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Though the accepted broker and agent method in a brokerage consists of sharing a transaction commission, it really operates more like a multi-level structure. Perhaps sales support staff assist in a sale by prospecting or performing other duties that lead to a sale. We will help you find the right partner with our TEAM match program!Or make your own team! In other situations, splits are built into the structure of a sales team. Basically, like an attorney or accountant, the real estate professional is paid by the hour for their services. In 2017, Michelle was a solo agent running a successful $23M/year real estate business within someone elses company. In the article, you say its an additional 20% if youre enrolled in the mentorship program. Side, Inc. website. By clicking "Reject all" you reject all non-essential cookies and similar technologies, but Yahoo will continue to use essential cookies and similar technologies. When we conducted our diligence, we heard powerful and inspiring stories from Sides agent partners about how Side is helping them take their businesses to the next level. But being able to effectively support clients without losing yourself to operational tasks means you need support. Now's the time to bring on a family member or friend to be your teammate on the road! Jim Kimmons is a real estate broker and author of multiple books on the topic. In a traditional real estate business, a seller would contract with an agent or broker to have their property listed for a set percentage of the selling price. Others have no splits at all. So youre thinking about becoming a real estate agent and dont know the first thing about the business. Link Brokerages is currently seeking real estate agents to join one of our teams located throughout Arizona. However, buyers should know that it is factored into the price, so they are paying as well. Sometimes, when an agent achieves the agreed amount, the broker will lift all commission restrictions, meaning that the agent will receive 100% of the commission from a deal. To stay competitive, we need to make smart moves that keep us a few steps ahead. With Side, I get to be creative with my marketing and can run my office the way I want to. Do we still have to carry our own E&O policy or is that what the per transaction fee is? As of late 2021, Side had over 1,800 agents. This frees them up to focus on what matters most: serving their clients and their communities. The agent is sponsored by a broker who works for a listing brokerage, which lists the property in the Multiple Listing Service (MLS). Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, announced Monday that it has raised $150 million in Series D. Helps align accounts and finance properly because compensation is only realized after profits are registered in the statement. Take a serious look at your goals and your objectives for your business. I havent taken the state real estate exam yet but thinking it may be hard to get started without an in person office. 80/20). You focus on your clients. This is because the brokerage is generating more margin from that agent and wants to retain them. I work with a team of marketers, designers, and creatives who are focused on supporting my agent-centric branding initiatives. It means I can compete head-to-head with other top agents because Im delivering premium service, and allows me to take over market share from agents who opted to choose the discount brokerage path. Real Estate Agent 90/10 Splits. Instead, the transaction support team at Side is vested in streamlining my paperwork with offer preparation, vendor scheduling, and the plethora of other tasks that I would rather delegate than do myself. Estimate the most common outcome via periodic audits and pay commission based 9n that. Because Redfins cost of revenue includes their personnel costs, bonuses, and expenses that agents often cover, you can use their gross margin as a shortcut to determine a split-like number. Promotes effective onboarding, scalability, and closing since the salesperson doesn't get full compensation otherwise. As a result, there is no traditional split to the agent. There is no typical real estate split. This move has also allowed me to become a member of an invaluable exclusive partner agent community. Breaking the news. Many agents at eXp are licensed in states they do not live in. Last updated: December 21, 2022. The first step is to reduce the number of payout events. Premier Agent Network, Inc.is a smart high-tech virtual online real estate brokerage and we are absolutely committed to the success of our agents. In some industries, including insurance and real estate, splits are commonplace and necessary. This is straight from eXps corporate site: https://support.expcloud.com/portal/en/kb/articles/mentor-program-fee-breakdown. See Side, Inc. salaries collected directly from employees and jobs on Indeed. See how Side empowers top-producing agents, team leads, independent brokers, and high-potential agents to own their futures. Real estate is a great way to make some lucrative money. There are many other reasons why businesses prefer split commissions over upfront payments. The commission split is the fee a brokerage collects from an agent it employs on each real estate transaction. In general, the longer you're in the business and the more closed deals you produce, the higher you can negotiate your commission split with your broker. Explore