Hey there, agents! Today, we’re getting into one of the most important (and sometimes confusing) parts of your career: real estate brokerage fees. Whether you’re just starting out or you’ve been in the game for years, knowing exactly what fees you’ll be responsible for at different brokerages is key to making the best decision for your bottom line.
Today, we’re comparing real estate brokerage fees from monthly fees and errors & omissions (E&O) insurance to franchise/royalty fees, and transaction fees at brokerages like eXp Realty, Compass, Sotheby’s, The Agency, Berkshire Hathaway, and more. Here’s your handy dandy index:
Table of Contents
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Brokerage Fees Exposed: What They Don’t Tell You!
Real Estate Brokerage Fees
Let’s kick things off with a general overview of what real estate brokerage fees actually are. When agents think about real estate brokerage fees, they’re usually thinking of everything that comes out of their pocket.
That may be part of a commission split with the brokerage or a fee that gets tacked on annually, monthly, or when deals close. All of these fees have a direct impact on your take-home pay, and it’s crucial to know what to expect.
Some non-franchise brokerages are super transparent and consistent with their fees, which is a huge win for agents. These brokerages offer more predictability, so you’ll know exactly what you’re paying each month or per transaction—no surprises.
With the rise of cloud-based models, more brokerages are moving in this direction, making it easier for agents to plan their expenses.
Bad
Even with thorough research, it’s impossible to uncover every single broker fee out there. Why? Because many real estate brokerage fees vary from office to office within the same brokerage. This inconsistency is common in franchise models where individual real estate broker-owners have the freedom to set their own fee structures based on local costs and even personal preferences.
So, what you pay at one office might be totally different from what an agent at another office is paying—even within the same brand.
Ugly
Unfortunately, real estate brokerage fees—including commission splits—aren’t set in stone and can change. Brokerages may adjust their fee structures if they’re facing financial difficulties or if the cost of running certain services goes up.
When that happens, agents often end up footing the bill.
Avoiding the Ugly
While you can’t always predict when a brokerage will hike up their fees due to rising service costs, you can keep an eye on their financial health. Brokerages struggling financially are more likely to raise fees. So how do you check a brokerage’s financial status?
Real estate brokerage fees come in a few different flavors, and some are due upfront regardless of whether or not you’ve closed any deals. I’m not talking about your professional association or MLS fees—those are paid directly to those organizations, not through your brokerage.
Here, we’re focusing solely on what your brokerage charges you as an agent.
Some real estate brokerage fees are due upfront annually or monthly, which can be a pain if you haven’t closed a deal yet. But, many brokers ease the burden by charging some fees as you complete transactions. Agents tend to prefer this setup since the fees align with the cash flow of closing a deal.
We’ll start by breaking down the real estate brokerage fees you’ll be on the hook for whether or not you close deals, then move into the ones that can vary—sometimes upfront, sometimes taken out during transactions. Finally, we’ll wrap it up with fees which are typically only due when you complete a deal.
Real Estate Brokerage Fees Due Regardless of Income
These are often monthly fees, sometimes called desk fees, and you pay these real estate brokerage fees to your brokerage whether you’ve closed deals or not. They typically cover things like tech support, office space, and other resources.
eXp Realty
eXp charges a flat monthly fee of $85. This covers your cloud-based tech, CRM, training, 24/7 broker support, and access to a vast and ever-growing array of resources. Since eXp is a cloud-based brokerage, this fee doesn’t include a physical desk at a local office.
However, eXp does give agents access to 4,000 Regus business lounges worldwide, where you can meet clients if needed. Plus, eXp agents can even create their own custom virtual office to match their brand and meet with clients in the cloud. I know, it’s pretty wild, right?
The Agency, Berkshire Hathaway, Better Homes & Gardens, Douglas Elliman, Sotheby’s, Coldwell Banker, Keller Williams, RE/MAX, Compass
These brokerages have office-specific monthly fees that vary widely. Some may have no fee at all, while others can charge up to $2,500 a month.
From what we’ve gathered through agent reports and online resources like Reddit and Glassdoor, the most common monthly fees hover between $145 and $350. What does that get you? It varies, but typically it’ll get you a desk at your local office and access to the office’s amenities.
Real Estate Brokerage Fees Due Upfront or Per Sale
Now, let’s talk about Errors & Omissions (E&O) insurance fees. These real estate brokerage fees can either be charged per transaction or upfront annually, and they’re crucial because they protect both you and your brokerage from legal issues. How E&O fees are charged varies greatly depending on the brokerage.
Paying upfront for E&O fees can be a significant financial hit, especially if you haven’t closed any deals yet. All of the following results for these fees can vary according to location – except for eXp Realty which is always the same in every state.
Let’s break it down:
The Agency, Sotheby’s, Compass
At these brokerages, E&O fees are paid upfront annually, meaning you’re on the hook for the fee whether or not you close any deals. The typical range is from $1,900 to $2,200, due when you first join and every year after that.
Coldwell Banker, Keller Williams
These brokerages take a different approach by charging E&O fees monthly, which means you’re still paying upfront, regardless of your sales. Fees range from $122 to $350 a month depending on the location and brokerage.
The Agency, Berkshire Hathaway, Better Homes & Gardens, Douglas Elliman, RE/MAX, Refin
Unfortunately, we couldn’t nail down specific E&O fees for these brokerages. However, we know they exist, so if you’re considering joining one of these companies, make sure to ask about them when discussing your agreement.
eXp Realty
Here’s where things get really interesting. At eXp Realty, E&O insurance is charged per deal at a flat rate of $60. This fee is predictable, affordable, and capped at $750 per year. So, once you’ve hit that $750, you’re done for the year!
