How do commercial teams at brokerages break out splits?
My partner and I are currently in the process of hiring another teammate and need to readdress our team splits to make room for the new person. I'd love to get some input on how other teams have been doing it and how well it works to keep everyone motivated (and avoid bitterness).
[{"id": "f0lrss4", "text": "This is a very good topic. No matter what splits you decide, they should be crystal clear, definitive, and agreed upon by everyone. \n\nWhen I was a Jr broker on a team, we didn\u2019t have clear splits, and it meant we would all argue every time we had a closing. \n\nNow I have a Jr broker working with me and we define our splits as follows:\nIf the deal is sourced by Jr Broker, he gets 45% and I get 55%.\nIf I source the deal, Jr Broker gets 20% and I get 80%.\n\nSo far Jr broker hasn\u2019t sourced a deal yet but definitely has made effort and sourced deals that will close. It\u2019s investment sales so really long cycle. We\u2019ve closed 7 deals so far this year and on some, he\u2019s taken a huge share of the load to earn his 20%. On others, he hasn\u2019t had to do so much but in all cases, we stuck him getting 20%. He\u2019s made ~$50k this year so he\u2019s happy.\n\nI am curious how other teams do it. I cover all marketing, office, and support expenses. That includes flights/hotel to conferences, our office rent, Loopnet, CRM, data services, etc... Sometimes I feel like I give up too much, sometimes I feel like I should offer better splits. What do you think? How dies your team do it?", "replies": [{"id": "f0ls8jn", "text": "This is a very good response and similar to how I see most teams structure. Seniority and experience obviously play a role but your splits seem accurate for a junior.", "replies": [], "depth": 2}, {"id": "f0m3bv6", "text": "What CRM software do you use btw? I\u2019ve been looking at salesforce and apto", "replies": [{"id": "f0o42ae", "text": "ClientLook... it\u2019s kinda shitty right now", "replies": [{"id": "f0oeyot", "text": "This is what we use and I hate it.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "f0m6frn", "text": "Thank you for your response. Our splits are:\n\n10% to the team expenses\n\n10% to the team leader (partner)\n\n44% to Senior Broker (partner)\n\n36% to Junior Broker (me)\n\n\nI think we're keeping this same format with adding the 3rd person with some deals with me being the Senior and the new person as the Junior on certain deals and other times my partner would be the Senior and me and the new person split the Junior cut. While this sounds like it could work, I'm trying to avoid times where we may put in a lot of time and effort for a deal and me and the new person get 18% each. I know in the long run there could be times where I hardly do anything and the new person does more and I'd be happy with the 18% and vice versa. Overall the goal is to earn our share and stay motivated to do more business together and grow as a team instead of as individual brokers.\n\nThoughts?", "replies": [{"id": "f0o43y3", "text": "If you source a deal, you should get more than 18% imo", "replies": [], "depth": 3}], "depth": 2}, {"id": "f0ma79g", "text": "Good decision, better to \u2018fight\u2019 once as opposed to every time a deal comes  in.", "replies": [], "depth": 2}, {"id": "f0mas40", "text": "Is the team 50/50 with the firm?\n\nEdit: agreed this is a good topic.", "replies": [{"id": "f0o3o1q", "text": "No, we pay ~25% to the house", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f0luymu", "text": "My team reserves a portion of our split for a \u201cbonus\u201d that\u2019s performance based. So for example we split every fee between three of us 35%, 15%, 35% which leaves 15% to allocate. That is broken into three 5% bonuses which are origination (who brought the deal), production (who oversaw the proposal, financial analysis and marketing material creation), and execution (who worked it / brought in the buyer). This gives a bit of flexibility that I found is fairly effective in reducing bitterness.", "replies": [], "depth": 1}, {"id": "f0mhzqn", "text": "I hired a junior broker and decided to go 50/50 on any newly generated business with the understanding I may or may not pull him into existing business I had prior to our partnership.  This works well for us.  His job is to dig up new business, set appointments, and be the eyes and ears on the street.   I handle all the back-end issues, have the bigger client discussions, handle more of the problems, etc.  \n\nI will admit that it was the deal of lifetime for him.  No other senior broker would make that deal.  But I believe the junior broker needs to be incentivized as does the partnership.   When I was a junior, we'd split the commission AFTER the deal was done.  And the conversation always started with \"well, what do you think you earned on this deal\"...  it's the worst possible way to maintain a relationship and I got out of it as soon as I could.", "replies": [{"id": "f0n237u", "text": "Wow, what I would have done to start working under you haha. I was on a team of 3 and when I sourced it I got 40% and then my other 2 partners got 30% each. I wasn't brought into any existing business so didn't get any piece of that pie. \n\nWhen I got my first commission check with the house taking their cut of 50% I realized quickly how tough that commission check actually can be to get.", "replies": [], "depth": 2}], "depth": 1}, {"id": "f0mtmn9", "text": "Make them an unpaid intern. Then have them walk around the office with a tip jar at the end of the day.", "replies": [{"id": "f0obsjk", "text": "Is this forreal?", "replies": [], "depth": 2}], "depth": 1}, {"id": "f0mvl5j", "text": "You\u2019ll never avoid bitterness so equal splits are the best and then review them yearly to see who\u2019s pulling their weight.  There\u2019s some great feedback and best practices in this thread though, so remember to do what\u2019s fair for your team dynamic and situation.  The junior broker always gets screwed because we bring them in to do the hardest part of the job, which is to dig up new deals.", "replies": [], "depth": 1}, {"id": "f0n1y9x", "text": "Jesus, some of these noted replies are just demoralizing as I've always been one to want to prove my worth, thats why I left the corporate world.\n\nI'm 3 years in and specialize Mulitfamily Investments as my bread and butter (Though I'm typically a generalist - taking on most of what I can catch myself). \n\nI've sourced and worked over $12mm in gross sales, mostly by myself - Broker couldn't be more happier letting a newly creative, self-determined, risk taker find and work most of my deals myself. Now a days I rarely have to split a fee with a Buyers side because I know all the key contacts who want to buy what I find/bring to market/off-market. I still require some guidance as I dont know it all, but all my colleagues are available if I have any questions.\n\nI have complete free reign in my office to come an go because they see my activity consistently generated throughout the year.\n\nI couldn't imagine having my creative process stifled by being someone's underling the whole first couple of years, though I do appreciate getting to learn more about how to appeal more to a corporate or C-Level Exec in a conversation, and to back it up with analysis work. I've never been afraid to have a conversation.\n\nThat being said, unless we refer a lead to someone else, most transaction are split equally between the sides of each transaction, and equally spilt between those members of the brokerage.\n\nI'm with an NAI office in the Midwest.", "replies": [], "depth": 1}]