Comm Computation at IRSC
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To compute commission on a real estate sale, an agent needs to know: 1) The total selling price (TSP) of the property, which excludes any miscellaneous fees or charges. 2) The agent's commission rate as specified by their realty company. 3) Commission is calculated by multiplying the TSP by the commission rate.
Comm Computation at IRSC
- 1. How do we compute for the commission on a sale? COMMISSION COMPUTATION
- 2. QUESTION: What terms do I need to compute for my commission? COMMISSION COMPUTATION
- 3. - You need to know the following to compute for your commission: TSP or Total Selling Price Commission Rate COMMISSION COMPUTATION
- 4. TSP or Total Selling Price - This is the amount of the property alone without the miscellaneous fees and other charges. COMMISSION COMPUTATION
- 5. Commission Rate - This is your present rate at Innovare Realty Solutions. COMMISSION COMPUTATION
- 6. QUESTION: Is TSP or Total Selling Price different to TCP or Total Contract Price? COMMISSION COMPUTATION
- 7. - Yes, TCP is different because this term already have miscellaneous charges and other fees that the Developers are including in the computation while TSP is plainly the amount of the property itself. Remember to not forget this! COMMISSION COMPUTATION
- 8. QUESTION: What are the composition of miscellaneous fees that you are talking about? COMMISSION COMPUTATION
- 9. - Miscellaneous fees “usually” include, but is not limited to: - Documentary Stamp Tax - Transfer Fees - Registration Fees - Notarial and documentation fees - Other administrative and handling fees COMMISSION COMPUTATION
- 10. QUESTION: How much will I be able to get on a sale? COMMISSION COMPUTATION
- 11. Just multiply TSP by your rate 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑇𝑆𝑃 𝑥 𝐶𝑜𝑚𝑚. 𝑟𝑎𝑡𝑒 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃 1,500,000 𝑥 3% 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃 45,000 COMMISSION COMPUTATION
- 12. QUESTION: How about tax? How much tax will be deducted in my sale? COMMISSION COMPUTATION
- 13. - Deduct 10% Withholding Tax from the commission to get the Net Commission you will receive. 𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 − (𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑥 10%) 𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃45,000 − (𝑃45,000 𝑥 10%) 𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃45,000 − 𝑃4,500 𝑁𝑒𝑡 𝐶𝑜𝑚𝑚𝑖𝑠𝑠𝑖𝑜𝑛 = 𝑃40,500 COMMISSION COMPUTATION
- 14. QUESTION: What if my sale have staggered down payment? COMMISSION COMPUTATION
- 15. - In cases where staggered down payment, you will receive the commission on a staggered basis also or on a milestone schedule (every 3 months, every 5 months) depending on the Developer. COMMISSION COMPUTATION
- 16. So, always convince your client to have a full down payment to receive all of your commission, or majority of your commission if you will not receive it immediately. COMMISSION COMPUTATION
- 17. QUESTION: Will I be receiving all commissions if the client will pay for full down payment? COMMISSION COMPUTATION
- 18. - No, the client should also be approved to the financing institution before receiving the complete commission. COMMISSION COMPUTATION
- 19. - If the client paid for full cash, then that’s the time for the seller to receive the full commission. COMMISSION COMPUTATION
- 20. QUESTION: What are the documents we have to sign? COMMISSION COMPUTATION
- 21. - You need to sign the voucher that IRSC will give you. - If you will receive the voucher online, print the voucher, sign it, scan it then send it back to us as proof of receipt by the seller. COMMISSION COMPUTATION
- 22. Just remember that it depends on the Developer if there are still deductions on their commission release like VAT. COMMISSION COMPUTATION
- 23. Those who get P 30,000 to P 100,000 a month worth of commissions are searching for clients everyday (even if they are part-time sellers only with full-time attitude) COMMISSION COMPUTATION
- 24. “Think BIG about what you want to achieve. Think SMALL about how to achieve it.” - SUN TZU, Strategies for Marketing quoted from “The Art of War” END innovarerealty.weebly.com