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Agents must adapt to changing landscape with sales staff

May 27th, 2013 by Geoff Baldwin

Rather than resent the fact that commission splits for salespeople have risen in recent years business owners need to accept this changing landscape and adopt sustainable business models to ensure win-win outcomes for all players according to RE/MAX WA Managing Director, Geoff Baldwin.

“In 1987 when I kicked off my career in real estate 40 percent of the gross commission (with exceptional results recognised with bonuses at 50 percent) was the accepted norm throughout the Industry however today we work in a completely different environment”, Mr Baldwin said.

“Although new salespeople willingly accept a lower commission scale once they hit their straps and are enjoying consistent settlements they are inevitably tempted by the availability of higher commission splits from either within their current office or from other agencies.

“Instead of continually swimming against the tide business owners should be accepting that their salespeople will want to be recognised for their increasing success and set in place commission structures that not only enable this but that also ensure profitability is maintained.

“Salespeople who start at an office understanding that they will be financially recognised for their success through consistent, easy to understand and achievable commission models are much less likely to move and this also negates the probability of having to negotiate one off deals that can often backfire.

“It is very hard to argue when salespeople say that their results come, in the main, from their own hard work, community profile, marketing, proactivity and skills more so than any brand or from the efforts of their office, hence they have a right to expect a percentage of the commission on each deal they settle that recognises their input.

“Obviously commission structures should take into different levels of performance, must be sustainable for all concerned and must take into account fixed and variable costs however fair, generous, preset pay structures are a critical component of staff retention in our Industry today”, Mr Baldwin said.