How To Negotiate Your Commission

When you are young, you know everything.

You know how to sync your phone to your computer to your wifi to your wearable to your coffee maker. You know how to torrent movies. You don’t have to eat top ramen every night. You have a savings account. You are very confident. You are dipping your toes in the world of adulting and all you can feel is sweet, sweet freedom. You are not humble. You are invincible.

My bulletproof ego is one of two things that compelled me to march into my broker’s office and ask for a higher commission split before I had ever even sold a house. That and my instinctive need to compete.

More than anything, I was jealous that my buddy was sporting a 60/40 commission split when I was offered was a measly 50/50.

Being a young and invincible Realtor, I naively assumed I could just ask for a raise.

Why? Because fairness! Because equality! Because how dare someone who had the same non-existent experience get more than me! Because I’m a sucker for competition. Because sometimes I was still eating top ramen when I wanted to be eating lobster.

What would you attempt to do if you could not fail? You would walk into your boss’s office and ask for a raise, that’s what you would do.

There’s a certain tenacity that comes with not being afraid to fail. For instance, I can run up 10 flights of stairs without passing out. I can watch an entire season of House of Cards in one weekend. I can eat a whole pizza. Sometimes all you need is faith.

And other times you need leverage.

What happened when I walked into my broker’s office and flat out asked for a raise? He probably wanted to laugh in my face but instead he simply said, “Tyler, why don’t you sell some sh*t.”

So I sold a few homes. I began building a database and started to get referrals. I went back to my broker and I told him the good news. I showed him something that vaguely resembled a business plan and I asked him for a higher split. Again, he said, “NO.”

I was so frustrated! So I sold more homes. I got better. I grew my database and I developed my business plan. For a third time, I went back to my broker and showed him my progress, but this time I had a few goals. I asked him what I could expect as a commission split if I met my goals. And that’s when he started wheelin’ and dealin’ with me. It wasn’t huge, but it was exactly the motivation I needed to keep going.

If you are going to try to negotiate a higher commission you must have a business plan. Within your plan you have to have a marketing plan. You have to estimate how many homes you are going to sell. You have to know your closing ratio.

Go in prepared to show what you’ve accomplished and what you hope to accomplish. Make your goals realistic and achievable but also challenging. Show that you are going to work hard. A good broker is going to want you to grow and be successful.

If you are in a low commission split and your broker isn’t jonesing to raise it, then you need to either…

a) Find a better broker – someone who is going to give you better value or a higher commission split


b) Take the low split… but use the resources that your broker provides to grow your business. That’s what you’re paying for! There is often great value in brokerages that have lower commission splits. They may provide training opportunities, help with marketing or administrative assistance; all which would cost you quite a bit if you had to spend your own dough.

I’ll leave you with this:

All that time you are spending trying to figure out how to leverage your commission, without any evidence that you deserve it, you could use instead to hustle and close deals.

And when you hustle and when you’re closing deals and when referrals are spilling in, that’s when you can go to your broker and say, “Voila! Look at the deals I’m doing! Look at the deals I’m planning on doing!”

Make no mistake, I’m pro-Realtor but you have to work hard to get paid big.

Now get out there and MAKE. IT. HAPPEN.