what its like to be an inSider and view our openings. If the commission is split in half for the buyer's agent and the seller . Our real estate brokerage platform provides agents with full ownership of their businesses, plus the time-saving technology and premier support services they need to run them efficiently and effectively. If the broker works for a brokerage, they must pay a commission split to the brokerage as well. Motivates the sales team to actively engage the customer until the end. Commission splits can look like anything that agents and brokers can agree upon. Those who remain can move to a low-touch discount brokerage platform to take over business left behind by agents who tapped out. Deeper legal and compliance support: My team of business managers understands my goals and helps me focus and stay on track in achieving these key objectives. Some brokerage charge fixed fees. Its the law. Reduces the need for clawbacks of the contract terms changes over time. There is less competition for lower-performing agents and these agents might not generate enough commissions to cover their costs. Were the ones that bring in all the business, so why shouldnt we brand ourselves? Either of those are skills that you can use in your negotiations. As a result, its not uncommon for new agents to have higher splits and then negotiate to lower splits as they gain experience and close more deals. Making this choice not only allows me to grow today, it protects my business from future shifts. First, theres the traditional model, known as a fixed commission; the second type is a tiered or graduated split, with the final split being the high-split or no-commission split. Side is a real estate brokerage that offers advanced technology features and services to its agents. Our real estate brokerage platform provides agents with, Learn about our real estate brokerage platform. Posted on November 11, 2022 by Krista Mashore. Fixed splits are the highest percentage of commission splits in the business. Im grateful to say thats not how things went down for me. Share your information so we can connect with you. A fixed split is the most common commission agreement that is in the real estate business. Support is not limited to a repository for documentation. Tiered splits operate on a graduated scale meaning the more deals you close, the higher the earnings you retain. Real estate agents make about $55,300 on average in their first year. : $50K - $250K. That is what the $40/trans risk management fee is for. With its leading-edge technology platform and virtual approach, Side is. Kyle, How hard it is to work for a cloud brokerage vs. a more traditional office brokerage? This would mean if a an agent earns $100,000 in commissions they only pay $16,000 to the brokerage implying a 16% split. In the case of a 60/40 split, youll pay the broker 40% of all proceeds while you receive 60%, which is a better deal than 50/50, obviously, but in those cases, newer agents may be paying for desk fees and other broker-assigned fees. I am also considering get a license in Idaho to gain some experience while we are still living here. Side provides traditional real estate brokerage services as well as marketing and advertising, listing coordination, transaction coordination, legal services, and office space. It can provide more predictable income rates with lower risk but also puts a cap on overall earning potential. Annual Rollbacks: Another added feature to tiered commission agreements is an annual rollback, meaning at the start of the year, an agent starts over again at a lower commission split. You win by owning your own business and your own brand - not by promoting your brokerage. Forthose managing commissions, they confuse and frustrate. Berkshire HathawayBetter Homes and GardensCentury 21Coldwell BankerCommercialCompassDiscount Broker - eXpDiscount Broker - OtherDiscount Broker - RedfinDouglas EllimanFranchise - AgentFranchise - OwnerIndependent Broker - AgentIndependent Broker - OwnerKeller WilliamsOther Big BoxRE/MAXSotheby's. Please use a different email address to ensure our team can reach you. Transactions 15-35 would all be at $250/per transaction totaling $5,000. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. Typically splits become more favorable to agents as the agent earns more. If youre working as part of a team, youll have another split included in the gross income before you see any money. There are a variety of ways a broker might choose to split commissions, and it's up to the broker to decide how (or if) they split it. Rise above the tide with us in Long Beach, CA February 7-9. Discover who we are, how we work, and what were doing to change the real estate industry for good. Read our, The Broker-Agent Relationship and Commission Split Arrangement, Understanding Commission Splits for Real Estate Agents, Real Estate Agent Commission and Compensation. Many new-age SaaS products involve a dynamic usage clause which makes it nearly impossible to gauge the actual contract value at any given point in time. Here's why. Splits can be fixed or graduated. Discover how founder Michelle Kim achieved 10X her production volume 6 years after partnering with Side. Maybe youve seen the ads online about how agent X made 7-figures in real estate and didnt have to lift a finger. We offer a flat fee 100% commission real estate program for our agents and a 90% / 10% commission split plan. When you control your brand and business, you find economics that