Things To Consider When Looking For A New Brokerage
- Commission Split – Many new real estate agents think choosing a broker is primarily based on commission splits. That is a horrible way to choose a broker when you are starting out! There are brokers that will give you a 100% commission. If a brokerage claims to pay 100 percent commission, it means they will collect from you in other ways, such as transaction fees, E and O premiums, and desk fees, and they will probably offer you zero assistance. What’s a good commission split? That depends on the business, your market, the broker’s support and resources, and a number of other factors. Just make sure you understand the split and how you might get a bigger percentage over time.
- Brokerage Culture – Remember each brokerage is different and run by different people. Your primary goal is to judge the people you will be working with, not the name on the door or size of the office. Deciding to hang your license at a large brokerage from the start is a great way to expose yourself to experienced and successful agents. The con to working at a large brokerage is that they tend to give a lot of motivational speeches using words like "family", but that family may turn into a pack of wolves when a lead comes through the door. At A big real estate brokerage you are being placed in a cookie cutter process that it either works for you or doesn't. There's little room for accommodating new ideas. If you are a creative out-of-the-box thinker, this is probably not the setup for you. If working for a big office doesn't seem like a good fit, you might consider joining a local boutique brokerage. Boutique brokerages are usually much smaller offices that specialize in a specific local market. Boutique offices are often a bit more picky about who they bring on to their team. It is not a numbers game for them. It is in their interest to make sure whoever they bring on is successful, as they do not have the time or resources to bring in masses of new agents.
- Internet Presence – Everybody uses the internet. When you tell somebody you are working for a brokerage, they will often cross-reference you on the broker's website. Having a website that looks professional and presents each agent in a professional manner is easy to do. It is not expensive and does not take a lot of programming. Therefore if a broker cannot do this, it is a major red flag.
- Fees – Desk fees, printer, copies, transaction fees, insurance, and more... add it all up and see what the bottom line is per month. When you talk to a real estate broker you are interested in working with, ask them about fees that are specific to their company and the ones that are not. You can make a note of which fees will apply at every brokerage (and cross-check if that is indeed the norm) and which fees are specific to that brokerage. Many large real estate brokerages charge a 3% to 8% “franchise fee” on top of the commission split above, so using the example above, the broker would receive 40%, the franchise fee would be 5% and you would receive 55%) Franchise fees are different from brokerage-related fees. A few common ones include: Monthly office fee, Monthly MLS fee, Errors and Omissions Insurance (E&O), Education fee (often charged for the new licensee course they offer), Start-up fee, Desk fees.
- Benefits & Offerings – Some brokerages are very hands-on and offer extensive mentoring, free training, and marketing collateral. Other brokerages are just places to hang your hat while you get to work growing your own business. Does the brokerage offer to pay for your headshots, business cards, signage, lockboxes? When you’re ready to choose a real estate broker, keep these considerations in mind. Finding the right brokerage involves research and interviewing. Don’t be afraid to sit down with several real estate brokerages in your area to see who fits the best with your learning style and business goals.
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With nearly 90,000 real estate brokerage firms in the United States, you have a lot of options