Fathom Realty Commissions and Splits
Compensation Plan
This is very important, and it’s a powerful and attractive benefit. Fathom Realty is a 100% company, so there is no split on your commission to Fathom. You get to keep one hundred percent of the commission. Now there are fees, of course to make up for that.
First, there is what’s called a precap transaction fee of $450. There is also a post cap transaction fee of $99. In addition, there is one annual flat fee of $500.
So, back to that precap transaction – on your first 12 transactions, you keep one hundred percent of the commission and you just pay a flat fee of $450. Once you get to your 13th transaction and beyond your fee goes from $450 down to $99. And then each fiscal year, the company charges you a flat $500 that comes out of your first closing.
What I’ve come to learn is that splits can either sound really cheap or really expensive, but you never really know until you look at the fees in the context of running a projection or a scenario. Right, so let’s do that.
Let’s say you were at Fathom and let’s say you did 12 deals, right? Let’s then assume that your average deal is $7,500 in gross commission. That would be an average sale price of about $250,000. That would be an average commission of about 3%, so those 12 transactions would produce $90,000 in gross commission.
You paid $450 on each of those 12 transactions. So your total fees to Fathom on the transactional side is 5,400 bucks. So there were no $99 fees and you paid your $500 flat fee. Out of the $90,000, Fathom takes $5,900 and you net $84,000, so fathom costs you 7%. It’s the same as having a 93/7 split. Does that make sense? In other words, there really is no such thing as a 100% broker, there are always fees you have to consider.
It’s still a great deal just based on the fees, right? Let’s keep going with this and say you from 12 sales to 18. Let’s just kind of watch how these numbers play out. So in this scenario those 18 deals you did produce $135,000 in gross commission income.
You paid $5,400 in your precap transaction fee, but then you capped at 12 transaction and the net fee reduced to $99 for the remaining transactions, and then you paid your $500 flat. So I think total fees for Fathom in this example were about $6,500.
You grossed $135,000, and you netted $128,000 and change. The brokerage ends up costing you about 5%. This ends up being the same as being on a 95/5 split.
This is a very, very profitable scenario to an agent. On the fees side, Fathom really is an attractive option.
Stock Program
Just like eXp Realty, Fathom is a publicly traded company on the NASDAQ, and so they have a full stock award program as well. I’m going to explain things you should know about stock award programs with publicly traded companies, especially in the real estate spaces.
They can change right, there are nuances of them. Right now, what Fathom is incentivizing its agents to do is to invite other agents to the company. When you do that, they reward you with stock awards. So if you were to invite one agent to the company, they would give you $500 worth of stock, right? With two or three agents, you would get a thousand dollars worth of stock each. So I want you to think about something, if you invite three agents to the company, you would get $2,500 worth of stock.
The more agents you invite, the higher that price point goes. For instance, if you invite 6-10, you get $1,500 in stock awards. And then on agents 11, 12, you get $2,000. In other words, if you were to in one year, invite 12 agents who came to the company, you would get $16,000 in total stock awards.
Here’s the other thing, Fathom Realty will also give you stock when you have closings. There are really two facets to Fathom’s stock plan. There is the comp plan, which is primarily fees. And there’s the stock program, which is tied to agent recruitment. Those two things together is what can make up your full compensation package at Fathom.
0 comments