Pick The Right Brokerage To Start Your Real Estate Agent Career
If you are someone who is considering a career as a real estate agent, then let us say that you made the best possible decision. A career in real estate would provide you with both personal fulfillment as you would be helping people achieve one of life's most important milestones — becoming a homeowner, and it would also provide you with immense career growth and success, as in the real estate profession, you create your success on your own terms.
One crucial aspect future and new real estate agents must pay attention to is selecting the right real estate brokerage to work with. This is an integral aspect of your career as a real estate agent. Most aspirants are familiar with the requirement that after obtaining their real estate license, they are mandatorily required to join a broker and work with the brokerage team to obtain further experience.
However, what many are unaware of is that your choice of real estate brokerage could determine your future career progress as real estate agents, so it is necessary to make this choice most cautiously after thorough research of various real estate brokerages in your city and having an in-depth understanding of your own growth needs and what the brokerage house can provide you.
In fact in certain states such as New Jersey, Montana, or Mississippi, it is compulsory to have sponsorship from a brokerage before you can even apply for your real estate agent license. This is one of the reasons why it is vital to be careful in making the selection of a real estate broker to work under and obtain sponsorship.
Choose The Type Of Real Estate Brokerage To Join
Before you can start considering the details and examine the differences, you must first decide what kind of brokerage would you prefer to work with? This is the first step in beginning your selection process of a brokerage firm to work with. Depending upon the type of brokerage you would have certain benefits and few drawbacks. You need to select the one that would fit you the best.
The different types of brokerages are:
A. National Franchisee Brokerages
These are large real estate companies offering their franchisees and permitting the franchisee owner the usage of the parent company's brand name. They charge a fixed percentage of every successful deal carried through the brokerage which has purchased the right to their name. Some of the big real estate companies following this model of business are Keller Williams Realty, RE/MAX, and Berkshire Hathaway among many others. The independent franchisees are expected to follow the guidelines and rules set by the main office.
They offer excellent credibility to new real estate agents because of the brand name, as it comes with a lot of trust and value.
They provide extensive technological support. The agents usually get free or discounted customer relationship management software, management, and accounting tools.
They also provide low-cost marketing tools and solutions, such as direct mail and drip marketing solutions, website creation tools, and online marketing solutions.
The main issue some real estate agents face is there is very limited room for flexibility. It is a top-down management style. So the head office takes all the key decisions. Large size, more offices, and more agents and brokers could at times lead to competition for new seller and buyer leads.
B. Boutique Brokerage
Boutique brokerage houses are independently owned firms run and managed by one broker. Although these brokerages may be smaller in size compared to the large real estate firms, they still offer a lot of opportunities to agents working with them.
There is a higher sense of working as part of a team. As there are fewer people, everyone tends to help each other out.
As the team is smaller, the new real estate agents receive more attention from the broker and guidance to become better at offering services.
There may not be any brand name advantage from such brokerages. The recognition will be mostly from people in the immediate neighborhood.
Less support for marketing as they have smaller budgets and also offer less support in terms of technology as they may not have access to top software and tools.
C. Virtual Real Estate Brokerages
One of the newer additions in the real estate business has been the virtual real estate brokerages. There is no physical office, rather all your activities can be handled from the comfort of your home. All you need is a good computer and a steady internet connection. These have surged in popularity in the last year as in most places offices were shut and people were expected to work remotely.
The primary advantage is that you get a higher percentage of your commission as the brokerage does not incur any expensive overheads of office space rent.
They offer superior technology in terms of tools and support as the entire organization operates from a virtual space. The desk fees charged are also lower. The savings from these could be added to your marketing budget.
As all the real estate agents are working remotely, there is hardly any networking opportunity offered in this kind of brokerage house.
There are hardly any opportunities for enhancing your knowledge or upgrading your skill offered by the firm. Even learning from your more experienced peers is not possible in such brokerages.
Enquire About The Commission Split
Real estate companies will offer their agents different kinds of contracts, which stipulate the commission splits, desk fees charged, and other agent expenses. Most of this information is available on the website of the brokerage houses, but you can verify the details when you appear for the interview.
It is necessary to enquire about the commission split as you will be paid only when you sell. There are a few brokers who offer salaried positions to their agents, but those are very few. Most real estate agents tend to leave their real estate brokerages in the first year due to dissatisfaction with their earnings. So it is integral not to make a judgment error when finalizing the brokerage to join as an agent. Do bear in mind that you need to find a commission split that works for you in the initial days, as both sales and commission split improve with experience in the field.
