BAM Key Details:
- On September 6, Real Brokerage announced changes to its revenue share in a company call.
- Changes include easier access to Tier 2 of the revenue share model and an Agent Accelerator program.
During a company call today, Real Brokerage President Sharran Srivatsaa announced changes to its revenue share model. The new offerings will help agents unlock revenue share earlier in their careers at Real.
The changes, which make it easier for agents to earn more, come after fee increases for agents, which were initiated earlier this year. In February, the technology-powered brokerage raised fees for incoming agents from $149 to $249, and in April, raised annual fees for tenured agents from $500 to $750.
Changes to Real’s Revenue Share
Real offers five “tiers” of revenue share for its agents. Each tier gets unlocked as agents bring on more Tier 1 agents. On September 6, Real made announcements regarding its current revenue share model.
The first change lessens the number of agents needed to unlock Tier 2. Up until today, agents needed to have 10 qualified agents on their front line to unlock Tier 2. Now, agents only need five other agents to unlock the second tier—the same requirements eXp has for its agents.
Srivatsaa noted this change increased the number of agents who unlocked Tier 2 by over 250%. In addition to helping more agents gain access to profit sharing, it will help with recruiting.
This move makes it easier for the average agent to participate in rev share in a meaningful way. And more people participating in revenue share means more growth for the company.
The second change is a program called Agent Accelerator, an opt-in program designed for agents in Tier 1 who want to grow their network and unlock all revenue share benefits. Agent Accelerator is run by Real leadership and top agents within the company, who will teach agents how to attract “the right way.” Agents will remain in the program until they bring on their 5th agent, the key that unlocks Tier 2, and they will then graduate out of the Accelerator.
I’ve found leadership at Real is always looking for ways to give agents more opportunity. This shift is going to encourage the collaborative culture we have even more.
Real offers up to 60% of its revenue back to its agents. At its core, revenue share is a gesture of a company’s appreciation for its agents’ achievements. Typically, it’s used for agent attraction, rewarding the agent who sponsors new talent to the brokerage. However, there’s often a cap on how much a company can share due to operational expenses. While many competing brokerages cap revenue share at 50%, Real is committed to 60% revenue share. Real expects the changes will not only help agents make more money but with agent retention as well.
A higher revenue share is possible, in part, because Real has a low overhead compared to traditional brokerage models. With no offices, and a tech platform that allows for a low employee count, Real is able to offer an 85/15 percent commission split in addition to its revenue share. The cap for agents’ commission payments remains at $12,000 for the year, after which agents pay a single transaction fee for each deal.
Will this lead to more growth?
After a reported $20 million loss in 2022, Real looked to 2023 to grow—both in agent count and in profits.
So far, the brokerage is seeing that growth. In the second quarter of 2023, revenue increased 65% year over year to $185.3 million, and gross profit rose 91% year over year to $17.8 million. In addition, the agent base more than doubled from a year prior, with a current count of over 11,000 agents.
With such impressive growth in the second quarter of 2023, the question now lingers: Will this momentum continue, driving more growth for Real Brokerage in the remainder of the year?