UPDATE:  Please speak to your local Keller Williams Realty office to discuss their economic model. Caps are becoming a more regional issue across the United States.   12/2021

Both experienced agents from competing offices and new prospective agents often do not fully understand how Keller Williams Realty sets their commission pay-outs to the agents within their brokerage.  So let’s clear up exactly “What is a capping agent at Keller Williams Realty?”

I’m a former Team Leader of the Olathe, Kansas branch, Diamond Partners, Inc, I will use our cap structure as the example explanation.  Please know that each and every KW franchise has the right to set their own cap amounts and that when we start talking about teams and groups it’s best just to give me, or a local Team Leader, a call for a more detailed explanation.

For a “single” agent (an agent working by themselves or with their spouse) here at KW, Diamond Partners in Olathe we have a cap amount of $18,000 and there is a franchise royalty paid to KW in Austin, TX of $3,000.  Keep those numbers in mind as you read on.

With each sale you make (buyer or seller) you will earn a commission that is agreed upon within the MLS.  That commission is then paid to our brokerage, KWR, Diamond Partners, Inc and then we break out that commission as follows;

• 6% goes to KW in Austin
• 30% stays with our market center here in Olathe
• 64% is paid to you

This is true up until you have paid in the amounts given above which total $21,000.  (See the $18,000 and the $3,000 above.) Here in the Olathe housing market that usually equates to about $2.2 Million dollars in house sales, or roughly 12-14 house sales in a year.  “In-A-Year” is a key phrase.  Because you will have an “anniversary date” that resets your cap and the process begins all over again.

A great many of our agents never “cap.”  They are either part time or haven’t done enough to sell $2,200,000 of homes.  However, many of our agents do “cap.”  Some cap in the 12th month of their fiscal year.  Others in the 6th month, or first month, and so on.  We had someone very recently that “capped” on the 76th day of their fiscal year.  Why is this important?

Because once you have capped, you keep 100% of the commission earned…with no limits.

Yes, you read that correctly.  After you have paid in your cap ($18,000 + $3,000 = $21,000) then you keep 100% of the earned commissions until your anniversary date.

ANOTHER EXAMPLE
Let’s say you are a high production agent and you sold $20,000,000 in volume last year at 3.0% average commission.  (Adjust your numbers accordingly.)  You would have earned $600,000 in Gross Commission Income. Follow me?  Now, if you use the numbers above where you cap at $21,000 ($3,000 for KWRI and $18,000 for KW Olathe) then, essentially, with KW you have paid a 3.5% split, or another way of putting it you were on a 96.5/3.5 split.  Make sense?

If you’d like to learn more about Keller Williams Realty, regardless of geography, feel free to contact me by email, comment or phone call.  I love this company and I love my location.  I’d be happy to consult as to whether being a real estate agent with us or anybody would be a good idea for you.  The money is great but so too can be the challenges. I look forward to talking to you.

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Have a business.  Have a life. 

Chris Lengquist
Teaching | Speaking | Coaching
KWR, Diamond Partners, Inc
13671 S Murlen Rd
Olathe, KS 66062
913-568-1579