If you’re thinking about building your own income report, the first thing you need to understand is the concept of GCI.
What is GCI? GCI refers to Gross Income Commission. And for many, gross commission income is the best metric to use to track their real estate sales.
Let’s take a deeper look at GCI and what it means to a real estate professional.
Why Does Your Gross Commission Income Matter?
As a real estate professional, your GCI is essentially your major “revenue” stream. Your gross commission income is how much money you bring in from commissions, rather than auxiliary services (such as staging or fees). If your gross commission income is going up, you know you’re doing something right.
Real estate agents need to track their revenue carefully. In the real estate business, revenue generation can be quite volatile. When you first start out, you might make a sale every couple of months. If you aren’t tracking your revenue, not only could you overextend yourself, but you might not know whether your business is improving.
How Do You Calculate Your Gross Commission?
It’s pretty easy. To calculate your commission, you just need to know the commission rate and how many parties the commission is being split between. A commission is generally split between the buyer’s agent, the seller’s agent, the buyer’s broker, and the seller’s broker. So, unless you have dual agency, you’ll get about a quarter of the total commission.
That’s it. Your gross commission is the amount of commission that you’ve made. There aren’t any expenses factored in or operational overhead. You can calculate it on the back of a napkin.
But if GCI is so simple, why is it also so important?
Why Is GCI Important?
GCI is a major metric that you can use to see whether your business is growing.
When you’re thinking about a single transaction, being able to calculate your gross commission is important because you need to know how much money you’ll make. Understanding your gross income is important — from there, you can take a look at expenses, assets, investments, and other commodities.
On a monthly, quarterly, or annual basis, you will also need to know your gross commission so you can see how you’ve done in the market. If your GCI is going up, what are you doing better? If your GCI is going down, what do you need to change?
GCI isn’t everything. It’s only an example; it doesn’t define success. Real estate is both highly local and highly seasonal. A realtor is likely to see their company’s income going down during winter and up during summer, regardless of their personal performance.
Still, a company that is reliably tracking its financial success is a company that’s better poised to leverage its data. If you aren’t tracking your cash flow as a realtor, you’re more likely to find yourself short on money or wondering where the money went.
How Can You Increase Your Gross Commission Income?
Gross commission income can either be increased via volume or via negotiations.
- Volume. Reach out to other agents and companies for referrals. Dig deeper into digital marketing solutions and lead generation. Share information on social media to bring in more gross commissionable income. Work to create situations in which you have dual agency, so you have more interest in the transaction.
- Negotiations. Negotiate with brokers for a higher percentage per account.
In addition to increasing commission income, consider adding value in different ways. A real estate professional can provide their customer with a number of additional services:
- Home staging service
- Professional photography or videography service
- Premium online listing services, such as Facebook ads
For the best financial outcomes, a real estate agent may need to get creative. But it all begins by tracking your success through metrics such as GCI.
When Shouldn’t You Use GCI?
When comparing brokers, GCI can be more nebulous. GCI doesn’t necessarily represent how much money someone actually makes. For instance, a brokerage might have $1,000,000 in gross commission income, but depending on how much of that is passed on to the agents, that could be a lot of income or almost nothing at all.
For an agent, gross commission income is more straightforward — the commission the agent makes is their paycheck. But that still doesn’t consider the expenses they may incur.
What is the average GCI?
It’s hard to say. While the average income of a realtor is around $49,000, most realtors and brokerages don’t divulge their GCI numbers — there’s limited reason for them to engage in this type of transparency. But this can make it harder to determine who is truly a successful agent and who isn’t.
What is a GCI goal?
The average real estate agent is likely to track their success in terms of GCI goals — goals for how much revenue they bring in. But not every real estate agent tracks success via monetary reward. Other agents may consider how many clients they bring in or how satisfied each client was. For some, this can be a better way of building long-term growth.
What is GCI Communication Corp?
GCI Communication Corp is not related to real estate. It is a telecommunications company that provides cable television service, internet access, and other telecommunications connectivity services. When searching for GCI, you’ll often get hits about GCI Internet, Alaska Communications, and Liberty Interactive — but these aren’t relevant to real estate GCI.
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