How to Choose a Real Estate Brokerage
At this point, you have probably aced your licensing exam. Amazing! Up next, it’s time to explore brokerage options available to you.
‘Explore’ because brokerages are not a one-fit-all outfit. When searching out a brokerage, it’s the other way round; they aren’t the ones evaluating you, you are evaluating them.
So, this article covers four significant characteristics that you should note during this process.
What is the Environment Like?
The environment generally refers to both the atmosphere and what relationships at the brokerage are like.
For example, some people like to go at it alone and snub working in teams, which might make it lonely if there are more people like this at the brokerage.
Choosing based on environment would be your call because while it is a critical feature, there is also the factor of your personal preference.
Generally, you would be working alone a whole lot. Still, you might need to collaborate with office staff, other agents, and your broker. A welcoming environment makes your work easier.
Who are the Leaders, and What are They Like?
Are the leaders somewhat available and willing to help new agents? For example, a salaried manager will likely be your primary contact if you work at a medium or large company.
On the other hand, a smaller company might see you working directly with the owner/broker.
Find out whether the broker actively sells real estate, too, because this would impact how available they are to you.
Any new agent is bound to eventually have many questions that only a manager or broker would be able to answer with some expertise and promptly.
To determine their availability, you could ask around the agents or salespeople that currently work there.
Does the Brokerage Offer Training?
Evaluating property, listing the property for sale, as well as assembling a contract — these are things that you would likely learn on the job.
How to fill out these forms and when to do what these are essential knowledge someone would have to impart.
Generally, brokerages should offer training to their new agents. You should be aware of the nature and path that training takes.
The real estate scene constantly evolves with new demands and expectations from clients and new technology-changing trends.
This necessitates regular training to keep up with changes. While ‘interviewing,’ brokerages ask whether they offer training classes and request to attend some classes.
If they don’t offer training in-office, it is a possibility that they outsource or they have some other provision made, so be sure to request.
But, again, your education and training are essential.
What is the Commission Split Like?
Suppose your decision on the choice of brokerage is mainly dependent on how the commission is split. In that case, know that most new agents will make around 60-70% commission split.
If you are sure they can give you the necessary push to get your business going, be prepared to offer them a fair portion of takings.
A traditional brokerage model would typically cover most of the overhead expenses, and pay would probably come in at just about more than half of commission.
Some brokers also claim to offer 100% commission.
However, if this is the case, you would likely be paying other fees like E and O premiums, transaction fees, and desk fees.
In addition, you can likely bid goodbye to any form of assistance.
Note that the concepts highlighted here are general and might differ from brokerage to brokerage. In addition, you can negotiate terms that are most favorable to you.
However, you would not have much leverage when initially negotiating since you haven’t made any sales.
You can renegotiate from a stronger position as you progress up the ladder and rack sales under your belt.
Should You Work at a National, Boutique, or Virtual Brokerage?
Now that you know what to look for in a brokerage, now you should ask yourself what type of brokerage you should work for.
The types of brokerages are:
- National brands
- Local boutiques
- Virtual (or online) brokerages
Each one offers its own unique advantage over the other, so here’s a quick overview of what to expect from each one.
The biggest perk of national brokerages is the brand name. They’re all familiar and comfortable with the brand name because they’ve recognized it.
Whether it’s a commercial they watched on TV or they drive past a few brand name brokerages on their daily commute, people have a familiarity with a big name brokerage.
It’s all in the name.
But also the resources they offer their agents. Typically, national brokerages equip each brokerage with technology and training courses that they can offer new agents and veterans alike.
They’re also a great place for team environments because national brokerages often times recruit more agents.
Local Boutique Brokerages
The local boutique brokerages have a big advantage that not all brokerages offer. That’s their unique, specific branding.
A local boutique is a smaller entity than a big-name brokerage, so they are able to focus specifically within a niche in real estate.
You can join a boutique brokerage that specializes in high-end luxury real estate or beachside properties only.
The other great thing is that you can move up the brokerage hierarchy easier than you could in a bigger brokerage. In other words, you can become a bigger fish in a smaller pond.
Virtual (Online) Brokerages
If you want full commission checks, often time virtual online brokerages are best for you. That’s because a virtual brokerage is one conducted entirely online.
No brick and mortar brokerage. These brands often offer a higher than average commission split because they have little to no overhead expenses.
Other brokerages have to finance the office space they work in, but a virtual brokerage doesn’t have that. But, they will most likely charge you fees that you have to finance through your commission.
Final Thoughts on Picking a Brokerage
When you pick your brokerage, you should pick somewhere that best matches you and what you want from this career.
And when you go into the brokerage interview, remember that you are interviewing them just as much as they are interviewing you.
TL;DR: When picking a brokerage, you should always check out the environment, who is the leadership team, what kind of training they offer, and (most importantly) the commission split. Also, find out if you want to work for a national brand brokerage, a local boutique brokerage, or a virtual (online) brokerage.