Our Profit Sharing Model

It’s simple…Why would you want to work for a company that doesn’t give back to you at all?  Here at SoCal eRealty, we believe that all of our agents should be rewarded for their loyalty to the company.  That’s why part of all company profit is reinvested in our loyal associates.

Our profit sharing model is very similar to that of a well-recognized nationwide chain of brokerages…only we won’t take 30% of your commission in order to provide this system.  Every month, our brokerage splits the total profit so that the owners who risked investment money to create the company enjoy about 52% of the profit, while our loyal associates who helped grow the company enjoy about 48%.

The profit sharing model is a tried and true system that creates additional passive income for our agents…and all they had to do was sign up other producing agents!  All our associates share in the profit of the company just as if they were part owners, but they have no financial risk, legal risk, or down payment invested.  You simply receive a check in your mailbox each month!

On a monthly basis, the brokerage calculates and then splits the profit, a profit share factor is calculated, and then the profit is disbursed.  Here’s how it works (with sample numbers used):

1.  Calculating the Profit

    Brokerage Gross Closed Commission        $1,000,000
    Less Associate Transaction Fees             -    $975,000
    Equals Company Dollar                 =    $25,000
    Less Board Approved Expenses             -    $5,000
    Equals Brokerage Profit                 =    $20,000

2.  Splitting the Profit
 

3. Calculating the Profit Share Factor
The Profit Share Factor is calculated by dividing the Profit Share Pool amount by the Company Dollar amount.  In the case above, this would be $9,461 divided by $25,000, which equals a Profit Share Factor of .37844.

This Profit Share Factor is used to determine the amount of profit that will be distributed to each associate’s branch of the Company Tree.  We multiply the amount that the associate paid in Company Dollar for the month by the Profit Share Factor.  Using the example above, if an associate paid $1,000 in Company Dollar for the month, when multiplied by .37844, we would see that $378.44 would be disbursed to that associate’s branch of the Tree.

4. Disbursing the Profit

When an associate joins SoCal eRealty, the application form asks if you were referred to us by another agent.  This is a critical part of the profit sharing system, and cannot be changed at a later date!  Whomever is named in that part of the application will be considered the “referring agent” for purposes of the Company Tree.

Again, for the example above, an associate has earned $378.44 in profit to be disbursed.  Of this amount, 50% will go to the referring agent, or an amount equal to $189.22.  The person that was their referring agent will get 10%, or $37.84.  This continues until the seventh level of the tree is reached.

The profit share disbursements are as follows:

1st Level    =    50%
2nd Level    =    10%
3rd Level    =    5%
4th Level    =    5%
5th Level    =    7.5%
6th Level    =    10%
7th Level    =    12.5%
Total        =    100%

Some important notes about the profit sharing model:

  • The Brokerage must be profitable in order for any profits to be disbursed.  Associates may continue to build their Profit Share Trees if the Brokerage is not profitable, so that when it is, they can benefit.
  • For each month, profits will only be disbursed to Tree Branches if an Associate on the Branch has paid into the Company Dollar for the month.  If no transactions have been closed by any Associates on the Branch, that Branch will not receive profits.
  • Any Associate from any county may be added to your Branch.  It is not required that all Associates be located in the same region.
  • Provided an Associate has been with the Brokerage for 3 consecutive years, the Associate will continue to receive Profit Share funds even if they decide to leave the Brokerage.
  • It is possible for Associates to receive more in Profit Share funds than they pay in Company Dollar for the year.
  • Associates may will their Profit Share to a beneficiary of their choosing.
  • Profit Sharing is passive income – It requires no investment on the Associate’s part!
 
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Contact

SoCal eRealty
1901 First Avenue Suite 217L
San Diego, CA 92101
Office: 800.377.9931
Fax: 619.546.9222

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