Closing agreements is only one aspect of being a real estate agent; another is understanding how those deals convert into cash. Gross commission income is one of the most crucial financial indicators you will ever monitor in your company. Knowing this figure is essential if you want to increase your income and take charge of your financial destiny.

This blog post explains what gross commission revenue is, how to compute it, and—above all—how to steadily raise it. Let's get started.

In Real Estate, What Is Gross Commission Income?

Before costs, brokerage splits, or taxes are subtracted, it is the whole commission you receive from real estate transactions. This figure is your primary source of income and serves as the cornerstone of all of your real estate financial strategy.

This figure indicates how much revenue your company is making. Although it's not your take-home income, it does show how much you're making before operating expenses are deducted. And kindly remember to take those into account. In addition to taxes, you also need to account for your split with the other agency.

Although this may sound straightforward, knowing what GCI means is the difference between creating a long-lasting, sustainable company and becoming mired in a cycle of wealth and poverty every few months.

The Gross Commission Income Calculation Process

The equation is straightforward:

Sales Price × Commission Rate equals Gross Commission Income

Assume you receive a regular 2.5% commission when you sell a $500,000 house:

$12,500 is the gross commission income (500,000 × 0.025).

This is your gross commission income before any business expenditures are deducted or before anything is divided with another agent, your broker, or your team. Before taxes and operating expenses, you would receive $8,750 if you were on a 70/30 broker split.

Knowing this formula enables you to establish specific financial objectives. Based on your typical sales price and commission rate, you will know just how many homes you need to sell if your goal in GCI this year is $150,000.

After learning the fundamentals, let's question what gross commission income real estate agents should aim for and how to get it.

Steps To Raise Your Gross Commission Salary

Let's begin by delivering the terrible news. After splits and expenses, the typical real estate gross commission revenue per year is less than $40,000. That explains why so many people own a real estate license.

The good news is that real estate agents can increase their gross commission revenue. This implies that if you wish to increase your GCI, you have a number of levers to pull. You are in charge of your money in this field, and hundreds of our coaching clients have shown that you can make millions of dollars if you execute the appropriate strategies.

Even if the following list to boost your gross commission revenue can appear straightforward, keep it in mind at all times.

1. Complete Additional Transactions

More is more. It's easy to understand, yet some agents don't seem to grasp that increasing your marketing and prospecting efforts leads to more deals. Start by increasing the variety of your lead sources and refining your prospecting efforts. It's time to expand your search beyond your database to include web leads, open houses, FSBOs, and expireds.

2. Aim For Higher Price Points

You can make more money per transaction by selling more expensive homes without having to put in more effort. To draw in luxury clientele, you might need to increase your marketing efforts or broaden your market.

3. Discuss Better Splits

It might be worthwhile to renegotiate or consider alternative brokerage options if your split is significantly skewed in your brokerage's favor.

4. Make Marketing And Branding Investments

More clients result from increased visibility. Agents that maintain a steady brand presence across several platforms, particularly social media, typically experience faster growth. Increasing visibility and listings requires a strong real estate marketing plan.

5. Hire A Coach In Real Estate

Real estate coaching is without a doubt the most effective strategy to boost your commissions. The structure, responsibility, and professional insight that coaching offers will help you avoid wasting money and accelerate your success. Every year on average, real estate agents who receive coaching report greater average gross commission revenue.

Crucial Information Regarding Commissions

The commission is negotiated and not fixed. Percentages can change depending on the market and circumstances. Here are a handful of them.

Sides Of The Buyer And Seller

Depending on whether you are representing the buyer, the seller, or both, you will receive varying compensation percentages. Although it could increase your GCI, double-ending a sale isn't always the greatest course of action for enduring recommendations. Although 2% to 3% per side is the typical range, don't be shocked if you have to haggle to maintain your competitiveness.

Brokerage Fees & Splits

There is more to it than your total commission. Whether it's a % or a fixed charge, be aware of what your brokerage deducts, and account for other business expenses like lead generating tools, marketing, and transaction coordination. There are:

60/40, 70/30%, and 80/20%

If you're bringing enough to the table, you could even be able to negotiate 100%. Your leverage will increase as you get more experience.

Recognize The Direction Of Your Commission

This is where a lot of agents fall short. You cannot understand your business if you do not know your net income after expenses. Analyze each dollar of your gross commission income from real estate transactions to determine its direction. Monitor it every month. Establish spending plans. Don't treat your business like a hustle; treat it like a business.

Utilize spreadsheets, budgeting software, or your CRM to keep track of:

• Commissions received
• Brokerage divisions
• Costs of marketing
• Fees for transactions
• Investments in businesses
• Knowing your numbers gives you the ability to increase them.

Ways To Ensure Higher Commissions

One thing should be obvious if you've read this far: gross commission revenue is much more than just a figure. It provides insight into the state and prospects for expansion of your company. Furthermore, while knowing your GCI is crucial, how you apply that knowledge to advance is what counts most.

The final line is that you shouldn't attempt to raise your income on your own. It is rare for the agents who guess to be the ones with the highest average gross commission income in real estate. They have a plan in place. They are monitoring metrics. They also receive coaching.