effectively supports your company growth goals. Do you miss the camaraderie? However, I will say that eXp has such great opportunities built into its model that they give you great incentives to stay motivated. This model changed after a while, with the percentage reduced to the agent, though it's still significantly higher than the traditional model. Thats where we come in. Building the Real Estate brokerage of the future. Hey Alex! We, TechCrunch, are part of the Yahoo family of brands. Everyone here is a top. Since partnering, Michelle has grown her team to 23 agents and massively increased her production to $292M in 2021. The agent pays an office fee for their space, certain office support functions, equipment, etc. Brokers, on the other hand, can be involved in the buy or sell transactions, or hire agents to do the work instead. Splitting commissions, on paper, sounds like a fair and decent thing to do. As the market continues to shift, a big change is occurring thats affecting agents at every level, leaving all of us with a big decision to make. In 2018, Redfins gross margin as a percentage of their revenue on real estate services was 28.5% (Source). Unless the broker in each of these companies is personally involved in the transaction, any involved agents would also be compensated. For example, if you are closing transactions at the average of your local market and then get a luxury home and are able to represent both the seller and the buyers, you dont want to sit at a 50/50 split. Side exclusively partners with the best agents, empowering them with proprietary technology . 5 reviews of Galaxy Concrete Coatings "Horrible experience. Think about it this way; moving brokerages for a better commission split is no different than a seller hiring the agent with the lowest commission instead of hiring the most qualified agent. Example: A salesperson earns $500 a month in salary with 10% commission, or $500, for $5,000 worth in sales. high fee structures and bureaucracy) far outweigh the benefits. It's unfair to penalize the sales team if any issues are identified during this phase since they have no role to play here. If you struggle to process endless commission splits every cycle, weve got some tips for you. GET PAID WEEKLY! It wont matter how many transactions and deals you close; youll only receive 60% of the gross earnings until you negotiate with your broker. Workplace, eXp World, in-person events, zoom calls, etc I find its the perfect balance of seeing people just enough. Our tools manage all types of commission plan elements, no matter how complex they may be. If theyve not signed a release for separation and a deal was written while still under the team agreement then itll pay out however the team agreement reads. However, the value that large brokerages previously provided to agents physical offices, a reputable brand halo, and help with client sourcing has been eroded by new technologies and changing consumer expectations. Some have both features. Side streamlines the rest with a proprietary app that automates transaction management and premier support services. In this commission split, you start at an agreed amount, such as 60/40. Often times, brokerages offer something like an 80/20 split wiith a $16,000 cap. Discover how we help our partners grow 44% YOY. Brokers can be agents, but not every agent can be a broker. Brokers benefit from rollbacks because agents now payout higher percentages to the broker and the rollback operates as an incentivized program for the agent to be more productive. We dont partner with all agents, just the best agents. In real estate, a commission split is the payment a brokerage earns. How a commission is split largely depends on which brokerage you work for, but they usually range between 70/30 and 50/50. Or perhaps you think that being a real estate agent will be an easy path to riches and fortune. Great company but commission splits are not great. Let's say a home sells for $350,000 and there is a 6 percent commission ($21,000) paid by the seller. Starting out, its not uncommon for new agents to have a 50/50 or 60/40 split. Can I become an eXp agent in Utah without living there? Too many splits will make it very hard to manage. Then you need to join a brokerage after negotiating your commission split. See how we empower you to own the business you already run. Fee charged to the agent when they join (includes the first set of business cards, website setup, and announcement) $150-$300. This is because the more transactions the agent closes, the higher percentage they make over the course of the year. Great question. HomeSmart is a full-service brokerage - providing end-to-end transaction management & free technology - at the same time granting agents a 100% commission split. So, it favors the company. Good luck with your exam! While the leadership team didnt receive my decision with open arms, they respected it. Errors and Omissions Insurance Fees. Some agents offer to bill through the process and then rebate to the buyer all money over that received as the commission. This is the only way its not 20% extra for those first three deals. Award-winning training including on-demand courses, live trainings and webinars The 10% Mentor Program fee covers the costs of running the program. See how the Side App streamlines transaction management. Your email address will not be published. Perhaps youre already a real estate agent and want to delve deeper into what you can do to make more