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How to Calculate Success Fees

  • Updated

Note: This article summarizes terms from the contracts that you and your broker signed to participate in the Flex program. In case of any conflict, the contract terms take precedence. Please contact your Zillow Growth Advisor or flexpayments@zillowgroup.com if you have any questions.

Flex is Zillow’s performance-based program that makes it easier for service-oriented agents, brokers, and teams to grow their businesses by providing high-intent connections and a seamlessly integrated buying experience to get more people home.

When you close a residential real estate transaction from a Flex connection, you and your broker are required to pay a referral fee (also known as a “Success Fee”) to Zillow. This article explains how Flex Success Fees are calculated, including how to calculate your Gross Commission Income (GCI) 

What you'll learn in this article:

How Flex Success Fees are Calculated

Zillow’s Success Fee is calculated as a percentage of the Gross Commission Income (“GCI”) that you earned on the transaction.

What’s Included in Gross Commission Income (GCI)

Flex Success Fees are based on the Gross Commission Income (“GCI”) that you earned on the transaction, as reflected in closing documents. 

Gross Commission Income
When logging a transaction, you can enter your commission either as a percentage of the purchase price, or as a flat fee amount.

  • Percentage-based commission: GCI is equal to Purchase Price x % Buyers Agency Commission or % Sellers Agency Commission
  • Flat fee commission:
    When you receive flat-fee compensation for assisting with a transaction, you can enter a specific dollar amount as your commission.

Additions to Gross Commission Income

When you receive additional income from a transaction, that income is usually included in GCI. In the Premier Agent App, you can enter this as an addition to your GCI by checking the box labeled “I earned additional money on this” when logging the transaction. 

  • Agent bonuses
    Agent bonuses or other compensation noted on the settlement statement are subject to Flex Success Fees and should be added to GCI. The only exception is if the bonus is passed through to the buyer on the settlement statement. 
  • Additional flat fee
    If you charge your customer a flat fee in addition to a percentage-based commission, you should add the fee to your GCI.

Fees that are not included in GCI

Transaction-related fees that are paid directly by the customer to your broker are not considered part of GCI, as long as they are clearly documented as separate line items on the settlement statement. This may include brokerage fees, admin fees, document fees, MLS fees, etc. 

Note: since these fees are specific to each transaction, Zillow may review them on a case-by-case basis to determine if they should be added to GCI.

Deductions from GCI

Success Fees are based on your GCI before any splits or incentives, with one exception – you are allowed to deduct certain “incentives” from your GCI if they are paid directly to the home buyer or home seller.

Eligible deductions

If you agree to provide an incentive or rebate to your customer, and the incentive appears as a credit from you to your customer on the settlement statement, you can deduct this amount from your GCI.

Ineligible deductions

  • Commission splits that you pay to your broker are not eligible for deduction.
  • Transaction-related fees or other costs that you pay directly to your broker or a 3rd party are not eligible for deduction from GCI. Examples include:
    • Administrative, Brokerage, MLS, or other transaction-related fees that you pay to your broker or other 3rd party.
    • Transaction-related costs that you pay to a 3rd party at closing, such as the cost of a home warranty.
  • Referral fees paid to another 3rd party, including relocation services, are not eligible for deduction from GCI, unless you can prove that you established a pre-existing relationship with the connection before receiving the connection from Zillow. To request an exception, please submit a Success Fee Exemption request and Zillow will review the details on a case-by-case basis.
  • Any other agent-funded costs that are not paid directly to the customer are not eligible for deduction from GCI.
  • Zillow reserves the right to review deductions on a case-by-case basis to determine eligibility. 

For brokerages and MLS’s under the NAR settlement, the buyer’s agents will only be eligible to receive commissions specified in the Buyers Agency Agreement (BAA). If the settlement statement indicates a higher commission amount than specified in the BAA, you may need to refund the extra amount to your customer. This is a valid deduction to GCI if you log the commission amount shown on the settlement statement and the requested deduction into the Zillow app, and provide a copy of the BAA and proof of payment to the customer to document the deduction.

How to enter GCI, additions and deductions

If you need to enter additions or deductions for a transaction, we ask that you use the PA App to itemize (instead of self-calculating) as Follow Up Boss does not currently support these commission details. 

In the PA App, you can enter GCI in the Commission Details section highlighted in red below. 

  • “Enter gross commission as” – 
    • For percentage-based commission, select Percent and enter the corresponding commission percentage you expect to earn under “Gross commission”
    • For flat-fee commissions, select Dollar and enter the dollar amount you expect to earn under “Gross commission”
  • “I had to deduct money from this.” –
    • Check this box if you have an eligible deduction
    • Enter the dollar amount in “Amount deducted”
  • “I earned additional money on this.” – 
    • Check this box if you earned additional income beyond your base commission
    • Enter the dollar amount in “Amount added”
  • Upload closing documents
    • Within 4 calendar days after the transaction closes, upload closing documents that support your commission amount, including any deductions or additions that you entered
    • See more information on Closing Document Best Practices

Partner Resources

Questions

If you have additional questions about transaction logging, eligible or ineligible deductions, or Success Fees in general, please contact flexpayments@zillowgroup.com or your Zillow Growth Advisor.

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