Alternative Compensation Models: Quick Math

Alternative Compensation Models: Quick Math

by Glenn Freezman

A large part of what I think about every day is how our industry can create new models that are fair to both home buyers and the agents who serve them. For me, alternative compensation models are creating a doorway that allow agents to do a better and more fair job of representing their home buying clients while still getting paid in a manner that is respectful of their professional status and the hard work that they do.

Alternative compensation models are basically real estate agreements that allow money to be shifted in a different way. For example, if an agent were to take the money that was earmarked for their commission payment at the closing of a deal and put it on the table as a refund or rebate for the home buyer do you think that would get the buyer's attention? Of course it would. However, the average Realtor isn't in the business of working for free (at least not on purpose!) so this agreement also means that in exchange for that possible rebate, the home buyers need to pay their agent directly for his or her time and assistance on an hourly or task based agreement and that if they make it all the way to the closing table then the refunded commission goes back in the buyer's pocket to cover closing costs or anything else.