We have seen several different iterations of the “revenue share” model adopted in the real estate industry over the last decade such as Keller Williams who used a similar model to grow to be the largest brokerage in the world by agent count. Revenue share is seen as an alternative growth strategy for a company compared to the traditional strategy of spending money on advertisements in order to grow. The revenue share model offers additional advantages besides just growth such as providing its agents with additional streams of income, incentivizing a culture of collaboration, and creating a better new agent experience because every new agent will have at least 1 “sponsoring agent” into the company.
REAL Broker LLC Revenue Share Model Explained
REAL Broker has a 5 tier revenue share model where they pay the sponsoring agent up to $4,000 a year for an agent they directly attract to the company. The agents you directly attract would be considered in your “tier 1” and any agent that your tier 1 agents then go on and attract to the company would be considered in your “tier 2” and you would also receive up to $3,2000 a year for them. If your tier 2 agents attract new agents to the company, they would be considered in your “tier 3” and you would receive $2,400 a year for those agents. If your tier 3 agents attract other agents to the company, they will be in your “tier 4” and you will receive $1,600 a year from them and if they go on to attract another agent to REAL, that agent will be placed in your “tier 5” and you will receive up to $800 a year in revenue share from them as well.
Your tier 1 benefits and revenue share is immediately unlocked but in order to unlock the revenue share benefits of all 5 tiers, you need to attract a certain number of agents to your tier 1 position. In order to unlock the benefits of your tier 2, you need to have at least 10 producing agents in your tier 1, to unlock your tier 3 benefits you need at least 15 producing agents in your tier 1, to unlock your tier 4 benefits you need at least 20 producing agents in your tier 1, to unlock your tier 5 benefits you need at least 25 producing agents in your tier 1.
REAL Broker defines a “producing agent” as an agent who has contributed at least $450 in company dollars in the previous 6 months. So as long as they close at least 1 deal or even just one referral that leads to them giving REAL $450 or more, they are considered a “producing agent”.
In order to get credit for an agent in your tier 1, they need to list you as their “sponsoring agent” when they sign their Independent Contractor Agreement and join REAL.
The revenue share amounts where determined by a simple 5%, 4%, 3%, 2%, 1% model. Revenue share is taken out of the $12,000 cap each agent pays to REAL Broker a year. They pay this with an 85/15 split which means 15% of each commission is paid to REAL until they pay their full $12,000 cap and then the agent keeps 100% of their commission. Within that 15% paid to REAL, 5% of the commission goes to their tier 1 sponsor, 4% goes to your tier 2 sponsor, 3% goes to your tier 3 sponsor, 2% goes to your tier 4 sponsor and 1% goes to your tier 5 sponsor.
As you can see, this ultimately means that your entire cap to REAL could potentially be given back to the sponsoring agents above for them to help grow the company. Obviously, this would not be a sustainable model if the entire cap out of every agent went back to other agents and nothing went to the company. This is why you only receive your tier 1 benefits by default but need to unlock your tier 2-5 benefits.
A common question with this model is “What happens if an agent in your downline laves the company?” in that situation, REAL would assume their tier in your downline and you would continue to receive revenue share on the agent beneath them, assuming you unlocked those benefits. For example, let’s say an agent in your tier 1 position attracts several agents to the company and your tier 3, 4, 5 are filled beneath them. If that initial agent in your tier 2 leaves REAL, you still receive revenue share on the agents in your tiers 3, 4, and 5 that they were responsible for attracting to the company.
The Hidden Benefits of Revenue Share
This model at first may conjure memories of multi-level marketing companies in the late 90s or online pyramid schemes asking you to mail them a $1 bill but this model truly is neither of those things. This growth model is an alternative to traditional marketing and has numerous additional benefits to the company and the agents. Think of it as instead of a company spending $10M a year advertising to recruit agents, REAL is giving that same $10M directly to the agents responsible for helping grow the company. Not only is this model more efficient at growing a company but there are several additional benefits to it besides just growth.
In my mind, there are 3 main benefits to adopting this growth model over traditional marketing models.
- When a new agent comes into the company, at REAL they have up to 5 agents in their upline who are financially incentivized to help that new agent get adjusted to the company and be successful at REAL. Personally when I attract a new agent to my tier 1, I always hop on a Zoom call with them and give them an overview of how to use the different programs, where to find resources, and answer any of their questions. I don’t receive any revenue share on them unless they are successful and close deals so there is a financial incentive for me to help them in any way I can. Now, I’m a nice guy and would probably do that for many agents anyway, even not in my downline, but we all know that “every time you say yes to something, you are saying no to something else“. So with this revenue share model, it makes it far easier for me to say “yes” to giving 1-on-1 attention to the agents in my downline.
- Agents are provided with the opportunity for an additional stream of income as real estate agents through revenue share. Even if you just had a few people in your downline, that can provide additional income coming in which will help take the pressure off of a lot of real estate agents’ businesses. Many agents set the goal of getting at least 3 producing agents in their tier 1. By doing this, you are essentially paying for your cap through revenue share and essentially keeping 100% of your commission.
- Revenue share incentivizes a culture of helping, sharing knowledge, and collaboration. A lot of real estate companies talk about their “culture” but when you really evaluate what they are doing to implement and encourage that culture, it’s usually pretty lackluster. Maybe they will have a poster in their conference room with their core values on it, maybe they will make a Facebook video once in a while talking about culture…and that’s about it. REAL Broker has actually integrated financial incentives into its business model to encourage the type of culture they want to see. Through REAL Brokers stock program and revenue share program, the agents here have a financial incentive to share their knowledge, collaborate with one another, and help each other out in any way they can because as the saying goes “a rising tide lifts all boats“. When the agents in our downline succeed, we succeed, AND because so many of us own stock in the company, even when agents not in our downlines succeed, we all succeed.
Next Steps With REAL
For your free REAL Broker informational packet breaking down in more detail the fees, stock program, revenue share, Elite Agent program, and more OR to schedule a 1-on-1 zoom call with myself to see if REAL would be a good fit for you, email me at [email protected]
If you are ready to join and don’t have a sponsor yet, I would love to be your sponsor in the company at no additional cost to you and I will then have a vested interest in your success at REAL. When you sign your Independent Contractor Agreement (ICA), just put my name, Malcolm Lawson, down as your “Sponsoring Agent” and I will officially be in your upline!
You can join here https://www.joinreal.com/malcolm-lawson/refer
Or check out these other REAL Broker articles I wrote: