What is a fair commission split with a mentor in commercial real estate?
New agent. Researching different commercial real estate companies to join. One of the companies I interviewed with wants me to sign an additional contract that would allow my would-be-mentor 50% of the gross commission of any deal done during the first year. After the mentor takes 50%, I would still need to pay % to broker and agency. I would end up getting about 25% of the gross commission during the first few deals.
Is that a fair commission split with the mentor? What is "normal/standard" commission split with a mentor for a new agent?
[{"id": "igya1zz", "text": "Are they also bringing you on to some of their deals?", "replies": [{"id": "igydbmz", "text": "No... they are not bringing me any deals.", "replies": [{"id": "igzohrg", "text": "Then I would maybe ask for an option at six months to walk away from this and go to a normal split. As unfair as that deal sounds on one hand I often times suggesting that new brokers partner on most of their deals with a more experienced broker the first year so they can learn the business. With that said if you become comfortable with basic leases six months in I don\u2019t think you should be locked in to having to partner on a crappy little lease when your paycheck already is only going to be 1000 bucks. Not to mention the broker helping you isn\u2019t going to want to put any effort into that deal because it\u2019s not worth their time. When you start out you\u2019re generally trying to generate any and all business, do you think that mentoring broker is going to want to go show 1500 ft.\u00b2 office spaces with you? So in short, I think it\u2019s in your best interest to Partner is somebody more experienced on most steals your first year however I would not want to be locked into that agreement on every single transaction.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "igyg1qh", "text": "Zero", "replies": [], "depth": 1}, {"id": "igyojny", "text": "Every company is different, but if said mentor is not bringing you in on ANY deals, 50% is a HUGE cut. Is there any potential of you being brought in on deals on the future?\n\nWhat is this broker's pipeline like? Do they run a team? \n\nFor me, if I were to give half of all my deals away with 0 involvement on their deals, my mentor better be a top dog in the market/asset I want to work in.\n\nHappy to chat more in DMs. I just recently switched firms.", "replies": [{"id": "igyr94r", "text": "Thanks! DMed you", "replies": [], "depth": 2}, {"id": "igznwzd", "text": "Agree with this. Also when you negotiate the future deals you are brought in on, make sure they are good deals. When I was in brokerage (albeit an analyst) I saw many juniors get brought in on the stale/dead listings that were not going anywhere.", "replies": [], "depth": 2}], "depth": 1}, {"id": "igzqmze", "text": "At a mentorship deal 50/50 split is not bad.. you bring in a deal from prospecting and they coach you throughout the whole deal process and answer any questions you might have. Not a bad deal for starting out. My brokerage does 50/50 split at mentorship level and then accelerates to 60/40 and then 70/30 as your experience and deal pipeline progress", "replies": [], "depth": 1}, {"id": "ih1ruvy", "text": "50/50 is great. When I started I was paid a small salary by my mentor (barely anything just enough to keep a roof over my head) and my split was 30/70", "replies": [{"id": "ih23404", "text": "You got hosed. 50/50 is not great if you are not bring brought onto your mentor\u2019s deals.\n\nIf your mentor is a very good broker and is going to win you business, you might be able to deal with it. But based on the fact that they wont bring you on for even 10% of their deals, they probably dont do as much business as you\u2019d think.", "replies": [{"id": "ih2613b", "text": "I brought very little to the table in the beginning so it did not bother me. Just wanted to learn", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "iiz2rgl", "text": "I have a pro partner agreement where my mentor takes 50% of my first two sales and I still have a 55% even split with my broker. My mentor has me doing her work for me as far as showings, inspections and appraisals. I quit my job to work as an agent full time. I have no income and my mentor will not pay me anything to do all her work for her and I'm not being brought on any deals. If I get a referral from her I have to give my mentor 25% plus the 50% since it's my first deal and then pay the broker as well.", "replies": [], "depth": 1}]