How Much Commission Are You Giving Away on Every Deal?

By DJ Christofferson

After being downsized in 2007, DJ shifted from corporate America into real estate and ultimately found his true lane in mortgages. He built his production on one core principle: be the kind of partner to Realtors he wished loan officers had been for him. Be valuable.

Let me ask you a straight question. Do you know what you’re actually earning per file? Not what your comp plan says on paper. What you’re actually taking home after every deal closes.

If you’re on a traditional retail comp structure, you’re probably capping out somewhere around 125 to 150 BPS. And you probably think that’s just how it works. Everyone around you is earning roughly the same, so it feels normal.

It’s not normal. It’s just common.

The comp gap is real. There are loan officers right now closing the exact same types of loans you’re closing, same products, same borrowers, same files, and they’re earning 250, 275, or even 300 plus BPS. Not because they’re working harder or closing more volume. Because of how their business is structured.

Don’t take my word for it. STRATMOR Group's Compensation Connection Study found that average retail LO commissions land in the 92 to 103 BPS range. On the wholesale side, the same files can pay 250, 275, or even 300+ BPS. That gap between what retail pays and what wholesale pays on the exact same file isn’t a talking point. It’s math.

The opportunity isn’t in closing more deals. It’s in capturing more of what’s already in the deals you’re closing.

Where the gap comes from. Retail comp structures are designed to pay the company first and the originator second. The margin is built into the rate, the company takes its cut, and what’s left is your comp. Most LOs never question it because it’s the only model they’ve ever worked in.

Wholesale is a different structure entirely. You’re originating the same loans through wholesale lender channels, but the comp structure lets you keep significantly more per file. Same borrower experience. Same loan products. Different business model on the back end.

And here’s the part most people don’t believe until they see the numbers: the borrower actually gets a better rate because the wholesale channel is more competitive. You earn more, and your client pays less.

Run your own numbers. I put together a resource that breaks it all down. You can see exactly where your comp stands today compared to what the same production would look like on a wholesale structure.

Go to highercomplowerrates.com and see for yourself. It takes about 60 seconds. If the gap is what I think it is, you’ll want to have a conversation.

And look, I get it. Switching structures feels like a big move. But the LOs who have done it aren’t looking back. The difference between average comp and optimized comp can mean tens or even hundreds of thousands of dollars over the course of a year. That’s not a rounding error. That’s your income.

If you want to talk through what this would look like for your specific situation, reach out. Call or text me at 262-751-3415 or email me at DJ@NEXAmortgage.com. You can also visit DJChristofferson.com to learn more about how we’re doing things differently at NEXA Lending. And if you just want the numbers first, go straight to highercomplowerrates.com.