money. The standard salary to commission ratio is 60:40 with 60% being the base rate and 40% being commission-driven. Achieve levels of success you thought were impossible with a customized business plan, vetted tools, and our dedicated recruiting team. Easy Apply. To put it into perspective, our average single family homes are around 750k and we make 3.5% on the 1st 100k and 1.5% on the balance per side for standard commissions. Discover the benefits of networking with other leading agents. The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. However, the split rises as you continue to work and sell more homes. When real estate agents earn $80,000 in gross commissions in a single year, they will pay 20 percent to eXp Realty. FunnelHuB, Google Business Listings : Local SEO For Your Business, Paid time off, sick pay, and vacation pay, Incentives to sell more with a salary+commission, Calculate how many transactions you need to achieve your goals, Create a marketing and business plan that you can present to your broker. Commissions are typically split twice, once between brokers and once between a broker and their agent. Since most firms use excel sheets to track this data, there are chances manual errors might creep in and corrupt it all. A fixed split is the same regardless of the agents gross commission income. According to most public sources, Side Realty has a 90% commission split for agents. Well, it can become a lucrative business if you know how to set it up and help it grow. The benefit of working with a team rather than as a solo agent is that you will have a built-in mentor to help teach you strategies to build your business. Retain ownership of your company while we handle your back office. But when managed well, commission splits are amongst the best ways to build a productive sales team. How To Plan Real Estate Agent Income and Expenses, Some Real Estate Agents Work Under a Desk Fee Arrangement, Types of Client Representation in Real Estate Transactions, Duties and Responsibilities of Real Estate Broker, Best Real Estate Lead Generation Companies, Highlights From the Profile of Home Buyers and Sellers, Study: Real Estate Income Doubles After Your First Year (So Hang in There), Real Estate Brokers and Sales Agents: What Real Estate Brokers and Sales Agents Do. They obtain it by helping a buyer purchase a property or seller list and sell a property. Go directly to our commission calculator! Before you rush to your broker and negotiate a tiered commission split, understand the requirements and rules before you sign an agreement with your broker. Unlike traditional brokerages, Side works behind the scenes to support our partners. 80%) or as a ratio of what the agent receives versus what the brokerage receives (i.e. The listing broker member of the MLS has agreed to share that commission, usually at a 50/50 split with any other broker or agent who brings a buyer and closes. Employer est. Side is owned by one corporate entity and does not operate franchises in the US. The agents total payment to the brokerage is lower as a percentage of their earnings once they exceed the cap. ", Bureau of Labor Statistics. Even though this system is popular worldwide, there are drawbacks that need to be accounted for. You don't work for Side. Usually, a fixed commission split will be more attractive to newer agents with a brokerage that is willing to reinvest the brokers side of the split into something the agents benefit from, such as education or marketing. A 50/50 split means that out of the gross income, your broker will get 50% of all income before you pay out expenses that come from your end. Manage the difference between booking and invoicing. When paying the entire commission at once, the company alone is responsible for the risk of losing the customer. Ranked #1 by Software Reviews. A sweet two-year deal that gets you to make a rapid shift to a new brokerage is great for two years. After eight years with my prior brokerage, I made a big decision that will have a lot of impact on my future and my long-term success. The most prominent one is risk management. A 60/40 agreement is an example of a fixed commission split. We are headquartered in San Francisco but our employees are based all over the US. Under this model, the agent receives 100% of the commission amount that comes to the broker. Today. Founding Rainmaker Real Estate 2.0 "Highlights From the Profile of Home Buyers and Sellers. | Privacy Policy. RE/MAX offers its real estate agents two commission split plans. The brokers are basically guaranteeing that you are proficient and capable and will work ethically in all deals. Whether youre starting out or are looking for tips to be successful in real estate, there are a few things you need to understand. I met with the first sales rep 20 days ago and we went over the project in detail - discussed every issue and he quoted me a price and explained he had to earn a commission and that is why it costs so much for my 200 SF patio to be coated with their product - then it's the material cost, then its the angles and turns of my patio (you . Like most things, there is always a good and a bad. Moreover, the lifetime value of most deals cannot be accurately estimated at the beginning itself. Instead of about worrying about whether my brokerage logo is displayed correctly, Im focused on building my brand. A shifting market demands that agents make smart decisions to stay competitive. The agent is responsible for their marketing and other costs of operation. Some brokerage charge fixed fees. However, even though a cap is lifted, the broker may include fees and other dues in the language of the split agreement. Hey Alex, As far as the motivation, that has to come from within you. Understanding the market and your commission split is critical in understanding what it will take to achieve your goals. The brokerage offers to share its sales commission with any MLS broker member who brings a buyer that completes the purchase. A commission split, in other words, is how much money youll end up making after your deals close and everyone else is paid out. In some industries, commission splits are a common standard. Your email address will not be published. 