You’re here because you found yourself doing research into the Coldwell Banker commission split. Maybe you’re a new real estate agent looking for a sponsoring broker. Or, perhaps you’re an experienced agent looking for change.
Coldwell Banker is a well-established real estate franchise company that is owned by Realogy (the same parent company that owns Century 21). With its well-known brand name and tech tools, they can be an excellent place for new real estate agents and those with experience.
At last count, there were about 92,159 real estate agents around the world that called Coldwell Banker home. Let’s look at the commission structure of Coldwell Banker.
What Is The Coldwell Banker Commission Split?
It varies. Coldwell Banker commission splits vary between branch offices within the franchise system. Meaning, a Coldwell Banker in California can have a radically different commission structure than a Coldwell Banker in Michigan.
However, if you gather input from hundreds of agents within the franchise system or who previously worked for Coldwell Banker, then you can start to form a “typical” commission split.
Coldwell Banker’s commission structure is considered gradual, where agents can grow and improve their splits with more experience or as they sell more homes.
For example, it’s common for new real estate agents to start out with a 50-50 commission split arrangement. In this case, 50 percent of the money from the sale of a home goes to the broker and another 50 to the agent.
After a certain number of years of experience or selling a certain number of homes, a real estate agent will move up to a 60-40 split or a 70-30 split.
The exact benchmarks for moving your commission split up are dependent on each Coldwell Banker location. You will need to talk to the one you’re considering, if you want exact details.
I know of high-producing agents within Coldwell Banker that had 90-10 commission splits. Of course, this is likely far from normal for most Coldwell Banker agents. However, I mention it because it’s possible to get your commission to a very favorable split.
So, what can you expect? I would expect to have a commission split that is on the lower end when compared to other sponsoring brokers. If you’re a new agent or within your first three years, you can expect to have a split around 60-40.
Coldwell Banker Cap Structure
It’s uncommon for Coldwell Banker to offer a cap structure. A majority of offices will not offer a cap, where you no longer pay the broker commission for hitting a certain level of production.
However, it’s really important to do your research in your local market.
There is a Coldwell Banker office that deviates far from the standard Coldwell Banker commission split model. Instead, they start their agents at an 80-20 split and have a $15,000 cap. After that, the agent moves to a 100% commission split.
But, this Coldwell Banker also only hires experienced real estate agents that have proven results and are high-producers.
Coldwell Banker Real Estate Fees
The fees you are charged at a Coldwell Banker office is highly dependent on your specific location. However, they are within industry standards.
When I first started out at Coldwell Banker, I was charged $125 a month. This total amount paid for office rent, a phone, E&O insurance, and a few other items.
There were some extra fees for various items, like if I wanted to print in color. That was one-dollar per page.
Your fees could vary from this. Some Coldwell Bankers don’t charge fees. Others charge far more than the fees I had.
What Do The Commissions Pay For?
The portion kept by Coldwell Banker is used to cover all sorts of costs — marketing, technology, office overhead, employee salaries, franchise fees, training and more.
Coldwell Banker invests the most amount of money in tools, technology and training for its real estate agents. It’s goal is to support real estate agents at a high-level, and that costs money.
There is a general rule with commission splits. The more support, the lower the split to the agent.
The upside to this is that you will have access to tools and training at a far cheaper price than if you purchased these items on your own.
However, if you don’t know how to take advantage of them, then you’re not really able to benefit from them. Instead, they become a cost to you and don’t drive any real value.
You will be paying high commission fees for tools and training that you don’t use.
It all comes down to whether the training, tools, and marketing will help you offset the lower commission splits.
Downsides To Coldwell Banker Commission Split
The downsides to Coldwell Banker commission split structure is the expense and the favoritism or inequity that occurs.
First, a new agent’s biggest goal is to minimize cash going out and increase cash going in. Coldwell Banker doesn’t do much in minimizing cash going out. Most agents have various fees they need to pay.
And, the company also doesn’t optimize cash coming in. At an average home value of $240,000, a ten percent difference in commission split is $720. If you sell five homes a year, a ten percent difference is $3,600 per year.
Since Coldwell Banker sets up agents around 50-50, but there are companies like Exit Realty splits at 70-30. The 20 percent difference represents $7,200 per year.
That’s a significant amount of money to leave on the table in your first year. Especially considering the average first year real estate agent only earns around $15,000.
Second, you will see some favoritism and inequity in the system. Since Coldwell Banker’s commission splits are lower than other places, you will often see managers deviate from the commission model to keep agents.
However, there are no rules or standards. So, one agent might get a better split with the same production just because the manager likes them more.
I’ve seen it before. When I was with Coldwell Banker, I knew an agent getting a 90-10 split while an agent with similar production was only getting an 80-20 split.
In comparison to a company like Exit, there is a clear model for rewarding and incentivizing top-producing agents. After $100,000 GCI, agents will move to a 90-10 split.
It’s not politics or favoritism. Nor about who the manager likes that day. It’s about results. To me, that creates more fairness.
How Exit Compares
Exit Realty offers a lot of the similar support as a company like Coldwell Banker, but more favorable commission splits with defined guidelines to reduce favoritism.
Exit Realty offers all new agents — new or experienced — a 70-30 commission split. Once an agent hits $100,000 gross commission for the year, the split becomes 90-10.
On top of that, Exit Realty offers an additional revenue stream. When you sponsor agents into the company, you could earn a percentage of the gross commission that is produced by your sponsor. It’s called the Exit formula.
This creates an opportunity for real estate agents to grow their income without selling more homes and working more hours. They can earn more money while working less.
