Fifteen Things Real Estate Agents Should Consider When Choosing A Brokerage
The first thing a new real estate agent needs to do is find the right real estate brokerage to work for. This is the most crucial step in your real estate career. All of your future actions and decisions will stem from this integral step. Therefore, you need to make sure that you do adequate research and make a proper decision while choosing a real estate broker to work for.
In some states, a real estate broker has to sponsor you before you can apply for your license. Many new agent hopefuls are not exactly sure about how to make the correct selection. That is why we have put together this handy reference guide for you. Whether you are a new agent looking for your first brokerage or an experienced real estate agent seeking better work opportunities, this guide covers all of the essential information.
From the types of real estate brokerages to the points to consider while finalizing a real estate brokerage to work at, continue reading this article to know all of the necessary information.
A. Types Of Real Estate Brokerages
The primary aspect new real estate agents should be familiar with are the different types of real estate brokerages and their features.
1. Franchise Brokerage
The most common brokerages are the national or franchise brokerages. These are the ones with a presence across the nation in almost all of the American cities. Some big names you might be familiar with are Keller Williams, Re/Max, or Coldwell Banker.
The benefit of being part of such huge organizations is the immense range of facilities and support offered in all manners. However, the drawbacks could be the limited commission split that these real estate brokerages offer.
2. Boutique Brokerage
On the other extreme from the franchises are the independent/ boutique brokerage houses. These are local organizations operating with a small team and serving a local neighborhood. These organizations tend to offer excellent, personalized services to their clients.
The plus point of working for such a small team is the individual attention and incredible career growth you can get. But on the downside, these organizations may not be able to offer superior technological resources and may have a limited marketing budget.
3. Virtual Brokerage
The last type of brokerage you can consider is the virtual one. This type has become really popular over the last year. The agents get to work from home and have lower in-office expenses to bear. This arrangement is more suited to agents with experience rather than new agents, as these organizations offer very limited in terms of resources.
B. Tips For A Real Estate Agent To Choose The Right Real Estate Broker
Now, we shall move on to the key aspects that you must verify before you decide on the real estate broker to work with. These are some of the salient aspects which can affect your career significantly. Therefore, you must ensure that you are covering all of these in your research or interview.
1. Ask About Commissions Split
We advise you to ask about the commission splits, but you should never base your decision on the commission percentage alone. Most large organizations offer a 50% commission split. Although there are firms that offer higher commission splits, these brokerages then charge higher fees for other office expenditures.
The best way to navigate the commission share confusion is to make a list of your real estate business expenses, and compare that with the commission split offered by the firm. If the firm can offer you more benefits in other areas, then accepting a slightly lower income potential is acceptable. Remember, as new agents, there is very little room to negotiate. Once you have gained some work experience, sold homes, and proven your skills, then you can always revisit the commission split agreement and ask for a bigger share.
2. Inquire About Technology And Support
The new-age agents do a fair share of their business with the support of technological tools. Both agents and homeowners are increasingly using various online resources when it comes to buying or selling homes. Similarly, with the immense growth in the real estate business, there has been an increasing need to utilize various technological resources to streamline the business.
Inquire about the resources in terms of the latest technology offered by the brokerage. Usually, these resources are expensive and therefore, highly beneficial if the firm offers them to you.
Generally, larger organizations offer these tools of technology free of cost to their agents and brokers. Some essential tools are as follows:
A. Online Leads Generation Tools
Inquire about the real estate leads generation tool that the company provides. Getting new leads is the foundation of your business. Without quality leads, it would be difficult to sustain your real estate business.
If you opt for a smaller organization, where leads are your responsibility, then you can consider opting for an online seller lead generation platform like Dorrmat. It offers a continuous pipeline of quality seller leads along with a host of other benefits. If you are on a limited budget or are an independent agent, then you must check the range of advantages that Dorrmat has to offer.
B. Customer Relationship Management Tool
As agents, you will be juggling multiple clients simultaneously. Therefore, a Customer Relationship Management (CRM) tool would be something that you would definitely want. If your firm provides you with one, then that means reduced expenditures for you.
A good CRM offers you the benefit of segregating your clients under various categories, setting reminders, and gives you a single dashboard to have a glance at all of your clients in one go. This ensures that no leads slip through the cracks.
C. Social Media Support
Last year, the real estate business made a transition to the online space, so now all of the social media platforms such as Facebook, Instagram, Twitter, and LinkedIn have become crucial to the success of a real estate agent.
From announcing new listings and open houses to celebrating successfully closed deals, these platforms have become integral to capture the interest of the market. Top firms generally provide digital marketing guidance.