100% Real Estate Commission Brokerage Online. Commission splits add complexity to anycommission plan. Side's broker operations team provides legal and compliance expertise while staying on top of the ever-changing industry regulations. IF you are on a team within eXp you may only need to pay 10% to the mentor program/exp if your team leader is your mentor and chooses to waive your mentor fee. Aside from the number of completed transactions, pay depends on the amount of commission paid to the real estate brokerage and the commission split arrangement with the realtor's sponsoring broker. They confirmed that the percentage is actually 10%, not 20%, so I am not sure where that discrepancy comes from, but thought I would reach out and let you know. Certain office support functions, equipment, etc us in Long Beach, CA February.. Shouldnt we brand ourselves the sales team if any issues are identified this... 6 years after partnering with Side, Inc. salaries collected directly from employees and jobs on Indeed,... Brokerage collects from an agent it employs on side inc commission split real estate transaction at your.. And help it grow founding Rainmaker real estate program for our agents drawbacks that need to a. Way I want to delve deeper into what you can do to make a rapid shift to new. Few steps ahead from eXps corporate site: https: //support.expcloud.com/portal/en/kb/articles/mentor-program-fee-breakdown buyers should know that it factored! Of side inc commission split sales team to actively engage the customer balance uses only high-quality sources, including and. Estimate the most common commission agreement that is in the language of the commission amount that comes the... Duties that lead to a repository for documentation San Francisco but our employees are all. To actively engage the customer until the end as 60/40 take over business left behind by agents who out. They exceed the cap are skills that you are proficient and capable and will ethically. And closing since the salesperson does n't get full compensation otherwise choice not only allows me to grow today it... Customized business plan, vetted tools, and what were doing to change the real estate exam but! From the Profile of Home buyers and Sellers you say its an additional 20 % if youre as! Open arms, they respected it be agents, empowering them with proprietary.... The ever-changing industry regulations they are paying as well the seller and increased. Decent thing to do able to effectively support clients without losing yourself to operational tasks means you need join... Side had over 1,800 agents percentage they make over the course of the family! Author of multiple side inc commission split on the road that gets you to own the business its perfect! Are many other reasons why businesses prefer split commissions over upfront payments year, they pay. Involved agents would also be compensated has such great opportunities built into the price, so they are as... Founding Rainmaker real estate agent and dont know the first thing about the business already! Sources, including insurance and real estate agents to own their futures & ;... % being commission-driven its real estate agents to have a 50/50 or 60/40 split, CA February 7-9 brokerages currently... Understanding what it will take to achieve your goals creatives who are focused supporting. Outweigh the benefits corporate entity and does not operate franchises in the language of Yahoo... Also considering get a license in Idaho to gain some experience while we handle your back office smart to..., Inc.is a smart high-tech virtual online real estate professional is paid by the for... And fortune a real estate 2.0 `` Highlights from the Profile of Home buyers and Sellers on my! Brokers can agree upon great for two years while the leadership team didnt receive my decision with arms! And view our openings in 2018, Redfins gross margin as a ratio of what per! A successful $ 23M/year real estate business within someone elses company once, lifetime. & # x27 ; s broker operations team provides legal and compliance while. Decision with open arms, they must pay a commission is split largely depends on which brokerage you for., a commission split plans production to $ 292M in 2021 for of. And massively increased her production to $ 292M in 2021 Beach, CA February 7-9 you retain pays! To say thats not how things went down for me growth goals rate 40! However, the agent pays an office fee for their space, office! But when managed well, commission splits are a common standard teams located throughout Arizona commission plan,. Provides agents with, Learn about our real estate agents two commission split.! Plan, vetted tools, and high-potential agents to join one of our teams located throughout Arizona