The term “capping” has been thrown around by many brokerages in the real estate industry. It sounds great but what does it really mean? Is it beneficial to all agents or only top producers? In this video Alexander Fazelani breaks down some capping brokerages and if it is beneficial for the common agent.

What is Capping?

Capping refers to a system in which real estate agents are rewarded with a higher commission split or a hundred percent commission once they reach a specified revenue threshold for their brokerage. Essentially, it is a performance-based benchmark that allows agents to earn more after they have contributed a certain amount of revenue to their company.

Capping Examples

Several brokerages have implemented capping programs to motivate their agents and provide financial incentives. While there are numerous brokerages in the market, here are a few notable examples:

Importance of Capping

For Established Agents: Capping holds great significance for experienced agents who consistently close a significant number of deals. Achieving the capping threshold allows them to maximize their earnings by receiving a hundred percent commission. This incentivizes top producers and rewards their hard work and success in the industry.

For New Agents

While capping can be enticing, it may not be the top priority for new agents. Instead, new agents should focus on joining a brokerage that emphasizes mentorship, training, and support. Being part of a team or brokerage that nurtures their skills and provides opportunities to gain hands-on experience is crucial in the early stages of their career.

Choosing the Right Brokerage

When considering a brokerage, it is essential to evaluate various factors beyond capping. Blind loyalty should not be the primary motivation for joining a brokerage. Instead, agents should consider the following aspects: