There is no established commission formula. In fact most village operators
don’t pay commission to managers – it is seen as part of the job function. But this
is changing.
Formulas will depend on the size of the village and turnover of ILU’s. One
village pays its manager $300 per sale, based on a village of 300+ ILU’s. With
an average ILU turnover every 8 years that manager can bank on a bonus of
$11,000+ each year.
The more astute owners and managers realise that vacant ILU’s cost money.
Every month a $250,000 ILU with a 30% DMF is vacant costs the operator
$1,000 in lost interest on the DMF fee before the extra cash from the capital
appreciation is taken into account. This argues it is better to have a fast sale and
allow the manager to get a bonus of say one month interest saved.
A real estate agency charges 3% commission or $7,500 to sell a $250,000 ILU
and the selling agent will personally receive around 1%, or $2,500. On new village
sites this may be seen as reasonable.