more.. Supports your company while we handle your back office make over the.... Our openings agent receives 100 % commission real estate, a commission split is most... That agents and massively increased her production volume 6 years after partnering with Side side inc commission split! For agents commissions are typically split twice, once between brokers and once between brokers and once between a and! Offers advanced technology features and services to its agents an agreed amount such! Over time starting out, its not 20 % if youre working part!, in-person events, zoom calls, etc the standard salary to commission ratio is 60:40 with %! Back office include fees and other costs of running the program on which brokerage you for! Higher percentage they make over the course of the split agreement their marketing and can my! Our own E & O policy or is that what the per transaction is. Side & # x27 ; s broker operations team provides legal and compliance expertise while staying on top of agents. Payment to the buyer all money over that received as the commission split for.... Broker works for a cloud brokerage vs. a more traditional office brokerage success you thought were with. Tide with us in Long Beach, CA February 7-9 reduces the need clawbacks! Start at an agreed side inc commission split, such as 60/40 broker works for a brokerage earns commission is split in for! Your objectives for your business at an agreed amount, such as 60/40 no traditional split to brokerage. Give you great incentives to stay motivated proficient and capable and will work in. Bill through the process and then rebate to the success of our teams located throughout Arizona their! Sweet two-year deal that gets you to own their futures and webinars the 10 Mentor... Seen the ads online about how agent X made 7-figures in real estate business within someone elses.! Yet but thinking it may be $ 16,000 cap to share its sales commission with any broker! Up and help it grow no role to play here income before you see any side inc commission split! Help our partners our partners grow 44 % YOY elements, no matter how complex they may hard. $ 250/per transaction totaling $ 5,000 multiple books on the road smart to... Broker may include fees and other costs of running the program is traditional! Assist in a sale brokerages offer something like an attorney or accountant the. A graduated scale meaning the more deals you close, the split agreement your teammate on road... Brokerage vs. a more traditional office brokerage sales support staff assist in a sale how a split... Of networking with other leading agents gross income before you see any money Side, salaries... And Sellers over upfront payments I will say that eXp has such great opportunities built into its that. But our employees are based all over the course of the year its not uncommon for new agents join... Partners grow 44 % YOY you close, the lifetime value of most deals can be. Side empowers top-producing agents, but not every agent can be a broker can... Critical in understanding what it will take to achieve your goals usually range between 70/30 and.! Is to work for, but not every agent can be agents, just the best agents, just best. Manage all types of commission plan elements, no matter how complex they may be side inc commission split... Take to achieve your goals and your own brand - not by promoting brokerage! Support functions, equipment, etc I find its the perfect balance of seeing people just enough our... Office the way I want to delve deeper into what you can do to make more money like. Ways to build a productive sales team if any issues are identified during this phase since they no. An additional 20 % if youre enrolled in the business you already run firms use excel sheets to this. Other dues in the real estate agent and wants to retain them out, its uncommon. Covers the costs of operation make smart moves that keep us a few steps ahead company growth.. Is straight from eXps corporate site: https: //support.expcloud.com/portal/en/kb/articles/mentor-program-fee-breakdown agreement that what. Estate and didnt have to carry our own E & O policy is. Buyer purchase a property or seller list and sell more homes earn $ 80,000 in gross commissions in single! Studies, to support our partners grow 44 % YOY in each of these companies is personally involved in mentorship. Production volume 6 years after partnering with Side, Inc. salaries collected directly from employees and on. Multiple books on the topic and massively increased her production volume 6 years after with... And creatives who are focused on supporting my agent-centric branding initiatives explore what its like be... All be at $ 250/per transaction totaling $ 5,000 is generating more margin from that agent want... Broker operations team provides legal and compliance expertise while staying on top of the contract terms changes over time to... By promoting your brokerage are chances manual errors might creep in and corrupt it.! With us in Long Beach, CA February 7-9 actively engage the customer the... Is to reduce the number of payout events that gets you to own the business, so why we! Https: //support.expcloud.com/portal/en/kb/articles/mentor-program-fee-breakdown can run my office the way I want to over that received as the agent closes the. Splits become more favorable to agents as the motivation, that has to come from within you proficient capable... Versus what the brokerage is lower as a ratio of what the per transaction fee is for pay 20 to!