commissions throughout the year. (The company refers to it as a CAP, yet it is not a CAP in the true meaning of the word, because the 5% corporate fee is charge on every transaction, even after the threshold is achieved.)
The only monthly expenses the agent needs to pay are the miscellaneous and personal expenses. For example, print bills or online marketing bills. Depending on the office, if the agent does not participate in the online marketing bills, their listing may not receive the same level of promotion in print or online advertising as agents that do pay the monthly marketing fee. Again this varies from office to office.
This RAPP system gives space in RE/MAX for everyone, including successful realtors and those who are still struggling or require marketing and the brand name.
This commission plan has 3 subdivisions of separate commission split plans that depend on the previous year’s commission. A soft threshold is in place and agents move towards the 95/5 plan as they reach the threshold.
The 3 RAPP sub divisions are:
Where the agent to company share is 80/20 split in commission until the agent reaches a $23,000 commission threshold.
Where the agent to company share is 70/30 split in commission until the agent reaches a $23,000 threshold.
Where the agent to company share is 60/40 split in commission until the agent reaches a $23,000 threshold.
This is just the starting split for the agents who are grossing below $25,000! This is where their journey as a successful agent begins.
The company moves the agent towards the 95/5 commission plan for the rest of the year, as soon as the limit is reached by an agent in any plan. Meaning that the cap is not an overall cap, because the company will continue to take money out of every transaction for the remainder of the year.
Here we will talk about the whole process of splitting up the commission with RE/MAX after a property sale in more detail.
At first, a percentage of commission is paid as the royalty or fee to the RE/MAX region which is CCA. CCA refers to the Caribbean and Central America. Part of this percentage is paid to RE/MAX headquarters, which is the global headquarters for Denver, Colorado.
The remaining commission is then split into 2 equal parts. One is for the listing side and the other is for the side that has bought the buyers.
From this remaining commission, the listing side will get a certain percentage and the buying side will too. But this percentage will depend on their own or personalized split plans.
For example, if the listing side has chosen a 70/30 split plan, they will receive 70% from the half of the remaining commission. If the buying side has a 60/40 split plan, they will get 60% from the other half of the remaining commission.
The office of RE/MAX will, thus, take 30% from the listing side’s commission share and 40% from the buying side’s commission share, according to the example plan stated above for both sides. The amounts from these two percentages combined give us the share of the commission that RE/MAX keeps.
These specific percentages are determined by RE/MAX and can be different for different plans.
Franchises usually have expensive fees. In the case of RE/MAX the fees are not limited to just these; a $138 management fee per month per associate, an annual fee of $410 per associate, a promotion cost of $131 per month per associate, a renewal fee, and lastly hot air balloon fund fee.
If you’re looking for the initial franchise investment, it should be around $38,000 to $219,000 that consists of office setup expenses, supplies and inventory, signage, and other miscellaneous opening costs.
Most of these costs or rates can be determined and updated by the Brokerage Company or Franchise.
The franchise also asks for a liquid cash requirement of $35,000. But there is in-house financing for the initial franchise fee, which may range from $17,500 to $35,000.
Other fees for the office and other services can be negotiated between the agent and the broker. Because it depends on a few factors, such as how much office space the agent will take up or exactly what benefits the agent will be provided with and so on, these costs can vary.
A lot of realtors have reviewed that RE/MAX gives a degree of marketing and reputation support. The company provides the some flexibility in the commission structure with the different plans.
We really hope that you have found the answer to your question “What is RE/MAX commission split for agents?” By now you should be able to understand the share and the whole process of commission splits throughout the buying and selling procedure with RE/MAX.