3. Ask About Fees
Yes, you have already asked about the commission splits, however, there are other fees that an agent has to pay the brokerage. You must be aware of these additional fees, as these would be part of your expenses and would reduce the income you get from the commission. Some common fees you might be expected to pay are as follows:
A. Franchise Fees
Many brokerage houses charge an additional fee for being associated with the franchise. This would be separate from the commission that you are supposed to split with them. Usually, the franchise fee is approximately 3% to about 8%. This means that if you have a 60-40 split with the broker, and have to pay an additional 5% fee for the association, then you actually end up paying 40% commission and 5% association fee, which leaves you with 55% commission.
B. Desk Fees
Some organizations charge a desk fee, which is a flat fee charged monthly in exchange for a desk in the office. The brokers employing you may offer you 100% commission but with a high desk fee or a commission-desk fee combination. Do carefully check the details of this particular arrangement.
C. Additional Expenses
There are certain additional expenses that you should be aware of such as, Errors and Omissions Insurance Fee (E&O), start-up fee, and a monthly fee for the Multiple Listing Service(MLS).
4. Check The Real Estate Brokerage Size
The next aspect to verify is to inquire about the number of agents working for the brokerage. This is a good indication of the success of the firm, as well as an indication of whether this brokerage could be a good fit for you or not.
Large companies will allow you to work with many experienced agents and training in different real estate niches. However, if you are eager to work in a more independent structure, then a smaller brokerage might be a better choice.
5. Inquire About Real Estate Education And Training
Training is a crucial component of your career. The reason you are working with brokers is to benefit and learn from their experience, so make sure you inquire about the real estate training provided by the companies. Large companies generally have an in-housetraining program and classes for new agents. However, some firms outsource these to other corporate training agencies. These agencies will conduct the classes, which will provide you guidance on how to evaluate a new house, acquire a listing, and work on getting the contracts and other paperwork completed. It is also a requirement as a part of your continuing education for license renewal.
6. Ask About Mentor Guidance
Apart from training, make sure that the brokerage you select has a program for assigning you a mentor. Keep in mind that there is a lot to learn outside the offices too. A capable mentor will guide you regarding the market, help you pick up new listings, and guide you through to complete your transaction.
7. Inquire About Management Support
A good company will also provide you with management support in terms of running your business. You are not merely an employee, but a small business owner associated with them. You are representing their brand, therefore, many companies will provide you with additional support from the brokers who can help you with the planning, managing finances, and setting achievable goals.
8. Ask About Administrative Support
An integral part of the real estate business is administrative support. This is the part that concerns paperwork. In real estate, there is a lot of crucial paperwork that needs to be completed. However, many agents find it difficult to juggle selling and doing paperwork. Some offices, therefore, offer staff for handling all the paperwork.
9. Inquire About Company Culture
The company culture is a crucial aspect of your future success. There is no right or wrong company culture. You need to identify your style of working and find an organization that matches it. Identify whether you prefer to work in more rules, regulations, and structured atmosphere or are you an independent worker. The wrong company culture could affect your performance adversely. So try to talk to the broker working in the brokerage to get a sense of the culture in the office.
10. Check The Company Reputation
As important as it is to represent the company brand when you work as their agent, it is equally important to ensure that the company's reputation and brand are good in the local market. Ask the other real estate professionals such as bankers, lenders, attorneys, or appraisers. Try to identify their opinion about the company and its brokers.
11. Inquire About The Team
In some companies, you are assigned to work with a senior and successful broker. Ask whether this kind of team support is available. Talk to the brokers and see how it could've to work with them. For new agents, this could be immensely helpful while handling the initial listings.
12. Ask About The Listings Each Real Estate Agent Gets
It is important to know about the number of listings all brokers or agents get. This is an important indication of the referral system in place. Referrals are key to improve your career. You need to ensure that the brokerage provides ample listings to all of their agents.
13. Inquire About Leads Distribution System, The Brokerage Follows
Similar to the previous aspect is the answer to the question about how leads are distributed in the brokers. Good brokerage houses ensure a fair and almost equal distribution of new leads that ensures good business for all the agents. However, some firms may prefer to allocate a higher number leads to their high-performing brokers and agents. It is necessary to be aware of the distribution system before you finalize a brokerage.
14. Ask About The Real Estate Marketing Activities
It is necessary to ask about the marketing support that you would get from the brokerage. From a page on the real estate broker's website to a standalone website. Do they provide business cards, brochures, lockboxes, signage, and other necessary marketing material? Large firms offer these to their brokers and agents either free or at a low cost.
15. Compare The Different Brokerages In Your Local Area
The final step before you choose a real estate broker or brokerage to work for would be to compare all the successful brokers in your city. Visit the website of each one and try to answer some of the above-mentioned aspects. You can then schedule interviews with brokers to gather more detailed information. This will help you select the right brokerage.
As new real estate agents, the choice of where you want to work is a crucial one. Working with the right real estate brokerage can help you gain better experience, the opportunity to earn more, and put your real estate career on the fast track. In this article, we have gathered all the crucial aspects that you should check upon before you decide to work for a real estate broker.