Choosing a Real Estate Brokerage Firm
September 6, 2017 |
Considerations for Choosing a Real Estate Brokerage Firm:
- Brokerage Type
- Training, Coaching, Mentoring
- Reputation and Market Share
- Commissions and Expenses
During your first year in real estate, you will have plenty of questions and curiosities. Be sure you’re choosing a real estate brokerage that will be there with you every step of the way. Interview with several different brokerages. You should also be interviewing them to see if it’s a good fit for you. Keep in mind you’re an independent contractor owning your own business. You may have to partner with a broker, but your success and your business depends on you.
Quantifying the culture is a difficult but paramount aspect to consider when choosing a real estate brokerage. It makes a huge difference in job satisfaction. The money isn’t worth being miserable and not enjoying the time spent at work. Here are a few things to keep in mind when determining good culture fit.
- As a new agent, you’ll have many questions for your broker. You will want a timely response from them. Ask other agents how they get “broker time” when they need it. Good brokers should want you to speak to their agents.
- In larger companies, you will likely be in contact with a salaried manager. Ask the manager if they also sell real estate. If they do, that could take up their time when they could otherwise be helping you. How many agents is that manager responsible for?
If the office is mostly new agents, the high-energy atmosphere might feel chaotic at times. On the flip side, experienced, stable agents might lack an air of excitement. Look for a combination of both in your prospective brokerage.
After getting to know the brokerage, ask yourself how you feel about the company or the manager. Your gut feeling should factor into your decision. Visit the company website, find their company directory, and call agents who work there.
Real Estate Brokerage Types
National Real Estate Franchise
- Brand recognition – Customers already know and trust familiar names
- Multiple offices – Makes your commute easy and more meeting options with clients
- Technology – Discounts on software and tech support. Access to top shelf transaction management software, CRM software, and website building software.
- Turnkey marketing solutions – Direct mail and online advertising templates, website building tools, and drip campaigns.
- More individual attention – Fewer agents in a brokerage could mean more focus on your needs
- Less competition for leads – This also comes with having fewer agents
- Less red tape and more flexibility – Largely depends on the organizational structure of the firm
- More creative license with marketing, like with Facebook Ads
Training, Coaching, and Mentoring
Good training and coaching is the cornerstone for a successful real estate career. It’s important a brokerage offers training and a mentoring program. Ask if you can sit in a brokerage’s training class. A broker should be happy to show you what they offer. If they won’t let you see their training unless you join the brokerage, let that clue you into their company culture.
Reputation and Market Share
You’ll need the brokerage to have a strong market presence and good reputation. Keep in mind, higher market shares for them could mean more leads for you and reputation helps establish trust with clients.
- Google search – Are they on the first search results page? This is a good indication of their online presence. Also, check for press mentions and website copy.
- Yelp reviews – Take bad reviews with a grain of salt unless there are several
- Word of mouth – Have you or your friends heard of the company? What’s the first thing that comes to mind? Many clients likely feel the same way.
- Awards and memberships – What awards are on their website?
A brokerage having more listings than any other is a good indication of their market share. This could also mean a great place to work. But, number of listings is not as important as listings per agent. Some brokerages have a few superstar agents while the other agents in the firm struggle.
The support of a brokerage can vary, but it also depends on your needs. Perhaps you only need a desk and an outlet to plug in your laptop. Maybe you need tech support, software, and office equipment. Either way, be sure you understand what a brokerage firm offers. Some firms may upload your listing to MLS for you or process your transaction paperwork. An accounting department may determine how long after a closing you can expect your commission.
When choosing a real estate brokerage, consider your commute time. Granted, technology has enabled us to stay plugged into our offices remotely. But you may find yourself needing a place for meetings and accessing supplies and forms. You may be more productive in an office rather than at home. Also, consider how easy it would be for a client to find your office. Would they feel welcome? Is the space clean? Are there nice conference rooms? Is the receptionist friendly?
Commissions & Expenses
Commissions is one of the most considered factors when real estate agents choose their brokerage. But the dollars are in the details. It’s about more than the commission! Here are some specifics within commissions to consider.
Brokerages that offer 100% commission seek compensation in other ways. They need payment in the form of transaction fees, E&O premiums, and desk fees. Desk fees are like rent, you need to pay them no matter how well you’re doing financially.
The Commission Split Breakdown:
…Of course, this is before expenses and taxes.
Take your time to find the brokerage that is right for you. Look past the commission structure and consider what fits your budget and lifestyle. There’s more to choosing a real estate brokerage firm to work for than the split. Look at the culture, training, opportunity, and support. Interview the broker and the agents. It is easy to switch brokerages but keep in mind the cost of doing that. It all starts with meeting brokers in person.
You can do it; good luck!