How does eXp manage to keep these rates so low? It’s all about the economy of scale. While most brokerages have individual state policies, eXp uses one national policy, saving millions in costs and passing those savings on to agents.
Real Estate Brokerage Fees Due Per Closed Deal
Let’s get into Franchise or Royalty Fees. These are real estate brokerage fees due when your brokerage is part of a franchise system. Here’s how it works: A global brand sells a franchise in the U.S., which then sells a franchise in each state, and further down to individual locations.
Each layer of the franchise structure takes a piece of the pie, and that slice comes directly from your commission.
Typically, these franchise fees range around 6%, meaning on top of your commission split, you’re paying this fee with every deal you close. And that fee gets spread across all those franchise levels above you.
eXp Realty
Good news here—eXp Realty is not a franchise, so franchise or royalty fees are $0 at eXp. That means you keep more of your hard-earned commission, which is a major plus for agents.
The Agency, Berkshire Hathaway, Better Homes & Gardens, Douglas Elliman, Sotheby’s, Keller Williams
These brokerages hit agents with a 6% royalty fee on every deal they close, or in Keller Williams case, until agents cap.
Century 21
Century 21 agents pay an even steeper franchise fee, coming in at 8%.
Coldwell Banker
Coldwell Banker’s royalty fees range from 5% to 6.5%, depending on the office location.
RE/MAX
RE/MAX agents are charged a 5% royalty fee on each closed deal.
Disclaimer
It’s important to note that franchise fees are tough to pin down, as many franchise brokerages aren’t upfront about these numbers. If you’ve worked at one of these brokerages and experienced a different royalty fee, drop a comment below and let us know!
Another type of fee that is charged on each deal you close is the transaction fee.
eXp Realty
eXp Realty charges a transaction fee of $25 per deal until you cap. After you cap and you’re earning 100% of your commissions with no brokerage split or franchise fee, then you pay $250 per deal for your next 20 transactions at which point your transaction fee is reduced to $75 per deal.
At eXp Realty, agents pay a $25 transaction fee per deal until they cap. Once you hit your cap and start earning 100% of your commissions, you’ll then pay a $250 transaction fee per deal for your next 20 transactions.
After those 20 deals, your transaction fee drops to just $75 per deal for the rest of the year. So while the fee increases post-cap, it’s a small price to pay when you’re keeping 100% of your commissions!
The Agency, Better Homes & Gardens, Century 21, Douglas Elliman, Sotheby’s, Coldwell Banker, Keller Williams, RE/MAX
All of these brokerages, with their steep commission splits and franchise fees, cut agents a break here by not charging an additional transaction fee.
Berkshire Hathaway
Berkshire Hathaway charges $295 – $625 per transaction, which admittedly seems out of line with all the other players we’re looking at.
That’s a Wrap on Real Estate Brokerage Fees
And there you have it—a solid breakdown of real estate brokerage fees across some top brokerages. From franchise fees to monthly costs and E&O insurance, these expenses can seriously eat into your bottom line.
If keeping more of your hard-earned money matters to you, a brokerage like eXp Realty with its lower, more transparent and predictable fees, is worth a closer look.
When you join us at Smart Agent Alliance, you’ll also be part of the Wolf Pack at eXp Realty. Together we are one big team and we provide more FREE value than you’ll get anywhere else in the real estate business.
Real Estate Brokerage Fees Compared For You! 4
What’s included? Access our exclusive SAA Vault Assets to enhance your business efficiency, attend weekly team video calls filled with invaluable insights and top agent strategies, and receive the Social Agent Academy Program and Investor Army Courses – a combined value of over $1,500 – absolutely free. And that’s just the beginning! Explore more about our robust team benefits.
Don’t let this opportunity pass you by. Transform your real estate career, maximize your income, and secure your future. Contact us now to schedule a video consultation or email us at team@SmartAgentAlliance.com. We’re here to ensure your success.
When agents think about real estate brokerage fees, they’re usually thinking of everything that comes out of their pocket—whether it’s part of a commission split with the brokerage or a fee that gets tacked on annually, monthly, or when deals close. All of these fees have a direct impact on your take-home pay, and it’s crucial to know what to expect.
What real estate brokerage fees do agents pay?
There are a variety of real estate brokerage fees charged to agents. Most charge a commission split for closed deals. Franchise models also charge a franchise fee on top of the commission split percentage. Other fees could be desk fees, tech fees, and transaction fees. All brokerages charge some form of Error & Omission (E&O) insurance fees.
How do real estate brokerage fees differ in structure?
The structures for real estate brokerage fees vary widely, with some brokers charging a fixed fee for a particular fee either upfront annually or monthly regardless of agent closed sales and others taking a percentage of the sale price for the same fee. Errors and Omissions (E&O) insurance fees are an example of wildly different brokerage fee structures. Agents need clarification of the structure of all fees at each brokerage.
Why do real estate brokerage fees differ between states?
While eXp Realty’s fees do not differ between states, most real estate brokerage fees differ between states and between offices within states due to variations in local markets, regulatory environments, and competitive pressures among brokerages. Each franchise office has its unique dynamics that influence fee structures.
Is it better to choose a broker with lower real estate brokerage fees?
Choosing a broker with lower real estate brokerage fees can save money, but it’s essential to consider the quality of service you and your clients will receive. A more experienced broker with a higher fee might offer better marketing strategies and negotiation skills, leading to a more favorable sale outcome.
Do real estate brokerage fees change?
Agents can’t predict when a brokerage will hike up their fees due to rising service costs, but agents can keep an eye on a brokerage’s financial health to indicate if real estate brokerage fees may go up at a particular brokerage. Brokerages struggling financially are more likely to raise fees. Look at publicly traded brokerages to determine this as those have transparent balance sheets. To dig deeper, check out our video: Exposed! Top Real Estate Companies That Might Go Under.