Types Of Commission Split Plans
Nowadays, most brokerages offer new agents joining their real estate team one of the three kinds of commission splits. Each commission split plan comes with its own share of benefits and risks. Make sure you consider each plan carefully and pick the one that suits your requirements and your further career progress.
The different types of plans are:
High Split Plans
In a high split plan, you are offered a really high percentage of the commission earned. Usually, it is around 70% but in some cases, it can go as high as even 100%. Although this may sound very attractive do bear in mind that brokerages offering these plans would charge high monthly desk fees. These fees have to be paid irrespective of your sales for that particular month. Therefore it is a high potential earning plan but also comes with high risks.
The usual commission plan offered by most brokerages is the standard 50-50 split of the earnings generated from each successful sale. This is the traditional plan that most new real estate agents start with. Yes, the commission earned might be on the lower side, but the desk fees charged by the brokerages are also very low or in some cases, no desk fees are charged from the agents. This plan has a balance between earnings and expenses and therefore carries a very low risk.
Hybrid Commission Plans
Hybrid plans hit the sweet spot between the previous two plans. In the hybrid plans usually, the real estate agents are initially offered around 70-30 split of the commission earned after each sale and assurance of the percentage increase of up to 100% once certain sales goals have been achieved. In this kind of split, there is a moderate risk because the high split balances out the need to achieve productivity goals.
Choose Whether To Join A Team Or Work As An Independent Agent
The next step in picking a real estate broker to work for is what sort of work structure would be a better fit for you. Between the two kinds, you need to pick a company whose business operating style gives you maximum benefits.
Being Part Of A Team
For most new real estate professionals joining a real estate broker's team is the ideal way to start due to the wide range of benefits offered from mentoring to lead generation support. The main advantage is that in the initial year they can focus more on the selling aspect of the business and less time on lead generation as the brokerage would be supplying them with seller leads.
They also have the advantage of having a big group of experienced mentors from whom they can gain valuable advice and learn how to manage the challenges of running a real estate business from the start.
Although there are a few drawbacks to being part of a broker's team. The main one being that the percentages of earnings split would be lower. There is also minimal flexibility and you would have to work according to the team's requirements.
Working As An Independent Agent
The prime benefit of deciding to work as an independent agent affiliated with a broker is that there is immense potential to chart your own course. These agents are not restricted by any company or business policies. Many agents prefer this as they have higher income earning potential and more freedom and autonomy to run their real estate business. The main drawback to going solo is that the agent would receive absolutely no help or assistance. They will have to build the foundation of their company from the start and focus a lot of efforts on generating leads and running the business.
Check Other Factors About Real Estate Brokerages
Apart from the big three factors mentioned above, there are a few other factors that new agents should pay attention to and evaluate carefully before finalizing the brokerage firm that they wish to join. The following are some of these factors, which would help you make the right decision.
Evaluate The Brokerage's Reputation
The best way for a new agent to succeed is by joining a brokerage that has name recognition and good standing in the local community. As part of a particular brokerage, you are going to be representing it, therefore you must make sure that they have a favorable appeal in the neighborhood you wish to offer your services in. Check the following and ascertain whether the brokerage is a good choice.
Check the online reviews on various portals and social media platforms about the services offered by the firms. Talk to people in your social and professional network. See what is the common opinion about these real estate companies in your city.
Check the real estate firms' websites and see if they have listed any awards, accolades, or notable mentions.
Check The Market Share Of The Brokerage House
Take a quick drive around different neighborhoods. See which companies' yard signs you see frequently. You need to ensure that you go with a firm that has the maximum number of listings. Also, try to verify if all the agents have an adequate number of listings to handle.
Adequate New Agent Training And Support
As a newly licensed real estate agent one of the factors on your priority should be robust training and coaching provided by the brokerage. Remember, it is not merely a job for you, you are here to learn the ropes of running a successful real estate business. When you go for the interview try to be clear and ask about the kind of mentorship being provided by the brokerage and check whether it suits your requirements.
As a new real estate agent starting your real estate career is certainly an exciting prospect. Yet one of the crucial decisions you need to make before you can start offering your services as a real estate agent is the selection of the broker and brokerage that you wish to work with. This initial decision could be the difference between starting your career on a successful note or struggling for a few more years to find your footing in the real estate business.