Does the commission cap of $12k not reduce the growth potential here from more home sales? Assuming a 3% commission for the agent (buying or selling) and 15% sharing rate with Real thats total sales of $2.6m before capping out and not paying Real anymore. Do we know what proportion of agents are currently capped out?
Apologies for the late response. Yes, it is something to watch out for, but I don't think we should be hung up on it. I do not have an exact figure, but even if REAL gets to 100k agents capping out at $12,000 that is $1.2 billion in annual gross profit just from that and not including any of the other ancillary revenue. In my mind, the $12k is a fine thing to give up to keep important agents around, while the most important thing is attracting as many agents to the platform as quickly as they can.
Does the commission cap of $12k not reduce the growth potential here from more home sales? Assuming a 3% commission for the agent (buying or selling) and 15% sharing rate with Real thats total sales of $2.6m before capping out and not paying Real anymore. Do we know what proportion of agents are currently capped out?
Apologies for the late response. Yes, it is something to watch out for, but I don't think we should be hung up on it. I do not have an exact figure, but even if REAL gets to 100k agents capping out at $12,000 that is $1.2 billion in annual gross profit just from that and not including any of the other ancillary revenue. In my mind, the $12k is a fine thing to give up to keep important agents around, while the most important thing is attracting as many agents to the platform as quickly as they can.
"50% revenue growth for the next five years brings revenue to $10.7 billion"
How do you get that number? Shouldn't it be 2.6B ?
Starting $350M, 5 years, 50% CAGR.
You get (1+0.5)^5 * 350M = 2.6B
REAX had $1.4 billion in revenue over the last twelve months