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Bonus Commission Compensation

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Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Hey, guys. I've got a question. I'm adding a new trainee (my son got laid off at his computer company - last of the employees at a failed buy-out). He is smart but just doesn't get it. He wants to be an appraiser. :blink:

Anyway, he suggested that I let him do the marketing and pay him a commission on the business he brings into the company. As I've been herding cats around here and absolutely unable to do any marketing, this sounds O.K on the surface.

Any of you had any experience at commissions on new business for the employee, etc.? Would appreciate feedback as to percentages, etc.

Thanks.

Roger
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
I have a trainee coming on as soon as she takes and passes her test(she doesn't seem to be in a hurry).

1. Are you asking if a trainee gets a new account for you that he/she gets a commission?

2. If anybody gets a new account for you that you will pay a commission?

Are you also asking how much it might be? 10% of the first 20 appraisals, 20 percent of the first 5 appraisals, etc etc etc

Sounds like a great Idea!
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I pay my apprentice 10% more on all work she generates. Also been told I am paying more than most other mentors in the area. A sliding scale seems the most fair way to go...start off at 40% or 50% of the fee and increase that as your trainee requires less and less supervision.

I assume you are saying she will generate work for herself. If you do the work, pay her 20% of the fee on the work generated for the first 6 months. Depending on how busy you are, this might be the most productive use of her....marketing your services.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Mike: That's along the idea that I'm looking for. If he generates new work, say a new client that will generate X appraisals, if you are paying the trainee/appraiser an additional commission, and how much for how long? For example, if you pay a 10% commission, do you pay the 10% in perpetuity or just up to 20 appraisals, 30 appraisals, what? If he generates a new client and another appraiser actually does the appraisals by the client, do you pay the 10% off of the top and then split between the office and the field appraiser?

We've never been in this position before. O.K., I admit, my office has never been this big before, either. SEVERE growing pains. Can we say 'Incorporation'?

Thanks in advance.

ROger
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
Roger ...

When you pay commissions to appraisers for the work they bring in you're opening up a lot of new issues ...

*in a typical sales position, the salesman gets a part of the sales attributed to the client, regardless and for however long that salesman is with the company, additionally, its the responsibility of that same salesman to service the client and be the contact person.

*as your trainee is not an appraiser and isn't familiar with the ground rules etc., I would suggest that he make initial contacts, but that you be involved in actually handling the client. This way he won't promise that which he cannot deliver ... nor mis-represent your firm.

*on suggested splits, commissions, etc ... looking at it from both a sales and production standpoint (and assuming that you can take on the additional work) I would suggest a graduated scale, with more $'s to him as the client produces more work for you.

Looking from another perspective ... he's your son ... if he really wants to be an appraiser, I assume he will one day take over the family business ... that being the case, getting new clients is part of the business and part of what he needs to learn to do ... after all, you're training him to take over someday.

If it was my son, I would give him a small sum for each assignment from one of his clients, increasing the sum at set benchmarks, more work higher cut of the deal ... but I would tie that sum to the quality of the client and I would expect your son to maintain that relationship via face-time, calls, etc.

Personally ... I think that system isn't the best ... I prefer a profit-sharing set-up that covers all contract appraisers, principles, clerical, etc. Each is given a cut of the pot, based on a pre-set formula. This way, some of the profit is given to all ... and all help market and maintain client relationships ... as well as hold down costs, etc ...

I worked for a company that did it that way ... they had long term relationships because everyone in the office had a vested interest in the client ... and the business.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
We've never been in this position before. O.K., I admit, my office has never been this big before, either. SEVERE growing pains. Can we say 'Incorporation'?

Roger, I'm in middle of doing the same thing. It's a reall pain in the :shocked: to change names, accounts, tax ID's, and up date software, vendors, AMCs, ect. I'm woking my tail off trying to get our Inc. stuff done, and keep up with work load, and enter all our new pay roll in Quickbooks before the end of the month. :blink:

But it's worth it in the long run. ;)
 
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