Southern Homes of the Carolinas 100% Commission Plans
Southern Homes of the Carolinas Splits
Creigh Hill swears by the 100 percent commission model-and also keeping associate fees extremely low. It’s a formula for attracting top sellers to his high-volume business and keeping their business moving forward.
| November 2011
Southern Homes of the Carolinas Inc., Cornelius, N.C.
Years in Business: 4
Number of Brokers: 80+
How has our growth spurred during the recession
As other companies were losing brokers, we gained enormously. Our associate base has grown 60 percent since last December. People are drawn to us because of our fees. We let brokers keep 100 percent of their commissions and require only a $350 annual fee to cover marketing costs, plus a $295 transaction fee. There are no desk fees, which is the norm with the 100 percent model. By comparison, a top performer elsewhere working on a
70–30 split with 10 transactions in a month that produced $150,000 in gross commission income would owe the broker $45,000. The same agent would owe us only $2,950 for the same ten transactions, plus the $350 annual fee. But not everyone can offer this kind of program to brokers. You have to be able to afford it. We lost money for the first two years. We thought it would only take a year to make money. But we started out with ample cash reserves to get through. We became profitable when our competitors were falling apart, and we’ve stayed profitable. We have the volume now to support this model.
How the brokerage encourages productivity
We offer a variety of training and educational seminars on everything from the facts behind lead generation to social networking. And we invite brokers from other companies to attend. It ends up being a useful recruiting tool for us. People meet our brokers and see what we’re about. We get up to large groups attending our seminars and have sponsors, including a mortgage company, pest control business, and local real estate lawyers to offset costs. We promote self-branding by offering personal Web sites, REALTOR upgrades, Virtual Tour Service, Lead Generation and training to our brokers for free.
How he stays involved with his brokers
We want brokers to talk to us about any issues that come up. I personally speak with up to 10 brokers a day. And I take a hands-on role in the business. I do minimum selling because I want all my energy to go to the brokers. I don’t compete with them. But I will do spot checks at open houses to make sure that all the details are taken care of—everything from ensuring that there’s a sign-in sheet to seeing that the property shows as well as it can.
His greatest obstacle and how he overcame it
Although we anticipated that business would be slow for the first year, things were tougher than we expected. But our biggest obstacle was one of perception. In the beginning, brokers would ask me all the time, “What’s the catch? This sounds too good to be true.” I tell them there is none. It was initially hard to get the word out that our business model was real. After they get to know us they see there’s no catch. So, those questions are coming less often now. Our reputation is extremely important to us and the average experience of our brokers shines the respect we have earned.
Why we have no desks at our offices
All our offices are used for client meetings or conferences and are each only about 1000 to 1500 square feet. Brokers don’t need to sit at desks waiting for clients to come in. The days of the walk-in client are over. The Internet has changed all that. That’s why we don’t require floor time or desk time.
Our proudest achievement
Earlier this year we were ranked as the No. 3 office in Lake Norman and Iredell County for both listings and Volume
and listings taken and we competed against hundreds of brokerages in our MLS. We have gotten to this point because of our business model and our experienced brokers.